Royal Enfield reveals plans to invest Rs 800 crore in FY-18

Royal Enfield, a cult bike maker in the country has been witnessing a steady year-on-year growth. In an effort to further strengthen its foothold in the Indian market, Royal Enfield will be investing Rs 800 crore this financial year. The investment will be used to establish two Research & Development centres in Chennai and UK. The bike maker will also be using an undisclosed part of its investment for a third manufacturing plant near Chennai in August 2017.

Recently, the company had stated that it would be introducing a new product every year. Although there has been no official confirmation from the bike maker, we believe that the company might introduce a twin-cylinder version of the Continental GT. The fresh round of investment will help the bike maker make technological advancements in the 750cc and higher engine class in the UK, which is currently dominated by the likes of Harley Davidson and Triumph. Investment in development and research will also give an opportunity for the brand to strengthen its presence and foothold in the global two-wheeler segment. Earlier this year, the bike maker upgraded its bikes of over 410cc capacity with fuel injection systems, while the lower capacity ones continue to be in the carbureted form.

The new facility will boost the bike maker’s production output to 8,25,000 units for the current fiscal year, which makes it 24 per cent higher than that of fiscal year 2016-17. Moving forward, we expect to see more technological advancement along with fuel injected technology being offered in its entry level 350cc motorcycles which will help the brand stand on par with the current crop of competitors like the Dominar and the Dukes.