By Bhargav TS
Royal Enfield has commissioned its second plant, which will help bridge substantial demand-supply mismatch in its products
Royal Enfield, manufacturer of the iconic Bullet motorcycles that are described to be made like a gun and go like a bullet, is on the growth mode. The company, which makes bikes at its plant in Thiruvottiyur, near Chennai, is now betting big with the inauguration of a Rs 150-crore facility in Oragadam on the outskirts of the city. Ever since Royal Enfield started operations in India, in 1955, the company has been based in Thiruvottiyur and the motorcycles ‘handcrafted in Chennai’.
In recent years, the demand for Royal Enfield bikes has increased exponentially resulting in waiting periods as long as six to eight months and even a year for models like the Bullet Classic 350 and 500. This was because of capacity constraints in the Thiruvottiyur plant. Now with the new plant in place, Royal Enfield will roll out 800 units a day on a two-shift basis and hopes to cater to the demand and supply situation that is leaning heavily towards the deficit side.
The 50-acre facility has an installed capacity of 150,000 units per annum and the company plans to ramp up capacity up to 175,000 units from both plants towards the end of this year. In the second phase of expansion, the Royal Enfield plans to produce 250,000 units per year by 2014. The new facility would initially produce the Desert Storm and Thunderbird vehicles and by the end of the year, the company expects the entire range including the Bullet and Classic.
Siddhartha Lal, Managing Director & CEO of Eicher Motors (which owns Royal Enfield), said, “We are witnessing a huge surge in demand in the recent past, recording a growth of over 50 per cent for each of the last two years. We have been extremely successful in stretching our 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 for our motorcycles has continued to outpace the supply. Therefore we have conceived of this new facility on a much larger tract of land and created a master plan that can take the eventual production to 500,000 units per year. With this new facility, we now have the ability to scale our production quantity quickly in response to market demand.”
The Oragadam plant has a higher level of automation than the older one with state-of-the-art inventory and assembly systems. Mr Lal said, “The new plant has been benchmarked to achieve the highest level of quality and productivity. We have re-tooled many of the parts that make up our motorcycles – so that they are of exacting accuracy and finish.” The manufacturer is also looking at implementing a chassis/engine number based data bank, which will hold all data about motorcycles assembled at the plant. This will help substantially in diagnosing issues with the motorcycle after sale.
Initially, both plants will be utilised for manufacturing the entire range of motorcycles. While the paint shop and final vehicle assembly will be moved to the new plant, the engine assembly will remain at Thiruvottiyur plant. The Oragadam facility features a modern assembly lines and paint shop capable of handling everything from the base coats to final finish of all components (chroming however will still be done from the old plant). The state-of-the-art paint shop has a zero-liquid discharge, thus ensuring that no paint is wasted and with bike parts painted in the horizontal mode, where the surfaces are more optimally painted.
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.
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. 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 to customers. Apart from lowering the waiting period, the new plant will also roll out the new Caf? Racer, the Continental GT by the end of this year.
While looking into the distribution channel, the company will be adding new dealerships in the Indian market and by the end of this year will have around 230 dealers across the country. Apart from the domestic market, Royal Enfield exports its motorcycles to 40 countries and plans to be stronger in the existing markets. Currently, the
US is the largest export market for Royal Enfield, with 600 motorcycles shipped every month. For the record, last year the company shipped about 3,500 units to the country from the total of 113,000 units made in India.
The new manufacturing facility in Oragadam sprawls over 50 acres and has initial production capacity of 150,000 units per annum
Mr Siddhartha Lal, MD & CEO, Eicher Motors, at the roll out of the first motorcycle (a 500cc Desert Storm) from Royal Enfield’s new facility at Oragadam near Chennai.
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