Royal Enfield, makers of the iconic Bullet motorcycles, saw their first vehicle roll off the production line at the company’s new plant in Oragadam, Tamil Nadu. This is a new 50 acre facility which is their first in 60 years here. It was built in record time of 11 months with construction having begun in February 2012, with initial investment of INR 150 crores and with a total investment of around INR 350 crores in the coming 5 years. With an initial installed capacity of 1.5 lakh units in phase 1, manufacturing activity will increase in time.
Royal Enfield will now be able to reduce waiting periods considerably. With continuing at current levels, the company hopes to reduce waiting period from a current 8 months to 6 to 7 months. Royal Enfield is also concentrating on augmenting dealerships in the country in the hope of reaching out to customers across India, specially in rural and semi urban areas. Earlier this month, Royal Enfield launched Bullet 500 at a price of INR 1.54 lakhs. This 500cc Bullet, is being launched in Punjab, Haryana, Chandigarh, Delhi-NCR and Kerala that have traditionally been the best markets where the Bullet is concerned, and will make its way across the country in a phased manner.
The Oragadam plant aims at optimising cost of production and has built a new CED paint shop with a capacity of 600 motorcycles each day. A robotic painting system and powder coating system will be used. Pin-striping and other inimitable finishes will continue to be in the hands of craftsmen. The vehicle assembly line has a capacity of producing a bike each minute, which equates to 800 per day in 2 shifts. The plant houses a 1.4 km test track for motorcycle testing.
Mr Siddhartha Lal, MD & CEO, Eicher Motors Ltd. said, “At Royal Enfield we have recorded a major milestone today with this plant at Oragadam becoming operational. Royal Enfield has witnessed a huge surge in demand in the recent past, recording a growth of over 50% for each of the last two years. We have been extremely successful in stretching the capacity of our existing 60 year old plant to record levels – achieving production of over 12,000 motorcycles in the month of March 2013. Yet the demand for our motorcycles has continued to outpace the supply. Therefore we have conceived of this new facility on a much larger tract of land and created a master-plan that can take the eventual production here to over 500,000 per year. With the speedy execution of the first phase of the plan, we have revised our production target upwards in 2013 – to 175,000 motorcycles from both plants. However, even as we start commercial production today, we have already begun working on the second phase of expansion at Oragadam, which will further increase the production capacity to 250,000 motorcycles in 2014. With this new facility, we now have the ability to scale our production quantity quickly in response to market demand.”
“This new plant has been benchmarked to achieve the highest level of quality and productivity. We have re-tooled many of the parts that make up our motorcycles – so that they are of exacting accuracy and finish. The substrate quality of the sheet metal parts, for example, is now at par with the best in the world; when these parts undergo the world-leading CED and paint process here at Oragadam – they will have a surface finish and life of the highest quality”, he further added.
Talking about Royal Enfield’s future plans Mr Siddhartha Lal said, “The ability to increase capacity fast and superior quality of motorcycles is a crucial step for Royal Enfield towards meeting our global ambitions. While we are adding new models and new dealerships in the Indian market which is fuelling our growth, we are also working on building our presence globally. Higher investments into brand and distribution, as well as new products that are very appealing to international markets are going to be key for us to achieve global leadership in the mid-size motorcycle category.”