May 10: Eicher Motors, the parent company of Royal Enfield, is eyeing global expansion with the cruiser bike brand. The company is currently planning to step up its presence in the South Eastern markets by having a new assembly unit for Royal Enfield in the region.
Royal Enfield, which already has a good traction in the markets of Indonesia, Vietnam and Thailand, will attempt to bolster its presence and utilize the potential of mid-segment bike market with a better presence. Market companies will be introduced by the company with their own employees to better the distribution of its bikes in the markets. Local assembly of the bikes would be embraced subsequently. However, Eicher Motors is also keen on looking into alternate options according to Siddhartha Lal, MD & CEO of Eicher Motors.
The assembly unit comes under its bigger expansion plans revealed by the company that highlights as investment of Rs 1300 crore in motorcycle and commercial vehicle business for the current fiscal. Of the total fund, Rs 800 crore will be earmarked for its motorcycle phase, which also covers the phase-2 development of its manufacturing plant at Vallam Vadagal near Chennai.
The expansion is expected to deliver an increase of 3.5lakh unit in the overall capacity, which is targeted at 950,000 units for the current financial year.
The move was disclosed on the sidelines of the disclosure of the fourth quarter reports of the company, reporting a consolidated net profit of Rs 462 crore for the quarter ending March. The company registered a net profit of Rs 459 crore during the same period in previous FY.
The winding up of its personal utility vehicle business had affected the profit for the quarter adversely this year. Eicher Motors was hit with an impact of Rs 187 crore with the shutdown of its personal utility vehicle arm, which was run in collaboration with USA’s Polaris Industries.