Driven by the perennial demand in rural areas, favorable government schemes and a booming children’s segment, the bicycle industry is on a roll
With the arrival of summer vacations in schools and colleges across India, it is boom time again for bicycle retailers.
In a big city like Delhi, a retailer, on an average, sells 250 bicycles during the months of April, May and June. These are mostly in the children and teenager segment that for long has been a money-spinner for bicycle manufacturers. The sales figure in this segment could even touch the 500 mark, depending upon various schemes and discounts to lure customers. Add to this the standard bicycles, women’s bicycles, mountain terrain bicycles (MTBs), and so on, and you have a market large enough to be considered a huge opportunity.
The Indian bicycle market
The size of the Indian bicycle industry stands at US $1.2 billion. The number of units (finished bicycles including all segments) produced is around 12 million, according to an industry source. Of this, the number of units exported annually is about two to three million, which points to a huge demand in the domestic market. According to figures from the Engineering Exports Promotion Council, in 2007-08 India exported bicycles and components worth US $185.42 million.
|India is the second largest manufacturer of bicycles in the world, with 12 million units annually.|
|In value terms, that is US $1.2 billion.|
|Global bicycle production is around 130 million units. Thus, India produces a little over 9% of the world’s bicycles.|
|China makes two out of every three units made globally. That is a huge 66%!|
|Hero Cycles is the largest bicycle manufacturer in the world.|
|Major exports are to the Middle East, Africa, the US, and Latin America.|
|A bicycle dealer in Patna, Bihar, sells around 10,000 bicycles in a month.|
|In 2007-08 India exported bicycles and components worth US $185.42 million.|
As against this, the global figure of manufacturing bicycles is around 130 million units. China is believed to be producing two out of every three bicycles made globally.
|New Age Markets|
|Fitness machines like exercycles|
|Innovative sports bicycles|
|Accessories like bicycle helmets, knee guards, elbow guards, sippers, shoes, tires, bells, fancy baskets and carriers for women’s bicycles.|
India is the world’s second largest bicycle manufacturer after China. Big players in this business have the license to manufacture both bicycle frames and components, while small-scale manufacturers dominate the components market that includes pedals, chains, carriers, nuts and bolts, levers, tires and tubes, spokes, axles and mudguards.
|Huge demand in rural India and |
|Government schemes for school-going poor children|
|Increasing health/fitness consciousness in urban areas|
|Requirements for zero-emission solutions for polluted traffic routes|
|Events to boost bicycle usage in India|
|India as a low-cost manufacturing hub|
|Higher density of suppliers and dealers|
Ludhiana is the hub for bicycle manufacturing in India. “More than 25,000 cycles per day are manufactured in Ludhiana alone. The city is home to over 1,500 factories making bicycles and components, providing employment to 0.25 million people and today it is a jewel in the crown of India’s industrial cities,” according to the All India Cycle Manufacturers’ Association.
|Increasing demand/popularity of motor bikes|
|Rise in migration to cities|
|Long commutes to work in big cities|
|No dedicated cycle tracks in cities|
|High risk involved while commuting|
|Low awareness of cycling as a sport in India|
|Lack of funds for expansion of facilities|
|High costs involved in setting up quality manufacturing units|
|Competition from China and other low-cost manufacturing destinations|
|Rising prices of raw material such as steel and rubber|
The Indian bicycle market comprises four major players—Hero, TI, Avon, and Atlas—who also export to the Middle East, Africa, the US and Latin America. Most of the big players started operations between the mid-1940s to mid-1950s. The oldest and the largest one, Hero Cycles from the stables of the Hero Group, started as early as 1944, but stabilizes its production only after 1956. It has a 48% market share in the Indian bicycle industry. Annual sales volumes of over 4.8 million makes it the largest bicycle manufacturer in the world. Hero Cycles rolls out around 18,500 units every day.
written by Restrepor, March 15, 2011
written by Restrepor, March 15, 2011
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