Royal Enfield, the motorcycle division of Eicher Motors, is to invest Rs 350 crore in a new manufacturing plant at Oragadam, the automobile cluster located 45 km west off Chennai.

The proposed plant is slated for completion by the first quarter of 2013. The new plant will increase Royal Enfield's annual capacity of 70,000 units to 1,50,000 units. The new plant will be equipped to produce the entire product range of Royal Enfield motorcycles, according to a company press release.

The expansion of the production capacity is due to growing demand for Enfield motorcycles worldwide.

For Royal Enfield, expanding in Chennai comes with several advantages. Proximity to its plant in Tiruvotriyur will bring synergies for the supply chain and its human capital. Chennai's growing importance in the global automotive industry, combined with the effective auto-eco system at Oragadam, will augment our growth curve, the release said.

Land allotment

The Tamil Nadu Government today allotted 50 acres at the SIPCOT Industrial Growth Centre, Oragadam, located on the Tambaram-Kancheepuram Road, for building the new Royal Enfield plant.

The Chief Minister, Ms J. Jayalalithaa, issued the Sipcot's letter of allotment to Mr Siddhartha Lal, Managing Director and CEO, Eicher Motors. The expansion will create a direct employment for 300 and indirect employment for nearly 600, says a Government press release.

In Royal Enfield motorcycle division, where the company operates in ‘leisure segment' of 350cc and 500cc, an all-time high of 52,574 units were sold in 2010, marginally higher than 51,955 units sold in the previous year.

Even though opportunity was much higher, due to capacity constraints, supply lagged demand throughout the year, the company said in its annual results ending December 31, 2010.

Royal Enfield's domestic line up includes the Bullet 350 UCE, Bullet Electra UCE, Classic 350, Classic 500 and the Thunderbird Twinspark. Internationally its motorcycles are exported to over 30 countries across the world, including the US, Japan, the UK, several European countries and West Asia, a company press release says.

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