Eicher Motors' board has approved an investment of Rs 12.25 bn for the first phase of Royal Enfield's greenfield manufacturing facility in Andhra Pradesh, taking forward a previously announced Rs 25 bn expansion plan to support long-term growth and rising demand. The board approval on July 29 confirmed that the Phase I outlay will be financed entirely through internal accruals. The move initiates a phased build-out intended to scale manufacturing capability.

The first phase will provide an annual production capacity of 0.45 million (mn) motorcycles at full utilisation and is expected to be completed by FY2030. Company filings indicate the facility will be developed in stages as part of the larger greenfield project and that the initial investment covers site development, plant equipment and related infrastructure. The board decision follows the company’s May announcement of the Andhra Pradesh project.

Royal Enfield currently operates an annual manufacturing capacity of about 1.5 million (mn) motorcycles across its Oragadam and Vallam Vadagal plants in Tamil Nadu and is expanding the Cheyyar facility through a brownfield project. The Cheyyar brownfield expansion is expected to be completed by FY2028 and will take the combined capacity of the three Tamil Nadu plants to roughly 2 million (mn) motorcycles per year. Once the Andhra Pradesh Phase I becomes operational, total annual production capacity across all facilities will increase to around 2.45 million (mn).

The Andhra Pradesh facility is planned to support both domestic and export growth ambitions as the company broadens its mid-size motorcycle portfolio. A regulatory filing said the investment aims to ensure readiness for long-term opportunities and to address near-term capacity constraints as utilisation levels rise. The phased approach will allow the company to align capacity additions with demand evolution.