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Old 8th November 2015, 09:29   #1
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Default Royal Enfield to set up 3rd plant in India

Royal Enfield announced it will install its third manufacturing facility and increase its production capacity in India.

Quote:
The aforementioned plant that will be set up by 2018 in Vallam Vadagal on the outskirts of Chennai will allow the bike maker to double its total production capacity to 9,00,000 units per annum as compared to the current output of 4,50,000 units. The Eicher Motors owned - Royal Enfield currently has two facilities in Tamil Nadu, India.

Siddhartha Lal, CEO and Managing Director, Eicher Motors, further added that the first phase of the new plant will aid the proposed increase in production and the work for which will begin in 2016.

Other than the new plant, Royal Enfield is also looking to launch new products; well, 2 to be precise. Mr Lal said the bike maker will bring in 2 new models, out of which one will be launched in early 2016, while the other has an expected launch date of 2017.

Furthermore, Royal Enfield also plans to strengthen its dealership network across India and establish 500 dealerships by the end of the year.
SOURCE: http://auto.ndtv.com/news/id-1241132
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Old 8th November 2015, 11:29   #2
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Default re: Royal Enfield to set up 3rd plant in India

They are losing their identity going after numbers.
As it is spotting an Enfield on the road is like seeing a commuter bike.

I would rather want them to bring out more variety than selling huge numbers of of a few models.

There is no uniqueness in owning an Enfield anymore.

Last edited by Gannu_1 : 9th November 2015 at 10:19. Reason: Fixed typo.
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Old 9th November 2015, 10:09   #3
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Default re: Royal Enfield to set up 3rd plant in India

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Originally Posted by tharian View Post
They are loosing their identity going after numbers.
Mate ceteris paribus RE has never tasted success on such a phenomenal scale in their lifetime, Ever! They are on the roll since 2010 and how. As far as I can see I don't seeing them stopping. They have juggernauted the Retro Classic category in India and are also doing so elsewhere in the world where they are gaining popularity day by day. As far as the numbers go, its pure business mate. Loosing identity or not does not really matter as RE isn't a Ferrari or Bugatti or Pagani. The per capita disposable income of an average Indian living in the city has gone up and they are a big market to tap on. RE is in the right place at the right time.
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As it is spotting an Enfield on the road is like seeing a commuter bike.
Mate as mentioned above the income of an average Indian staying in a city has gone up and those number of people are huge. The market size although looks small on paper compared to Splendor, Activa and Victor sales. But for a manufacturer like RE it is huge. The numbers will only grow as more and more people opt for this aspirational brand that was once out of reach.
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I would rather want them to bring out more variety than selling huge numbers of of a few models.
+1 to that mate, I fully agree that they should bring out more models, but bringing out new models requires time and money. RE has been profitable only for the last 5 years and they are slowly looking at transforming themselves, for example: from pushrod to OHC engines along with twin cradle frame chassis. Remember slowly is the word. While being at the helm Sid Lal had experienced the turmoil and backlash that RE had to face from the enthusiasts when they introduced the AVL engine and the CI engine(CDI) with left side gear shift. This time he is taking it slow and also knows the market has matured and is ripe for introducing changes. He has promised two new models, we have to just wait and watch.

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There is no uniqueness in owning an Enfield anymore.
I had the same query from some of the aspiring RE buyers. I just asked them a simple question, "You don't want to buy a RE just because it is not unique any more, is that it? is there nothing else you are considering?". I didn't probe them further but next thing I saw was them riding RE's after a couple of months. If one wants uniqueness there are a lot of options to choose from like Indian Chief, Harley Davidson Electra Glide, Triumph Rocket 3, etc. So to each his own mate.
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Old 9th November 2015, 16:10   #4
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Default Royal Enfield plans third plant to double production capacity

Last year, we had reported that Royal Enfield had purchased land to set up a new manufacturing plant (click here to read report). This plant is expected to come up in Vallam Vadagal near Oragadam, Tamil Nadu.

The new factory will be built on 50 acres of land have been purchased by Royal Enfield for Rs. 57 crore. The construction of the plant will start next year. The company aims to double its production capacity to 9,00,000 units per annum from the current 4.5 lakh units by 2018.

At present, Royal Enfield has two manufacturing facilities - one in Thiruvottiyur and one in Oragadam. The demand for the company's products rising and there is a waiting period for them. In the period January-October 2015, Royal Enfield's sales stood at 364,178 units. In the same period last year, the company sold 2.40,993 units.

The company has already increased the capacity of its Oragadum plant to try and reduce the waiting period. The third plant will help immensely in catering to domestic and international markets.

Royal Enfield is working on two new platforms. While the product on the first platform will be launched in 2016, a product on the second one will be launched in 2017.

Source: ET Auto
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Old 9th November 2015, 17:31   #5
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Default Re: Royal Enfield to set up 3rd plant in India

A 3rd plant, wow! Kudos to Royal Enfield for their growth & success. Here's an awesome thread on the topic - link (Royal Enfield: Their tremendous growth...and the challenges ahead).

