The production of Royal Enfield’s 450cc platform motorcycles was temporarily disrupted because of the scarcity of rare earth elements from China during the April-June period, company officials said.
The magnet supply constraint resulted in halting the production of models, such as Himalayan and Scram, at some point during the quarter, but the company has now stabilized the output using alternative materials.
“In the first quarter, we had that issue [rare earth magnet supply] in those products [450cc platform]. There was a bit of a problem on production,” Eicher Motors MD and Royal Enfield CEO B Govindarajan told investors on Thursday.
“Because those are on performance platforms where rare earth materials were used in gear sensors, alternators, and other areas. So, we had a bit of a pressure point, and we had to stop it.”
The production cut is reflected in the numbers of June and the April-June quarter, when compared on both a year-on-year and a sequential basis. The production of all other segment models was higher during the period.
Data from SIAM shows that the production of its 450cc models – Guerrilla 450, Himalayan 450 and Scram – was reduced to 3,836 units in June from 6,568 units in June 2024 and 5,249 units in May.
The output during the quarter was at 14,203 units, while it produced 16,808 units in the year-ago quarter and 72,580 units in the January-March quarter.
While primarily known for their use in electric vehicle motors, rare earth elements are also vital components in internal combustion engine (ICE) vehicles, powering auxiliary electric systems and sensors.
However, Govindarajan noted that Royal Enfield resumed production of these models using alternative materials and does not foresee any major production challenges due to the magnet supply going forward.
“The team has done a very good job of bringing it back. Scram was not available for some point in time. But that is also now it is available. And the activities on the 450 Guerrilla platform have also started once again on the ground,” he said.
The supply constraint for magnets comes at a time when Royal Enfield is preparing for the rollout of its first electric motorcycle under the Flying Flea brand towards the end of the current financial year.
“We anticipated it some time back and started working on the alternative material about 3-4 months back. That is why we are currently back on production with the alternative material, which we have protected. Now that alternative material import is not a major issue for us, we are out of that challenging situation,” he added.
Electric vehicle OEMs are actively working to bypass the rare earth supply bottlenecks impacting their production output. These initiatives include the development of magnet-free motor technologies and the adoption of ferrite-based magnets.