Why Royal Enfield Halted Himalayan and Guerrilla 450 Production in June 2025?

Eicher Motors (NSE: EICHERMOT), the parent company of Royal Enfield, has recently faced a production hurdle due to global supply chain issues.

Despite Royal Enfield's continued success with best-selling models like the Classic 350, its newer 450cc motorcycles, the Himalayan 450 and Guerilla 450, have hit a roadblock. The reason? A shortage of rare earth magnets used in key components such as gear sensors and alternators.

China's Export Halt Impacts Indian Automakers

The issue stems from China’s move to halt rare earth magnet exports, a critical input for many performance-driven vehicles. This has not only disrupted global automobile production but also impacted Indian automakers, including Royal Enfield.

Several manufacturers have urged the Indian government to intervene and address the overdependence on Chinese imports. For Royal Enfield, the shortage was significant enough to force a sharp cut in production volumes of its 450cc models.

Production of Himalayan 450 and Guerilla 450 Halved

According to Eicher Motors’ Managing Director and Royal Enfield CEO, B Govindrajan, the shortage created a bottleneck in Q1 FY26. He stated, “In the first quarter, RE faced the issue of rare earth magnet supply in the 450cc models. There was a bit of a problem with its production.”

As these models are built on performance platforms requiring advanced tech inputs, the lack of critical materials put pressure on output. As a result, production for both the Himalayan 450 and Guerilla 450 was cut by nearly 50% in June 2025.

Temporary Fix in Place, Long-Term Solution Needed

Royal Enfield has since resumed production by switching to unspecified alternative materials to compensate for the shortage. While this has temporarily stabilised manufacturing, the company stresses that long-term supply chain resilience is essential to avoid future disruptions.

Also Read: Eicher Motors PAT Up 9.4% YoY in Q1 FY26 Results!

Conclusion

The rare earth magnet crisis has exposed vulnerabilities in India's auto supply chain, especially for high-performance models.

While Royal Enfield has managed to weather the storm for now, the situation underscores the urgent need for domestic sourcing strategies or alternative global partnerships. With rising ambitions in premium motorcycle segments, companies like Eicher Motors will need robust supply frameworks to sustain growth and innovation.

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