Royal Enfield Plans 37% Production Boost, Capacity to Reach 20 Lakh Bikes Annually

Royal Enfield is preparing for its next growth phase with a major production upgrade. Its parent company, Eicher Motors, has approved a large investment to expand manufacturing capacity in India. This move shows the brand’s strong confidence in rising demand, both at home and overseas.

958 Crore Investment at Cheyyar Plant

The Board of Directors has approved an investment of Rs 958 crore for a brownfield expansion at the Cheyyar facility in Tamil Nadu. At present, Royal Enfield has an annual production capacity of 14.6 lakh motorcycles. After the expansion, total capacity will rise to 20 lakh units per year. This means the company will add 5.4 lakh units, which equals a 37% increase.

In addition, the company has confirmed that it will fund the entire project through internal accruals. This means it will not take loans or dilute equity for the expansion. Perhaps this decision reflects the company’s strong financial position and stable cash flow.

Phased Rollout from FY2027

The capacity increase will not happen overnight. Instead, the company plans a phased rollout starting in the first quarter of FY2026-27. Full completion is expected by FY2027-28. However, the need for expansion has become urgent because existing plants are operating at near-full capacity.

This step gives Royal Enfield more room to manage rising bookings and festive season demand. In addition, it will help the company respond faster to export orders.

Strong Sales Momentum in 2025

Royal Enfield has seen steady growth across markets. In 2025, the Chennai-based brand crossed the one-million annual sales mark for the first time. It sold 10,71,809 motorcycles during the calendar year. Exports also remained healthy, with 1,32,132 units shipped globally.

Perhaps this strong performance encouraged the company to act quickly on expansion. The brand continues to perform well in the mid-size motorcycle segment, especially in the 350cc category. However, it also plans to grow in higher-capacity and premium segments.

Smart Use of Existing Infrastructure

Instead of building a new factory, Royal Enfield chose a brownfield expansion. This approach allows the company to use its existing supplier network, logistics setup, and workforce at Cheyyar. As a result, execution timelines may remain shorter and more efficient.

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