Eicher to expand capacity of Royal Enfield for Rs. 600 crore.

Eicher Motors, which owns Royal Enfield, said it has planned for a capex of around Rs. 600 crore in the motorcycle business over the next two years. The capex will be on product and manufacturing and other areas. The company also said that its two-wheeler business has grown around 85 per cent in terms of sales, and in production too it has approximately been the same over the last quarter.

Siddhartha Lal, MD and CEO of Eicher Motors Ltd., said that the investment is for 2014 and 2015 calendar years and is for both the Royal Enfield facilities at Oragadam, which commenced last year, and at Thiruvottiyur in Tamil Nadu.

He said, capacity addition about a year ago was a bit slow mainly because the company was operating out of its only plant (Thiruvottiyur in North Chennai) and it faced huge constraints.

The new Oragadam facility is much larger and five times the size of the old plant and the company also has a road map to lean upon and it has enough land which was had been a constraint earlier.

BS