Royal Enfield's Strategic Moves to Navigate US Tariffs
Navigating Tariffs: Royal Enfield's Success Story
The recent imposition of tariffs by the United States has compelled manufacturers globally to adjust their operations, modify supply chains, and raise prices. However, some brands have managed to mitigate the effects of these tariffs through innovative export strategies. A recent analysis has highlighted how Royal Enfield successfully navigated these challenges to keep their prices stable in the US market. The brand proactively increased its exports prior to the announcement of tariffs targeting automobile imports by President Donald Trump.
According to the report, Royal Enfield exported approximately 9,000 motorcycles to the US, significantly higher than the usual 6,000 units sold annually in North America. This strategic decision was made just before Trump declared a 25% tariff on automobile and parts imports from India.
In addition to Royal Enfield, other manufacturers have adopted various strategies to maintain price stability amid tariffs. For instance, brands like Mitsubishi Motors and Audi have halted deliveries to the US, while Nissan Motor Co has stopped selling two of its SUVs manufactured in Mexico in the US market.
Royal Enfield has successfully captured a notable share of the North American market, holding nearly 8% of the middleweight motorcycle segment. The brand exports models such as the Classic 350, Hunter, Meteor, Scram 411, Super Meteor, and Shotgun to the US.
Expansion into New Markets
Royal Enfield is also concentrating on broadening its product range and penetrating new emerging markets. As reported by MotorCycleNews.com, the brand has recognized its global footprint and established CKD (Completely Knocked Down) assembly facilities in countries like Argentina, Colombia, Brazil, Bangladesh, and Nepal. Additionally, a new CKD facility has been set up in Thailand, allowing the company to save on export taxes and sell vehicles after reassembly. The Thai plant has the capacity to produce 30,000 motorcycles annually.
By strategically positioning itself in Thailand, Royal Enfield aims to strengthen its presence in the lucrative Asia-Pacific market. The brand is poised to expand its global reach with new mid-sized models, including the 750 Interceptor and 650 Himalayan.