Royal Enfield plans to more than double its production as demand is quickly outpacing supply, CEO Dr. Venki Padmanabhan told The Hindu Business Line.
The company’s plant in Chennai, India, has been tweaked to produce 70,000 motorcycles a year, however that has not been enough to fulfill orders. Currently, customers are waiting at least seven months for a new motorcycle, the newspaper reported. In an effort to meet some of the demand, the company recently announced that it will raise its production capacity to 150,000 motorcycles per year.
Padmanabhan said the company failed to read the market correctly, which led to the lack of sufficient production.
The challenge in increasing production, he told The Hindu Business Line, is that even at 150,000 units per year, Royal Enfield’s volumes are still low from a vendor’s viewpoint, meaning vendors often don’t prioritize the OEM’s supply levels. To remedy that issue, Royal Enfield is working on creating a supplier park within its 50-acre site in Chennai.