Royal Enfield's new Chennai unit to start production in 9 months

Company's total production capacity will increase to 900,000 units a year once the new facility starts

Royal Enfield has said that the first phase of its new plant in Chennai will go on stream within the next nine months. Once the facility goes on stream the company's total production capacity across all its three plants will go upto 9,00,000 units.

By end of the current year total capacity of Royal Enfield would be around 6,75,000 units, which is 2,00,000 units more than last year.

Siddhartha Lal, managing director and CEO, Eicher Motors Ltd said that by second quarter of 2017-18, first phase of the new facility will commence production. To start with, it will add 25,000-30,000 units a month to the existing capacity of the company.

While declining to disclose the investment in the new plant, Lal said large portion of the Rs 600 crore (capex for 2016-17) will be for the new plant, while the balance would be for product development and to set up tech centres.

Once the new plant goes on stream, total production capacity will be increased to 900,000 units by end of Fiscal 2018.

The new plant is coming at Vallam Vadagal, around seven kms from the company's Oragadam facility, near Chennai.

Lal added, while the UK tech centre will be ready by end of the current fiscal, its Chennai tech centre will be ready by end of 2017-18.

On new launches, like the current year, next year the company may look at one big product, while it will continue to introduce variants now and then.

The recent addition was Himalayan platform in the adventure category.

Lal said RE's focus would be 250-750cc and besides Indian market the company will focus on South East Asia and Latin America.

RE is testing few markets now, in future larger growth will come from the emerging markets, especially the India like markets, where people are moving from commuter segment to leisure segment.