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Indian needs to produce quality cycles to better China in trade

Written by: Staff

New Delhi, Sep 10 (UNI) India's bicycle industry will have to improve its quality to grow larger in trade against China -- with which it enjoys more than 55 per cent share of the global market, an industry study says.

Indian bicycle industry, second largest in the world, produces around 19 million units while China leads with a production of 41 million units. The total world market is estimated at close to 100 million units.

In value terms, the current market size is estimated at Rs 18 billion and is growing at over 7 per cent annually, according to PHD Chamber of Commerce and Industry (PHDCCI) study.

The export figure of Indian cycles had crossed 2 million unit mark in 2004-05.

However, the industry exports came down from over a million units in 1995-96 to 633,600 bicycles in 1999-00. But during 2000-01, exports in quantitative terms increased by a whopping 58 per cent followed by a growth of over 40 per cent in 2001-02 at 1,402 million units.

Hero Cycles, Tube Investments of India (TI) and Atlas Cycles are the major exporters of the country.

The fancy models are growing at the rate of 12 per cent annually.

Indian exports of the complete units and components exceed Rs 500 crores.

The opening up of the economy in the wake of the overall liberalisation policies of the government, led to the spectra of cheap Chinese bikes entering into the Indian market.

However, there was no major threat emanating out of these imports, according to the domestic cycle manufacturers.

Because of the usage pattern, apart from the relative purchasing power, the price differential is wide in India.

Between 60 per cent to 70 per cent of the Indian bicycles market is dominated by standard roadster types, the study reveals. In this segment, if one were to add the duties and dealer margins, the Chinese bicycles were costlier, it adds.

The industry made rapid progress in the Punjab-Haryana region with three notable companies, Hero, Atlas and Avon.

Hero Cycles is the largest manufacturer of bicycles in the world with an annual production at around 5.5 million bicycles, enjoying a market share of 40 per cent.


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