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Originally Posted by tharian View Post
They are losing their identity going after numbers.
As it is spotting an Enfield on the road is like seeing a commuter bike.
I beg to differ. Mercedes' volumes have grown multiple fold. The sheen or identity of the brand isn't affected, right? Over the last decade, Harley Davidson has also grown.

As long as Royal Enfield sells the right product, they won't lose their identity. Seeing how Royal Enfield is pushing all the right buttons, I'm pretty sure they are going to improve their shoddy quality & old technology. They know it's vital to growth.
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Old 9th November 2015, 18:36   #6
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Default Re: Royal Enfield to set up 3rd plant in India

Quote:
Originally Posted by tharian View Post
They are losing their identity going after numbers.
As it is spotting an Enfield on the road is like seeing a commuter bike.

I would rather want them to bring out more variety than selling huge numbers of of a few models.

There is no uniqueness in owning an Enfield anymore.
Supplementing these thoughts in my words from an "ex Bulletier" (cast iron) perspective,

There were times when Royal Enfield's were not everyone's cup of tea. The Right side gear and the art of smooth kick start were the things to be mastered. Hence these were mostly desired bikes but not everyone would buy them. I have enjoyed those decades as being exclusive, the eyes of people with awe and someone who could tame the beast. For this species of bullets the sound, the mindset of a Forever-bike and the art of tackling the minutest issues yourself was the status quo.

From the Royal Enfield perspective:

The market was limited and it was a cult classic, albeit a dying breed. The AVL was largely flopped due to sound even though technically it was far superior than the Cast Iron. Come UCE and suddenly the bullet was available to all, thus a new breed of bulletier's was born.

This breed has a technologically superior product with a lot of add-on features at hand. The dreams of owning a bullet could be possible now, minus the tappet adjustments, the point adjustments, the oil supply etc. The evolution of Royal Enfield due to the brilliance of Siddharth Lal turned the fortunes. And obviously once the product is successful then max profit from max sales will be the only motto. Rise in demand resulting in Mass production resulting in Less Exclusivity but this also resulted in globalizing the brand name to epic proportions.

Here is where the debate of Cast iron vs UCE takes shape. Sadly after a few years of ownership we are seeing a huge lot of new or relatively new bikes being in the sellers market because the expectations were different. But if you buy the new UCE with a different mindset of a modern tourer then its a totally different beast.



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Originally Posted by GTO View Post
I beg to differ. Mercedes' volumes have grown multiple fold. The sheen or identity of the brand isn't affected, right? Over the last decade, Harley Davidson has also grown.

As long as Royal Enfield sells the right product, they won't lose their identity. Seeing how Royal Enfield is pushing all the right buttons, I'm pretty sure they are going to improve their shoddy quality & old technology. They know it's vital to growth.

Coming to the brand name - surely Royal Enfield is enjoying the huge success. Step by step they are progressing in the right direction, with organizing rides and merchandise and limited editions etc. But their biggest mistake is not concentrating on ASS and quality control departments. The sales department is enjoying the mass boom and hence the new plants and increase in capacities. But the number of service stations are scarce, the quality of basic parts is below average. The technology, although better than the previous generation Enfields, still requires a lot of betterment to be desired of. Hopefully the 410cc rumoured engine will be a good 3 or 4 levels higher in terms of quality and refinement.
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Old 9th November 2015, 19:17   #7
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Default

As a prospective customer of a Royal Enfield, want them to prosper and get all silly niggles off the line.

If not Japanese levels at least bare-able levels of reliability and strictness in matters of Quality and they should "Assure" the Quality rather than "Control" the Quality during manufacturing.

They should develop a good Team that enacts all the customer complaints that are generated by customers when their bikes are used in different conditions and see to it that the future production bikes aren't infested by the niggles. For Eg: The cracked speedometer console in RE Thunderbird 500's where many had to change it under warranty. Such small issues aren't good for the company when though it is selling well.

Last edited by a4anurag : 9th November 2015 at 19:21.
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Old 10th November 2015, 10:20   #8
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Default Re: Royal Enfield to set up 3rd plant in India

Quote:
Originally Posted by tharian View Post
They are losing their identity going after numbers.
As it is spotting an Enfield on the road is like seeing a commuter bike.

I would rather want them to bring out more variety than selling huge numbers of of a few models.

There is no uniqueness in owning an Enfield anymore.
Agreed. There used to be a time (started dying down after the Classic arrived) when if you got a new Enfield, any existing rider who spotted you would pull up next to you and welcome you to the community etc. As special as that exclusivity is, it was working well for the buyers..not the manufacturer. At some point, we have to understand that RE is a business at the end of it all and passion and cult following don't mean much to the shareholder.

I believe the 3rd plant will be in operation for 3 purposes:

- Increasing production to reduce waiting periods.
- Make the use of more high end machinery and high quality components for products that can actually compete in global markets, which aren't as forgiving of lackluster quality as India has been.
- Produce models from the two new platforms, that probably need an entirely different production setup than Thiruvottiyur and Oragadam.

Last edited by Tushar : 10th November 2015 at 10:21.
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