Exports likely to remain subdued for cycle manufacturers

Vijay C Roy

Tribune News Service

Chandigarh, June 9

The export market is likely to remain subdued for the domestic bicycle manufacturers in the current fiscal year also as the industry is anticipating a flat growth. Last year, the industry exported 8 lakh bicycles, mainly to African countries. However, the industry expects the domestic market is likely to witness a single-digit growth this year.

The total industry turnover in the country was around 1.64 crore bicycles last year, with a majority of the sales confined to domestic market. The major bicycle manufacturers in the country are Hero, TI Cycles, Atlas and Avon Cycles.

“I don’t see much happening on the export front and anticipate that the volume will be more or less the same this year as compared to last fiscal,” said TII chairman and Murugappa Group vice-chairman MM Murugappan. Murugappa group company, TI cycles manufactures bicycle under the brand name of BSA, Hercules, Montra, Roadeo, Mach City and Ladybird etc. The company has exported 65,000 bicycles mainly to African countries.

In terms of bicycle manufacturing, India is considered as the second-largest player after China. However, its export is confined to African countries and the Middle-East. So the manufacturers bet big on the domestic market, which is also driven by government purchases to be distributed under different schemes to the rural masses.

The Indian bicycle market comprises two segments — “standards” and “specials”. Standards are the workhorses of the rural economy. These bicycles are economical and also rugged, have remained unchanged for decades. The specials or “fancy” segment comprises new-generation bicycles, which are more expensive and has caught the fancy of semi-urban and urban masses.

“We expect 5-20% growth in special segment this year. However, we don’t foresee any growth in standard segment, so overall growth would be less. Last year, the total domestic market was 1.55 crore,” said KC Ramamoorthy, vice-president, TII.

According to industry experts, special segment is outpacing the standard segment. The standards cycles, which accounted for over 90% of the market in the early 1990s, today account for only 45% of cycle sales in the country and the share of the special cycles is 55%. Industry officials said higher disposable income of the middle and lower-middle classes in the urban and semi-urban areas has led to higher sales of the special category of cycles.

To some extent, the sale of standard cycles has also been affected by irregular monsoons in the past two years since the rural incomes are dependent on the monsoons and standard cycles are predominantly sold in the semi-urban and rural areas.