Royal Enfield Evaluates Setting Up CKD Plant in Mexico

Royal Enfield is evaluating whether to set up a completely knocked down (CKD) assembly facility in Mexico after the country increased import tariffs on motorcycles, the company’s Chief Executive Officer B Govindarajan said on Thursday.

"The Mexico tariff has been slightly changed. We are studying that. Is there a requirement for us to have a manufacturing facility or not? We are constantly evaluating it,” Govindarajan told reporters after announcing Eicher Motors’ FY26 earnings.

He said tariffs in Mexico had risen sharply this year, prompting the motorcycle maker to review its strategy for the market. “We were paying a 15% tariff in Mexico. That has increased to 35% from January. We are studying that. If it is required, we may have to take some action on this,” he said.

Royal Enfield, owned by Eicher Motors, already operates several CKD assembly plants globally and could replicate the same model in Mexico if needed, Govindarajan said.

“We have almost seven CKD plants across the globe for Royal Enfield. So, we have the playbook ready with us. Any country where we need to go with a completely knock-down facility to establish, to be near to the customers, we will use that playbook and then go into that market,” he said.

The comments come as Royal Enfield expands its international operations amid growing demand for mid-sized motorcycles outside India. The company said its international volumes grew about 20% in the financial year ended March 2026.

Royal Enfield sold about 120,000 motorcycles in international markets during the year, generating revenue of around Rs 3,288 crore. The company currently operates seven CKD assembly plants globally, including in Brazil, Colombia, Bangladesh, Nepal and Thailand.

Govindarajan said Brazil had emerged as Royal Enfield’s largest international market outside India and was among its fastest-growing overseas businesses. The automaker is also establishing a second CKD plant in Brazil.

“Brazil led the way with 71% growth during the year. Brazil is now our largest and fastest-growing international market, second only to India in our overall global footprint,” he said.

The company sold more than 25,000 motorcycles in Brazil last year and is also planning to strengthen its local operations there.

“We have two partners with whom we are doing the CKD assembly. Now, we are also working on establishing our own CKD facility, which will also help us in the years to come for the higher growth rate,” Govindarajan said.

He added that Royal Enfield remained “cautiously optimistic” about international business, saying the company was holding its market position despite global uncertainties.

Recently, Autocar Professional had reported that Royal Enfield is planning a sharper round of product interventions this year, including expansion of its offering beyond its existing 650cc segment while sharpening its existing portfolio, a move that also aligns with its broader global ambitions.

Sources said Royal Enfield is planning to introduce five all-new models alongside 13 updates to its existing portfolio in a calibrated push during this year. New model launch plans include the Bullet 650, Himalayan 440, Continental GT750, Himalayan 750 and Scram 450.