Royal Enfield has 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. The new facility starts with an installed production capacity of 300,000 motorcycles per annum in the first phase
In FY 2017-18, the combined production capacity from all the three plants is planned to be 825,000 units. In FY 2016-17, Royal Enfield produced and sold 667,135 motorcycles, nearing its installed capacity.
Royal Enfield acquired a 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 back and has been completed in record time. The new facility, according to RE’s official statement, 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 over 55% over the past 6 years. The order book continues to be strong and there is a large unmet demand. In FY 2017-18, the company plans to invest Rs 800 crores, largely towards capacity expansion at Vallam Vadagal, new products and platforms, and technical Centres in Leicester, UK and Chennai, India. This investment will be funded through internal accruals.