Royal Enfield to setup third plant in Tamil Nadu

Royal Enfield has bought 50-acres of land, which is around 10 kms from the existing facility at Oragadam near Chennai. The company will be setting up its third plant in this plot, to expand its production capacity and have spent Rs 57 crore to acquire the same. 

The company is already expanding its capacity month on month at its Oragadam plant as the demand has been increasing steadily. As the company is unable to meet its demand, setting up a third plant to take care of this demand makes sense. The company's current capacity at Oragadam and Thiruvottiyur is 3,00,000 units for 2014. In 2015, the company intends to manufacture 4,00,000 units from these two plants. Eventually, the two plants put together will be able to manufacture 6,00,000 units. However, Royal Enfield has said that the construction of the third plant has not begun yet and will take time.

"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," said Siddhartha Lal, managing director and chief executive officer, Eicher Motors.

Royal Enfield says that the third plant is because of the demand for its motorcycles but it is also because the entry of the UML. UML will launch motorcycles in the mid-size motorcycle market soon, which will pose a direct threat to Royal Enfield motorcycles. Royal Enfield is just making sure its sales stay with them and doesn’t go to the rival company due to their long waiting period.