Royal Enfield has all plans to extend its setup in Tamil Nadu. Recently, the company has bought approximately 50 acres of land, located about 10 kilometres from the current facility at Oragadam. This is near Chennai, the capital of Tamil Nadu. This will be the third plant in the plot and is a part of the aim to expand the production of the company. Approximately 57 crores INR has been invested to acquire this piece of land.
Royal Enfield is already on an expansion spree at its Oragadam plant on a monthly basis due to the increase in demand. The company is not exactly where it should be on the basis of supply and demand, and thus is looking forward to increase the production. The current capacity at Thiruvottiyur and Oragadam is three lakh units in 2014. The company is planning to boost the number to four lakhs on the two units’ combined production. Gradually, it is expected to take the total production of number to six lakhs. However, the construction of this plant will start sometime later.
Siddhartha Lal, chief executive officer and managing director of Eicher Motors, said, "At Royal Enfield, we have set our sights on becoming the leaders in global mid-sized motorcycling segment and we are working towards it persistently. While we continue to ramp up capacity at our Oragadam plant month on month, we have recently acquired a 50-acre plot in Vallam Vadagal, near Chennai, Tamil Nadu. This plot is located within 10 km of our Oragadam facility. This prepares us for future expansion to meet the growing demand of our motorcycles worldwide."
The third plant of Royal Enfield is a direct consequence of the stiff increase in the production of the motorcycles. However, it is also because of UML entering in India. The company, which is a collaboration between UM Motorcycles of the United States of America and Lohia Motors of India, will launch mid-range motorcycles from the middle of 2015. Royal Enfield is surely going to get a stiff competition from UML.
