Eicher to set up new unit for Royal Enfield

In order to meet the increasing demand for its two-wheeler Royal Enfield, Eicher Motors on Tuesday said it plans to set up a new facility to increase its production capacity to 10,000 motorcycles per month.

"We will be continuously looking to ramp up the capacity to meet excess demand," CEO and MD Sidhartha Lal told reporters on the sidelines of the India Economic Summit.

The company is planning to set up the new manufacturing facility that will take up the production to 10,000 units per month.

However, the company has not finalised the location and investment for the manufacturing units.

Currently, the company is producing 4,000 units every month on average, lower than the design capacity of 5,000 units, due to some constraints at its Chennai facility, he added.

"Very soon, we will be back to 5,000 units per month and by next year we will be reaching 6,000 units per month," Lal said.

The company will also set up another production unit for its commercial vehicles.

"The joint venture between Eicher Motors and Volvo Group will invest Rs 800 crore over the next three years, to increase the production capacity and set up a new engine plant, which will be operational by 2013," Lal said.

VE Commercial vehicles will be increasing production capacity to 8,000 per month from the current 4,000 in the next three years and work is already on, he added.

The investment on the engine plant will be around Rs 300 crore, he said, adding the combined investment would be funded through internal accruals. The new engine facility will have a production capacity of up 85,000 units per year.

Earlier, VE Commercial Vehicles had said the new unit will be constructed at its existing facility in Pithampur, which has an annual output capacity of 40,000 units.

The new facility is proposed to become the global manufacturing site for Volvo's 5-litre and 8-litre commercial vehicle engines complying with Euro-III and Euro-IV emission norms.

Courtesy: Mail Today