Royal Enfield, the maker of iconic cruiser motorcycle Bullet, has got itself a new home in Orgadam, Tamil Nadu. Spread across 50 acres, the 1,50,000- unit plant began commercial production on Tuesday. With a state-of-the-art modular structure, the assembly line can churn out one Royal Enfield a minute.
With this new capacity coming on stream, Royal Enfield is aiming to produce and sell 1.75 lakh units in 2013, and increase it to 2.5 lakh units by 2014.
Last year, the company sold 1,13,000 units, and it has grown by over 50% over the last couple of years.
The company already has about 50,000 bookings, with waiting period running into 6 to 12 months depending on the model and variant. The company says the new plant will bring down the waiting for the customers who have already booked the motorcycle, but declined to commit by how much.
The current plant in Tiruvottiyur, which is one of the oldest automobile plant in the country, will support the new plant by manufacturing engines and giving finishing touches to the models.
Siddharth Lal, MD & CEO, Eicher Motors, said the company now has the ability to scale production quantity quickly in response to market demand.
"We have been extremely successful in stretching the capacity of our existing 60 year old plant to record levels – achieving production of over 12,000 motorcycles in the month of March 2013. Yet the demand has outpaced supply. Therefore we have conceived this new facility in a much larger manufacturing facility which will take the eventual production here to over 500,000 per year," said Lal.
The company has put in an initial investment of Rs 150 crore which can produce 1.5 lakh units per annum, which by end of 2014 will be increased to 2.5 lakh units. Eicher has enough land available to double the capacity to manufacture half million units out of the new plant.
The new plant will help Royal Enfield to improve the quality of its motorcycles and reach out to new global markets.
"The ability to increase capacity fast is a crucial step for Royal Enfield towards meeting our global ambitions. While we are adding new models and new dealerships, we are also working on building our presence globally. Higher investments into brand and distribution, as well as new products that are appealing to international markets, are going to be key for us to achieve global leadership in the mid-size motorcycle category," emphasised Lal.
Built in 11 months, the Oragadam plant has been designed to optimize cost of production through relevant automation while retaining the human craftsmanship that is distinct to the iconic Royal Enfield motorcycles, the company said.
A new CED paint shop with a painting capacity of 600 motorcycles per day has been installed in the plant. Further, to ensure consistency and less wastage, a robotic painting system and powder coating system have also been added.
At the same time, processes such as the pin-striping continue to be done through craftsmen who lend that special human touch to each motorcycle.
The vehicle assembly line at Oragadam comes with several features such as ergonomic assembly work stations, torque controlled tools with feedback device and a capacity of producing one motorcycle a minute, or over 800 per day on two shifts. Effective controls and process, right from material handling to review mechanisms, have been created on the backbone of a modern and strong IT infrastructure. In addition, chassis dynamometers and a 1.4 kilometre test track within the factory premises allows for the motorcycles to be thoroughly tested before they are dispatched for customers.
