Buoyed by strong demand of its products, Eicher Motors today said its two-wheeler division Royal Enfield is increasing production capacity by more than double to 2.5 lakh units annually by 2014.
"We are witnessing robust growth for our motorcycles. We are increasing the capacity to 1.75 lakh units annually by December this year and it will be further expanded to 2.5 lakh units a year by end of next year," Eicher Motors Managing Director and CEO Siddhartha Lal told reporters during a conference call.
The company had produced and sold a total of 1.13 lakh units of two-wheelers during last year, he added.
Last month, the company had started operations at its second manufacturing facility at Oragadam near Chennai. It is investing Rs 150 crore for first phase of the plant, spread on 50 acres of land.
Talking about the capex, Lal said Eicher Motors will invest a total of Rs 1,200 crore in 2013 and 2014.
During the January-March quarter, Royal Enfield sold a total of 34,736 units as against 23,899 units in the same period last year, up 45.34 per cent.
"Royal Enfield continues to power ahead even in Q1 2013. With its second plant at Oragadam commencing commercial production, Royal Enfield is now prepared for its next level of global growth. The new facility has been conceived on a much larger tract of land and created with a master-plan that can take the eventual production to over 5,00,000 per year," Lal had said yesterday after declaring Eicher Motors' results.
Eicher Motors had reported 18.7 per cent decline in consolidated profit after tax at Rs 132.8 crore for the quarter ended March 31. It had posted a net profit of Rs 163.4 crore in the corresponding quarter last year.
The consolidated total income from operations, however, went up by 3.4 per cent to Rs 1,724.3 crore from Rs 1,668.2 crore in the year-ago period.