Eicher Motors has approved a major capacity expansion plan for Royal Enfield motorcycles, with the company’s board sanctioning an investment of Rs 958 crore to increase annual production capacity from 14.6 lakh units to 20 lakh units across its plants.
- Rs 958 crore investment okayed for expansion of Cheyyar, Tamil Nadu plant
- Annual capacity will go up by 5.4 lakh units or 37 percent
- Ramp-up will start in Q1 FY2027 and reach completion by FY2028
Royal Enfield production capacity expansion
Phased ramp-up at Tamil Nadu facility
According to a regulatory filing submitted to the BSE and National Stock Exchange, the company’s existing manufacturing capacity is operating at close to full utilisation, necessitating the expansion to meet increasing demand.
The expansion will take place at Royal Enfield’s existing manufacturing facility in Cheyyar, Tamil Nadu. The capacity ramp-up will be executed in phases, beginning in the first quarter of FY2027 and reaching completion by FY2028. The additional 5.4 lakh units of annual capacity represent a 37 percent increase over current production levels.
The entire Rs 958 crore investment will be funded through internal accruals, according to the filing. This means Eicher Motors will use its own reserves and profits rather than raising external financing through debt or equity.
Royal Enfield has been seeing strong demand for its motorcycles in both domestic and international markets. In 2025, the Chennai-based manufacturer registered its highest-ever sales of 10,71,809 bikes, marking the first time it crossed the 1-million-unit milestone in a calendar year. The company also exported 1,32,132 motorcycles last year. The updated facility is a step towards supporting this growth.
Angitha Suresh