Royal Enfield to Invest INR 700 Crore on Global Platform Development

Royal Enfield is ready to invest INR 700 Crore in the FY19-20, most of which will go into the development of global platforms at their under-construction technology centre at the Vallam Vadagal plant in Tamil Nadu. The production target for Royal Enfield motorcycles will jump from the current number to 9.5 lakh units for this fiscal, still 50,000 units lower than what most experts had guessed the way Royal Enfield posted the sales number in the start of 2018. The number will stay more or less similar for the Indian market while their new production centre in Thailand will see the introduction of the first non-Indian batch of Royal Enfield motorcycles. The production number for the new facility has not yet been revealed.

The two products falling under the 650cc segment will contribute to the increase in a number of units produced globally as not all markets are focusing on single cylinder engine under such heavy motorcycles. The South Asian regions can benefit from both the series of products while Europe, the US, and other developed markets will prefer the use of the bigger engine with more refined character and not a huge difference in price. The price tag of current generation Classic 500 and Interceptor 650 differs by less than INR 50,000 worth pricing and when equated for developed markets, the number remains just $1,000 or even less than that for several regions.

The introduction of Bobber 838 will further take things into the favour as brands like Triumph and Harley Davidson offer same segment products at a much higher price tag in comparison to these options. The Bullet Trials is already available in certain markets and will soon enter the remaining options with their increased production. Last year, Royal Enfield had a budget of INR 800 Crore for development and research, further clearing that their numbers are falling with passing months and so is the limit of spending on new products and technologies by the Indian brand.