Royal Enfield has revealed plans to set up its second Completely Knocked-Down (CKD) assembly unit in Brazil, with operations expected to start in Manaus by January 2025. This new facility, developed in partnership with Grupo Multi, represents a significant move in the brand’s strategy to increase its presence in the Brazilian market and South America as a whole. The new plant will boost local production capabilities, reduce delivery times, and support the growing demand for Royal Enfield motorcycles in the region.
Boosting Local Production in Brazil
The decision to build a second CKD unit in Brazil comes at a time when the demand for mid-size motorcycles in the country is rising. By localizing assembly, Royal Enfield aims to reduce its dependency on imports, which are subject to tariffs and logistical complexities. Local production will allow the company to offer more competitive pricing and maintain a consistent supply of motorcycles to meet market demand.
The new facility in Manaus will be Royal Enfield’s second manufacturing site in Brazil, following its partnership with Dafra, a local motorcycle manufacturer. According to Gabriel Patini, Executive Director for Latin America at Royal Enfield, the new plant will allow the company to improve its response to customer needs and accelerate delivery times. “With Dafra and Grupo Multi handling production, we can meet the demands of the Brazilian market more effectively,” Patini said.
This move to expand local manufacturing is part of a larger effort to make Royal Enfield more accessible to Brazilian consumers while managing operational costs. By assembling motorcycles within the country, Royal Enfield can also mitigate some of the financial challenges posed by currency fluctuations and import taxes, which can significantly increase costs for foreign-made goods.
Impact on the Local Economy
Along with enhancing production efficiency, the new CKD unit will also contribute to the local economy. The establishment of the facility is expected to generate hundreds of new jobs, both directly in the assembly plant and indirectly through the local supply chain. The investment in local manufacturing also reflects Royal Enfield’s ongoing commitment to the regions where it operates, particularly in Brazil, where the brand has already made significant strides since entering the market in 2017.
In addition to creating jobs, the new facility will help develop the local workforce’s skills, especially in manufacturing and assembly. This aligns with Brazil’s economic goals of increasing industrial output and reducing reliance on imports, ultimately benefiting both the local community and the broader economy.
Expansion of the Dealer Network
In tandem with the new assembly facility, Royal Enfield is also working to grow its retail presence across Brazil. The company plans to open new dealerships in key cities, increasing the total number of dealerships in Brazil to 36 by the end of 2024. Cities like Belém, Cuiabá, and Maringá are expected to see new showrooms, making it easier for Brazilian consumers to access Royal Enfield motorcycles and services.
The expansion of Royal Enfield’s dealership network will play a key role in supporting the growing demand for its products. The new dealerships will not only enhance customer access to motorcycles but also offer important after-sales services, such as maintenance and spare parts. These efforts are in line with the company’s goal of improving customer satisfaction and reinforcing its position in the Brazilian market.
South American Growth Strategy
While Brazil is a critical market for Royal Enfield, the company is also focusing on expanding its footprint across South America. The success of the new CKD unit in Brazil will likely help bolster the brand’s position in neighbouring markets such as Argentina, Colombia, and Mexico. Local production in Brazil allows Royal Enfield to supply motorcycles to other countries in the region, which are experiencing similar trends in motorcycle demand.
Royal Enfield’s regional strategy also includes increasing its product offerings and adapting to the specific preferences of South American riders. With the launch of new models like the Himalayan 450 and Shotgun 650, the brand is positioning itself to cater to the evolving needs of riders in the region.
Looking Ahead
The addition of the new CKD assembly unit in Manaus is an important part of Royal Enfield’s strategy to increase its share of the growing mid-size motorcycle market in Brazil and South America. By localizing production, the company can better meet demand, reduce costs, and improve delivery times. Along with its expanding dealer network, this new facility will help ensure that Royal Enfield is well-positioned to compete in a highly competitive market.
Royal Enfield’s focus on local production and retail expansion in Brazil and beyond underscores the brand’s commitment to long-term growth in South America. As the company increases its presence in the region, it aims to solidify its place as a key player in the mid-size motorcycle segment, offering high-quality motorcycles tailored to the needs of South American riders.
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