Royal Enfield's Rs 1,000-Crore Global Moment Hits An Indonesia Snag

Royal Enfield's international business notched its best-ever quarter, with revenue crossing Rs 1,000 crores for the first time and now accounting for 15% of the company's overall topline, even as the motorcycle maker weighs a fresh manufacturing bet in Indonesia to unlock one of Asia's largest two-wheeler markets.

B. Govindarajan, Managing Director, EML and CEO of Royal Enfield, told analysts on the company's Q1 FY27 earnings call that international revenue has doubled over the last two years, with Brazil emerging as the standout market. Royal Enfield now holds the number two position in Brazil's middleweight segment, and retail volumes there have tripled over three years. "Every fourth motorcycle which we are exporting by Royal Enfield has shipped to Brazil now," Govindarajan said, adding that the company is setting up its own CKD facility to support the market further.

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Elsewhere in Latin America, Colombia is driving momentum, while Royal Enfield holds the number two spot in Argentina's middleweight category and is building out its presence in Mexico. In the US, a slow market is showing early signs of recovery after a new trade deal cut tariffs on motorcycles, Govindarajan said.

Royal Enfield has been steadily expanding its international ambitions.
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Europe remains in what he called a "market adjustment phase", with dealers and distributors under business pressure, though Royal Enfield's own distributorship and Riders Club, now past 42,000 members, are laying groundwork for when conditions improve.

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The sharpest new detail from the call concerned Indonesia. Royal Enfield had expected its Thailand CKD facility to grant duty-free access to the Indonesian market under an ASEAN treaty, but Jakarta has held firm on a quota restricting sales to 10,000 vehicles a year regardless. The company has now identified a local assembler and is evaluating a CKD plant within Indonesia itself, with a decision expected this quarter. Govindarajan flagged a roughly 160% luxury tax on motorcycles above 250cc in Indonesia as a persistent hurdle, applicable whether bikes arrive as CBU or CKD units.

Thailand, hit by a two-year tourism slump, is also showing early recovery signs, with Royal Enfield holding the number two middleweight position and building a brand tie-up with Muay Thai and the country's tourism board.

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