Royal Enfield on Aug. 28 started commercial production from its new manufacturing facility at Vallam Vadagal near Chennai, Tamil Nadu, India. Spread over 50 acres, the Vallam Vadagal plant will be Royal Enfield’s third manufacturing facility and will manufacture Royal Enfield motorcycles for India and international markets.
In fiscal year 2017-18, the combined production capacity from all the three plants is planned to be 825,000 units. In fiscal year 2016-17, Royal Enfield produced and sold 667,135 motorcycles, nearing its installed capacity.
Royal Enfield acquired the 50-acre plot in Vallam Vadagal in October 2014 as the site for its third manufacturing facility. The construction of the facility started 15 months ago. The new facility has been benchmarked to the highest level of quality and productivity. The capacity in this facility will enable the company to meet its next level of growth.
Royal Enfield’s sales have grown at a compounded rate of more than 55 percent over the past six years. The order book continues to be strong, and there is a large unmet demand. In fiscal 2017-18, the company plans to invest Rs 800 crores (about $125 million USD), largely toward capacity expansion at Vallam Vadagal, new products and platforms, and technical centers in Leicester, United Kingdom, and Chennai, India. This investment will be funded through internal accruals.