Eicher Motors Limited approved a proposal to expand manufacturing capacity at Royal Enfield through a brownfield project at its Cheyyar facility in Tamil Nadu, increasing annual production capacity to 2.0 million motorcycles from the current 1.46 million units. The investment is aimed at supporting projected demand growth and accelerating capacity ramp-up using existing infrastructure.
The company plans to invest an estimated INR 9.58 billion in the expansion. The project is expected to enhance operational efficiency while enabling faster scaling of production compared with a greenfield development.
The capacity expansion forms part of the company’s broader manufacturing strategy for Royal Enfield, which continues to account for the majority of Eicher Motors’ volumes and revenue. The additional capacity is intended to support growth across domestic and international markets as the brand expands its product portfolio and geographic footprint.
“This investment will augment our annual production capacity and allow us to meet the expanding existing and projected future demand,” said B. Govindarajan, Managing Director of Eicher Motors Limited and Chief Executive Officer of Royal Enfield. “By scaling our existing Cheyyar plant, we are ensuring a faster capacity ramp-up and cost-efficient operations.” He added that the project is aligned with the company’s long-term growth plans.
The Cheyyar expansion will raise Royal Enfield’s total installed capacity as the company continues to invest in manufacturing assets alongside product development and distribution. Eicher Motors has not disclosed a specific commissioning timeline for the additional capacity, but stated that the brownfield nature of the project is expected to reduce execution time compared with setting up a new facility.
The capacity announcement follows a period of sustained volume growth for Royal Enfield. During the quarter ended 31 December 2025, the brand recorded motorcycle sales of 325,773 units, reflecting year-on-year growth, compared with 269,039 units in the same period of the previous year. The company said the investment decision was taken in view of current demand trends and anticipated future requirements.
Eicher Motors Limited reported higher revenue and profitability in the quarter ended 31 December 2025, supported by volume growth at Royal Enfield and a recovery in the commercial vehicle business at VE Commercial Vehicles Limited (VECV).
For the third quarter of FY2025–26, the company recorded revenue from operations of INR 61.14 billion, an increase of 23 percent from the corresponding quarter a year earlier. Earnings before interest, tax, depreciation, and amortisation rose 30 percent year-on-year to INR 15.57 billion, while profit after tax increased 21 percent to INR 14.21 billion.
VECV reported sales of 26,086 vehicles during the quarter, compared with 21,010 units a year earlier. Revenue from operations at the joint venture rose 21 percent year-on-year to INR 70.19 billion, while EBITDA increased to INR 6.52 billion from INR 5.17 billion. Profit after tax stood at INR 3.38 billion, compared with INR 2.99 billion in the corresponding period last year.
“The third quarter was marked by a strong recovery in the Commercial Vehicle industry following a prolonged monsoon,” said Vinod Aggarwal, Managing Director and Chief Executive Officer of VE Commercial Vehicles Limited and Vice Chairman of Eicher Motors Limited. “VECV delivered its best-ever third quarter performance, with sales of 26,086 vehicles, representing a growth of 24.2 percent over the corresponding period last year.”
Eicher Motors Limited is the listed parent of Royal Enfield and a joint venture partner in VE Commercial Vehicles Limited. Royal Enfield manufactures motorcycles at multiple facilities in Tamil Nadu and supplies to markets in India and more than 80 countries worldwide.
