Royal Enfield plans launches, capacity ramp up

After a record sales year in 2011, iconic Bullet manufacturer Royal Enfield Motors intends to ramp up its production capacity further due to strong order book amid long waiting periods. The company also has a strong pipeline of new launches that it plans to roll out beginning second quarter of the present calendar year.

The company, part of Eicher Motors, recorded a volume growth of 42 per cent at 74,626 units in 2011 and also achieved its target of monthly production and sales of 7,000 bikes by the end of calendar year 2011. With demand continuing to outpace supply with waiting periods of over six months, the company intends to ramp up the production capacity to over 8,500 units a month by the end of 2012. “Our intent is to grow well above 90,000 units in the present calendar year,” Venki Padmanabhan, CEO, Royal Enfield Motors told Financial Chronicle.

With increasing demand from several locations across the country, Royal Enfield has also embarked on widening its reach and improving after sales services. “We have added new dealers in poorly represented markets as most of our customers have to drive over 100 kms for good service support. Last year, we crossed over 200 dealers across India. All the new dealers are investing heavily in sales and service infrastructure (service bays), and we have set up two repair technician training facilities in Chennai and Chandigarh for equipping the dealer’s staff in servicing the new Bullets sporting our new engine platform (unit construction engine) besides older iron barrel motorcycles. We have also increased our spare parts supply to the market considerably, he said.

In addition to production and dealer ramp up, the company is also charting new launches beginning middle of this year. It will launch its Thunderbird 500 motorcycle, which was showcased at the Auto Expo, in May or June. With this, it hopes to strengthen the brand position further in leisure motorcycling in the country. The next launch is that of the Cafe Racer and is expected during the first quarter of next year. “In our opinion the reintroduction of a classic racer is a new segment in India and response of its preview at the Auto Show was overwhelming,” said Padmanabhan.

“Exports will be a key focus area with significant ramp up visible from 2014-15 onwards and their contribution is expected to grow over 10 per cent from the present six per cent.