Royal Enfield to invest Rs. 500 crore in new Technology Centers

Royal Enfield, after getting endorsed by the US president Barack Obama, announced its expansion to his country. The Chennai based Indian motorcycle manufacturer will be sparing Rs. 500 crore ($80m) for planting two centers, one in Chennai and the other in Leicestershire, UK. It will probably use the UK center to cater to the American demand. The money will also be used in other expansion plans.

“Royal Enfield will be investing Rs 500 crore in 2015 towards product development, capex and other development areas,” chief executive Siddhartha Lal said in a statement posted on its website.

“With a view to become the leader in the global mid-sized motorcycling, Royal Enfield will build two new technology centers.”

The Chennai center is projected as complete by the second quarter of the next year, while the Leicestershire center will be completed by the end of 2015.

After watching India’s Border Security Force officers performing various stunts on Royal Enfields, during a trip to India last month, Barack Obama gave approval to the bikes in his country.

“I saw the Republic Day daredevils on Royal Enfield motorcycles,” Obama said during the visit, describing the stunts as a highlight of the military parade to mark India’s Republic Day.

“The secret service doesn’t let me ride motorcycles, especially not on my head,” he added with a smile at the audacious manoeuvres.

Lal said Royal Enfield continued to grow at a “phenomenal pace” last year, selling 300,000 units and has plans to manufacture a total of 450,000 in 2015.

The motorcycle company which is owned by heavy vehicle and bus maker Eicher, also saw a record income of 30bn rupees ($482m) last year, the statement said.

Royal Enfield started life as a British company making single-cylinder engines that produced a distinctive “thump” sound more than 110 years ago, but it closed its last domestic factory in 1970.

Its Indian partner started making bikes under license in 1955, and is today one of the oldest names in motorcycling.

In 2009 Royal Enfield launched a redesigned version of its classic retro-looking “Bullet” model, a move that saw sales take off.