Royal Enfield to invest Rs 700 crore in 2019-2020

The past year has been challenging for Royal Enfield with dropping sales numbers as a combined effect of demonetisation, hike in insurance costs and the substantial price hikes thanks to ABS. Now the brand is looking to the future, with a substantial investment of Rs 700 crore as capital expenditure in the 2019-2020 financial year.

The planned CapEx will include completion of the construction work of the technology centre of the Vallam Vadagal plant in Tamil Nadu. It will also be directed towards the development of new platforms and products. Moreover, for 2019-20, Royal Enfield plans a production output of 9.5 lakh bikes.

Speaking about the company’s investment plans, Siddhartha Lal said, “This year Royal Enfield will focus on the upcoming transition to the BS-VI emission norms along with strengthening our product development capabilities and working towards new global platforms. With a wide distribution network in India, growing international presence and building state-of-the-art capabilities in product development, Royal Enfield is well on its way to grow the middleweight motorcycle segment globally in the coming years.”

The products in question will be a major reworking of the company’s popular Classic, Bullet and Thunderbird platforms. Spy pictures have already emerged of these machines (of the next-gen Classic and next-gen Thunderbird) and we expect to see massive improvements including new frames, and possibly all-new, BS-VI-compliant engines. At the moment, details are unclear concerning what to expect from the engines in terms of capacity; but going forward, we do expect to see cleaner, more powerful and improved refinement levels.

Royal Enfield also recently announced the inception of a wholly-owned subsidiary in Thailand. The brand commenced sales in that market a little over three years ago and its motorcycles have seen significant success there. Thailand will also host Royal Enfield’s first assembly plant outside of India, which is expected to be operational by June 2019.

Another big announcement from the company was the recent appointment of Vinod K Dasari as the chief executive officer of Royal Enfield. Vinod Dasari takes over from Siddhartha Lal, who will continue as the managing director of Eicher Motors Ltd.