Royal Enfield maker adapts to China’s export curbs, reports strong profit
The shortage of rare earth magnets, a crucial component for electric motors and performance bikes, hit the production of key Royal Enfield models like the Himalayan, Scram and the newly launched Guerrilla.
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Indian automaker Eicher Motors is accelerating its transition to alternative materials, without losing financial momentum as it faced a global supply chain shock triggered by China’s export ban on rare earth magnets. Despite production hurdles in its premium Royal Enfield lineup, the company reported better-than-expected profits for the first quarter, signaling resilience amid disruption.
As per a report by Reuters, the shortage of rare earth magnets, a crucial component for electric motors and performance bikes, hit the production of key Royal Enfield models like the Himalayan, Scram and the newly launched Guerrilla. China controls over 90% of global rare earth production and its curbs have sent ripple effects through the auto industry worldwide.
“We started working on the alternative material about three or four months ago,” said Eicher’s Managing Director B. Govindarajan during a post-earnings analyst call. “Now, the import of that alternative material is not a major issue.”
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TVS Motor and Ola Electric, two of India’s top e-mobility players, are also exploring or implementing rare-earth-free technologies to safeguard their supply chains. Ola has announced its rare-earth-free motors will hit the market by the December quarter.
While supply-side stress looms large across the industry, Eicher’s strong local and international demand has cushioned the impact. The company posted a consolidated net profit of Rs 12.05 billion ($137.6 million) for the quarter ended June 30, up from Rs 11.01 billion a year earlier.
