New Delhi: Niche bike maker Royal Enfield, a part of Eicher Motors Ltd, today said it will invest over Rs65 crore in the next three years to double production capacity to one lakh units.
The Chennai-based company, which has been expanding its export markets, also said it expects overseas sales to more than double over the next five years.
“We will expand production capacity to one lakh units in the next three year from the current 50,000 units at our existing plant (in Chennai),” Eicher Motors managing director and CEO Siddhartha Lal told reporters here.
Asked about investments for the expansion, he said: “We had invested Rs65 crore in the existing facility in the last five years for the current capacity and a similar amount or slightly more may be required.”
The company today launched two new bikes, Classic 350 and Classic 500, priced at Rs98,086 and Rs1.25 lakh (ex-showroom Delhi) respectively, which are based on a new engine platform.
Lal said Royal Enfield is looking to increase exports of bikes to countries in Latin America, Africa and the Middle East, besides strengthening its presence in Europe and the US.
“Our aim is for export to contribute about 10-15% of total sales in five years time,” he said, adding currently exports account for less than 5% of total sales.
This year the company expects total sales to be around 50,000 units, compared with 43,298 units last year.
Lal said future bike models from Royal Enfield will be based on the new engine platform for at least another five years, till the time it develops newer ones.
“Different motorcycles like classic sports and touring bikes can be developed on this platform. At least five to six bike will be developed,” he said.
The company had decided to phase out one of its models, Machismo and will be replaced with a new bike in the similar segment, he added.
Lal said the company has plans to move up in bigger engine categories like 800 cc and 1000 cc but not immediately.
“Our current focus is on the 350 cc bikes for the Indian market and 500 cc for the international market for the Classic range of bikes,” he said.
Stating that Royal Enfield has successfully made a turnaround in its financial performance, he said revenues in the past nine months have been over Rs300 crore.