Eicher Motors Invests Rs 958 Crore to Scale Royal Enfield Output

Eicher Motors today announced a major move to expand Royal Enfield manufacturing capacity, approving a ₹958 crore investment to ramp up production as demand for its bikes surges.

The green light has been issued by the board of the company to a brownfield project at the Cheyyar plant in Tamil Nadu that will raise its annual motorcycle production capacity to as many as 20 lakh units in all the plants as compared to an annual motorcycle production capacity of 14.6 lakh units.

The growth is witnessed because the current facilities used by Royal Enfield are operating to the maximum capacity, and the company has to extend manufacturing to the required level to balance the demand in the market. Regulatory filings indicate that the work on the capacity build-out would begin in the first quarter of FY 2026-27 and should conclude in FY 2027-28. The project will be funded by the internal accruals of the company which will underline the commitment of the company to enhance production without external debts.

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This expansion drive is in line with the good performance of Royal Enfield in the past few months. Eicher has announced a 21% increase in consolidated net profit in the third quarter of FY 2026, and there is an increase in revenue of 23 percent, which is due to high sales of mid-size motorcycles. In addition to the expansion of the capacity, the company indicated that the investment will assist in the fulfilment of the current and future demand since the consumers still prefer its brand of bikes.

The decision of Eicher is timely because Royal Enfield has reported high sales growth and market traction. To avoid overloading the manufacturing, the company will introduce the manufacturing increase in increments and this will introduce approximately 5.4 lakh units of the annual production. Executives reckon that this development will not only cater to the domestic market but also enable Royal Enfield to be stronger in the global market in the mid-segment bikes sector.