Enfield plans to ramp up capacity to 52,000 a month by December

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Mumbai | Published: July 13, 2015 6:40:27 AM

Royal Enfield, the world's fastest growing premium bike-maker clipping at over 40 per cent sales on an average every month since the beginning of this year...

Royal Enfield, the world’s fastest growing premium bike-maker clipping at over 40 per cent sales on an average every month since the beginning of this year, will be ramping up its capacity up to 52,000 a month by December, from the current capacity of 36,500 units.

The Chennai-based Eicher Motors-owned Royal Enfield, that makes the iconic Bullet brand of premium motorbikes, has grown over 45 per cent in the first half of the calendar year and is hopeful of sustaining the present growth going forward.

“To meet the growing demand, we have decided to ramp up our capacity to around 52,000 units by December from the present 36,500 units a month. We have also taken land for a third plant near the existing plants for Rs 70 crore, as we foresee the current phase of robust demand to continue,” Royal Enfield President Rudratej Singh told PTI.

However, he said the annual production this year will be 450,000 units.

The move will reduce the long waiting period for the bikes which is around five months on an average as the frenetic demand for the bikes continue.

The present installed annual capacity for the company is 4.5 lakh units or 37,500 a month, which it wants to increase to 50,000-52,000 a month now or around 6.25 lakh per annum, Singh explained.

Singh said the company has been clipping at 50 per cent annually since 2010.

He also said, to meet the growing demand, the company will be opening 85 more sales and service network by December taking its overall network to 500.

Out of this over 20 will be in Maharashtra alone, he said, adding the state is one of the largest markets for the 114-year brand.

The company sold 33,481 units in the state in the first half, up 37 per cent over the same period last year.

It has 55 stores including, three exclusive gear stores in the state.

While in January this year its sales grew 43 per cent, February saw demand growing at 49 per cent.

In March and April it sold 42 per cent more bikes over the previous year, while May and June its monthly sales roaring at 47.5 per cent each, according to months sales figures released by the company.

Royal Enfield, which also has the record of being the oldest bike company in the world which has been continuously rolling out bikes since inception in 1901, had sold over 3,00,000 units in 2014.

It had set a target of selling 4,50,000 units this year.

But going by the pace of sales growth, the company can easily achieve this.

Out of this, exports contributed to only 3 per cent of total sales, Singh said.

The 114-year-old Royal Enfield sells various models, including the iconic Bullet Standard, the Bullet Classic, the Thunderbird and the high-end performance bike Continental GT.

The parent company Eicher Motors has an overall capex plan of around Rs 500 crore for Royal Enfield for this year.
According to company managing director and chief executive Siddharth Lal, this planned investment will be used towards product development, capex among others.

A part of this will also go into setting up of two technology centres — one in Chennai and other in Leicestershire, Britain, and will be operational by the end of 2015, according to Lal.

Currently limited to making bikes with engine capacities ranging from 346cc to 535cc, Royal Enfield is planning to enter more categories, both in the low and high ends in the 250cc to 750cc segments, according to media reports.

The first all-new product is reported to be an adventure tourer called the Himalayan, for which it has already got the trademark.

This May, the company had acquired a British design and engineering firm Harris Performance for an undisclosed amount.

Harris has had a long standing relationship with Royal Enfield and was responsible for the chassis development of its Continental GT cafe racer model.

Over the weekend, the company launched 600 limited edition units of its flagship Bullet Classic model to celebrate the enduring success of the bike, which still contributes close 50 per cent of its total sales.

The limited edition model, inspired by the war era Despatch riders, are priced at Rs 2.25 lakh in Mumbai.

When asked about the reason for the limited edition Bullets, Singh said, at a time when brand loyalty is a hard thing to come by, “we want to celebrate our customer loyalty for the purposeful longevity of our brand.”

The limited edition Despatch motorcycles-the Desert Storm Despatch and Squadron Blue Despatch — are a very special bike for all Royal Enfield fans as only a limited number are available.

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