'Royal Enfield's core remains TN; Tada for risk diversification'

Royal Enfield, the 125-year-old motorcycle maker owned by Eicher Motors, ended FY26 with annual sales of over 1.11 million motorcycles, marking its second consecutive year above the million-unit milestone. While it has entered the EV segment, it has lined up a

2,200-crore capex plan for FY27, including around 1,000 crore for its Chennai operations, covering new products and tech upgrades.

In an interview, B. Govindarajan, MD, Eicher Motors & CEO, Royal Enfield, spoke about demand trends, the West Asia crisis, expansion in Andhra Pradesh, and EV strategy. Excerpts:

 Can Royal Enfield sustain 1mn-plus sales momentum amid the West Asia crisis?

We sold about 1.11 million motorcycles in FY26, up 23% over FY25. In April alone, we sold nearly 1.04 lakh motorcycles, a growth of around 37% year-on-year. Enquiries are growing by about 23-24%, indicating demand remains intact.

GST reductions have helped, financing availability is improving, and India's growth story remains strong. Premiumisation continues to be a key trend. The market outlook is positive, barring any supply disruptions arising from geopolitical developments. The West Asia crisis has created headwinds for supply chains and commodity prices. The challenge is ensuring supply stability, as the supply chain has faced some disruptions. However, we are beginning to see signs of improvement.

 What prompted expanding manufacturing in AP?

Tamil Nadu remains our home base. Our major manufacturing facilities, technical centre and headquarters are located there, and we are building a total capacity of nearly 2 million units in the state. As we grow, however, we need to evaluate risks that could affect the business. One of them is concentration risk. Having all operations in one location creates vulnerabilities, and the Board has been discussing ways to mitigate that.

We wanted a location that would allow us to continue leveraging our vendor ecosystem in TN while reducing concentration risk and retaining logistical advantages. Tada emerged suitable due to the availability of a good land parcel and attractive fiscal incentives. Our vendor ecosystem will continue to remain in Tamil Nadu.

 What is the Flying Flea EV strategy and how do you see the electric motorcycle segment evolving?

We are not approaching EVs as a purely utilitarian or commuting opportunity.

We have always sought to create new categories rather than participate in existing ones. Just as we built the middleweight motorcycle segment, our ambition with Flying Flea is to create a new space in electric mobility. The concept is "city-plus" — a lightweight premium motorcycle designed for urban mobility as well as short explorations beyond the city. Our first product, Flying Flea (FF) C6, has been launched in Bengaluru, and it will be followed by the FF S6 scrambler.We believe there is room for a differentiated and emotionally engaging electric motorcycle experience.

 What is Flying Flea's customer proposition?

Flying Flea is positioned as a premium electric motorcycle, not a cost-per-km commuting solution. The focus is on delivering a motorcycling experience through design, engineering, and tech. We have invested in areas such as the girder fork suspension, battery integration, operating system, and user interface.

The motorcycle is intended for city and city-plus mobility rather than long-distance touring. While range will be compared with competitors, it is not the defining feature. We are confident it will be competitive for its intended use case, but the larger proposition is about creating an engaging premium motorcycle experience that is largely absent in today's EV market.

 How prepared are your manufacturing and service networks for EVs?

Developing Flying Flea required building an entirely new ecosystem.

We have onboarded about 35 new suppliers, largely in South India, for EV-specific components such as motor controllers, battery management systems and vehicle control units, while continuing to leverage our existing supplier base for common parts. The electric motorcycles will be produced at our Vallam Vadagal facility near Chennai, where we have established a dedicated EV unit with an annual capacity of about 1.5 lakh units. We will follow a phased rollout, beginning with one city and expanding gradually.Initially, Flying Flea will be sold through a shop-in-shop format within Royal Enfield dealerships. Service support will follow a hub-and-spoke model, supplemented by over-the-air updates and digital diagnostics.

 Heritage motorcycles remain the core of your portfolio. As premiumisation gathers pace, will that continue?

Our portfolio is built around three platforms — 350 cc, 450 cc and 650 cc. The 350 cc and 650 cc platforms cater to heritage motorcycling.

The 450-cc platform is aimed at performance-oriented riders and the growing adventure segment. Models such as the Classic, Bullet, Meteor and Hunter are built on the 350-cc platform, while customers seeking larger-displacement motorcycles with a similar riding character can choose from the 650-cc range. Riders looking for stronger performance have the 450-cc liquid-cooled Sherpa platform. This allows us to cater to a broad spectrum of customer preferences, from traditional leisure riding to modern performance motorcycling.