DARE - Because Entrepreneurs Do

The Delhi High Court on 30 July, 2009 ordered that it will be compulsory for two-wheelers manufacturers and dealers to provide helmet at the time of the sale of the vehicle. The judgment however was not welcomed by All India Helmet Manufacturers Association (AIHMA) on the belief that it will create monopolies. Also there are high chances that it will not be welcomed by people those who already own a helmet and are purchasing a new vehicle nor by those who prefer to buy a helmet which is not available with the dealer.

Anyways, if it is made mandatory, that a vehicle will come with a helmet, then it might push the demand for helmets by these dealers and manufacturers. Economy in which almost 8 million two wheelers are sold annually will create a demand of atleast 8 million helmets annually. Taking a conservative figure that a helmet costs around Rs 250 would suggest that helmet industry will be worth of Rs 200 crore annually for India only. This can certainly open up the opportunity for helmet manufacturers. However there are chances that it may result in monopolies as cited by AIHMA, but if the dealers are allowed to choose their helmet manufacturer/supplier then it may not lead to monopoly and instead may give the opportunity to small helmet manufacturers.

There are two main reasons for better prospects of helmet industry. First, that with this ruling, those buyers of two-wheelers, who do not use helmets and hence do not buy it, has no option but to buy a helmet with their purchase of a two-wheeler. Second, that there has been increasing trend in the sale of two-wheelers and the industry is expected to perform much better in the coming future with increased reach and sale in rural areas. So both these reasons will push up the sales of helmets significantly.