Royal Enfield Mulls Building CKD Plant in Mexico as Brazil Becomes Its Largest International Market

Royal Enfield is mulling setting up a completely knocked down (CKD) assembly facility in Mexico after the country significantly raised import tariffs on motorcycles, the company's Chief Executive Officer B Govindarajan said Thursday, according to Autocar Professional.

"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 was quoted as saying following the announcement of Eicher Motors' FY26 earnings.

The remarks come as Royal Enfield continues expanding its global footprint amid rising demand for mid-sized motorcycles beyond India. The company reported that its international volumes rose approximately 20% in the financial year ended March 2026, with around 120,000 units sold in overseas markets and international revenue coming in at roughly ₹3,288 crore. 

Its existing CKD network spans Brazil, Colombia, Bangladesh, Nepal and Thailand.

Govindarajan noted that tariffs in Mexico had climbed steeply this year, pushing the company to reassess its approach to 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.

The Eicher Motors-owned motorcycle brand already runs several CKD assembly operations worldwide and could apply the same model in Mexico if circumstances demand it. 

"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," Govindarajan said.

Brazil has emerged as Royal Enfield's single largest international market and one of its fastest-growing. "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," Govindarajan said. The company sold over 25,000 motorcycles in the country last year and is now working to establish its own CKD facility there, alongside existing partnerships.

"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," he said.

Despite global headwinds, Govindarajan said the company remained "cautiously optimistic" about its international business and was holding its position in key markets.