Royal Enfield Could Build A New CKD Factory In Mexico: Here’s Why

Royal Enfield is evaluating the possibility of setting up a CKD (Completely Knocked Down) assembly facility in Mexico following a sharp increase in motorcycle import tariffs in the country.

Royal Enfield May Setup CKD Plant In Mexico

Speaking after the FY26 earnings announcement of Eicher Motors, Royal Enfield CEO B Govindarajan confirmed that the company is actively studying the situation in Mexico after recent tariff revisions.

According to the company, motorcycle import duties in Mexico have increased significantly from 15 percent to 35 percent starting January 2026. Due to this major change, Royal Enfield is now assessing whether local assembly operations could become necessary for the market.

The company stated that it already has extensive experience operating CKD assembly plants globally and could replicate the same business strategy in Mexico if required. Royal Enfield currently operates nearly seven CKD facilities across international markets, helping the brand stay closer to customers while reducing operational and import-related costs.

These overseas assembly plants are currently located in countries including Brazil, Colombia, Bangladesh, Nepal, and Thailand. The CKD model allows the company to ship motorcycle parts and assemble them locally, which often helps reduce tariffs and improve pricing competitiveness.

The company has been witnessing strong growth in global markets over the last few years, especially in the mid motorcycle segment. The company revealed that its international sales volumes grew by nearly 20 percent during the financial year ending March 2026.

Royal Enfield also highlighted that Brazil has now emerged as its largest international market outside India and one of its fastest-growing overseas regions. It has sold more than 25,000 motorcycles in Brazil last year and is now planning to further strengthen operations in the country.

Apart from working with local assembly partners, Royal Enfield is also preparing to establish its own CKD facility in Brazil to support future growth. Royal Enfield believes its mid-size motorcycles continue to receive strong demand globally due to their retro styling, accessible pricing, and growing adventure touring appeal.

The company is also looking to introduces its 650 and the upcoming 750cc platforms in these countries further strengthening its presence and market share significantly. Their 350cc motorcycles are some of the most valuable models worldwide.