Royal Enfield is gearing up for a major rise in production as its 350cc models have seen a surge in demand. This sudden boost comes right after the government reduced the GST on motorcycles under 350cc which
made them more affordable for buyers across India.
During its Q2 FY26 earnings call on November 13, 2025, the company said that the tax cut has clearly changed customer behaviour. More people are walking into showrooms, asking about the 350cc Royal Enfield models and more of them are actually booking and buying these bikes.
Royal Enfield shared that its enquiry-to-booking conversion rate has increased from around 20–21% earlier to 29–30% now, which is a significant improvement. This growth is mainly driven by the company’s strong 350cc lineup, which includes the Classic 350, Bullet 350, Meteor 350, Hunter 350 and the Goan Classic. These motorcycles are already favorites in the Indian market and with the new GST benefit, they have become even more attractive to buyers.
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Production Capacity
To keep up with this rising demand, Royal Enfield has expanded its production capacity. Earlier, the company could manufacture around 1.2 million units per year, but through operational improvements and “debottlenecking” processes, it has now increased this to 1.3-1.35 million units.
Debottlenecking means removing small delays or slow steps in the production process so that the same factory can produce more motorcycles than before. This was done in time for the festive season, when demand for two-wheelers surged in India.
New Production Module
Royal Enfield also confirmed that construction of a new production module has begun at the Cheyyar manufacturing facility. This new unit is expected to become operational in the first quarter of the next financial year. Once functional, it will help the company to meet future demands, especially if 350cc sales continue to outperform other segments.
450cc and 650cc Models
While the 350cc models are the best performers right now, Royal Enfield said that its 450cc and 650cc bikes also saw a small rise in sales before the GST change. However, these segments are growing at a slower pace because they still fall under a higher tax bracket compared to 350cc motorcycles.
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