Royal Enfield lines up Rs 800 crore capex for current fiscal

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New Delhi: Niche bike maker Royal Enfield on Tuesday said it has earmarked Rs 800 crore capex for the current fiscal for various activities, including the construction of second phase of its Vallam Vadagal plant near Chennai. The company, which is part of Eicher Motors, has also decided to set up wholly-owned subsidiaries in Indonesia and Thailand in the current financial year.

"Our demand continues to exceed supply, and we continue to see strong growth from all our markets. Therefore, we have decided to expand our production capacity with the second phase of our Vallam Vadagal plant near Chennai," Eicher Motors MD and CEO Siddhartha Lal said in a statement.

The company also plans to complete construction of its Chennai-based technology centre this year and invest further in the development of new products to meet upcoming regulations and to expand its portfolio for global markets, he added.
The company had earmarked Rs 800 crore capex in 2017-18 fiscal as well.

With Southeast Asia's long motorcycling culture, Royal Enfield motorcycles have found strong traction in the region since entering the region two years ago, the company said. "To further strengthen the brand and accelerate market development activities, Royal Enfield has decided to set up wholly owned subsidiaries in Indonesia and Thailand in 2018-19," it added.

Lal said the company continues to strengthen its offerings with new models and variants such as the new Thunderbird X, the Classic Gunmetal Grey, Stealth Black and Redditch series, as well as soon-to-be-introduced Twins. "With a wide distribution network in India, a growing international presence and state-of-the-art capabilities in product development, Royal Enfield is well positioned to grow the middleweight motorcycle segment globally," he added.

In the current fiscal, the company expects its annual production capacity to touch 9.5 lakh units aided by first full year of operations of the first phase of the Vallam Vadagal factory and productivity optimisation at its Oragadam plant.

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