GST 2.0 impact: Royal Enfield sees 6% YoY drop in 350cc-plus motorcycles sales in Nov

Royal Enfield, the maker of the Bullet motorcycle, reported a 6% year-on-year drop in wholesales of 350cc-plus motorcycles in November as the Goods and Services Tax (GST) rate on such motorbikes was hiked from 28% to 40%.

This is the first time in calendar year 2025 when sales of Royal Enfield models with engine capacity exceeding 350cc have seen a decline.

For models with engine capacity exceeding 350cc, Royal Enfield recorded sales of 10,358 units in November, down from 10,996 units in the same month last year.

However, the contraction in higher category motorcycles was more than offset by growth in models with engine capacity up to 350cc—this segment grew 27% year-on-year to 90,312 units in November. The growth was primarily driven by the GST rate cut on motorcycles up to 350cc from 28% to 18%.

Royal Enfield has batted for a common GST rate of 18% on all motorcycles.

“We have been engaging with government agencies to see whether we can have a one equal slab of 18% because it will certainly help in the 450cc and 650cc segments to get scale in India and thereby take the product to international markets where there is potential,” B. Govindarajan, Managing Director of Eicher Motors, and Chief Executive Officer of Royal Enfield, had said in November.

“If we don’t have scale, it puts pressure on the 350cc-plus segment… If we don’t invest enough in R&D and not bring in products because of the GST rate of 40%, then Indian two-wheeler makers, the leaders outside India in the 450cc and 650cc segments, will lose the advantage of making in India,” Govindarajan had said. “If volumes come down, the focus will be on 350cc segment and below. We will miss out this opportunity for Indian two-wheeler industry.”