Taking a cue from the buoyancy out there, numerous cycle makers like Hero Cycles, Avon, TII, and others, are aiming to a windfall by both increasing their capacities or enhancing their export markets and even going the additional mile by venturing into e-bikes ( a cycle fitted with a motor).
Hero Cycles, a unit of Hero Motor Company (HMC), instructions about 42 per cent of the organized market of bicycles in India. It stated it has seen double-digit progress in FY21 over FY20, particularly in premium and premium youngsters. Sensing the bullish sentiment, the corporate has introduced an funding outlay of over Rs 1,000 crore that will probably be utilized until FY 2023-2024. Spread throughout 100 acres, the Valley is anticipated so as to add a producing capability of two million (SKD bikes) per yr with instant impact and make use of over 9,000 individuals when absolutely operational. While HMC will spend Rs 350 crore in operationalising it, the distributors will usher in an estimated Rs. 400 crore. Another Rs. 300 crore will probably be a phased funding by HMC over the subsequent couple of years to fortify its manufacturers, R&D, and distribution throughout the EU & the UK.
Likewise, one other main bicycle participant Avon Cycles has additionally pledged 100 crore. For 2021-22. The firm firmed up its plans to construct a further annual capability of 10 lakh bicycles by subsequent yr for home and export market within the premium phase. It has additionally invested considerably in a bicycle startup, MyByk primarily based out ofwhich might launch public sharing of bicycles throughout India.
Homegrown cycle maker TII Cycles, a unit of Tube Investments of India claims to have witnessed a 20 per cent progress in its topline throughout FY 20. Capitalizing on demand for Indian bicycles in abroad markets, it’s gearing as much as broaden its export base to Europe, America and different first world nations. The firm expects its contribution from export markets to double to 30 per cent of its whole gross sales within the subsequent 4 years. It can be seeking to strengthen its portfolio by venturing into e-bikes in August this yr.
Pankaj Munjal, Chairman and Managing Director Hero Cycles stated, “The demand for traditional bicycles increased by 50 per cent while that for electric cycles went up by 100 per cent. We are seeing demand in the premium & Kids segment as well,”. On expansion, Munjal said: “We are making one of the biggest investments in the bicycle industry to set up an E Cycle Valley in Punjab.will establish a complete ecosystem for international component suppliers to localise production and help India eliminate its dependence on premium component imports.”
Onkar Singh Pahwa, Chairman& Managing Director at Avon Cycles said, “Buoyancy in demand has reaffirmed our strong belief of good future of bicycle industry in the country. A growth of about 16% was experienced by us which otherwise could have been much more.”
Premium & Super Premium Category Report Growth
Even the premium cycle category seems to be clocking growth. As per industry estimates, the premium bicycle segment (Rs. 15,000 – 30,000) is worth approx. Rs. 350 crore and the super-premium segment (above Rs 30,000) is worth approx. Rs 110 crore in India.
Sukanta Das, CEO, Firefox Bikes, affirms, “The premium cycling industry has seen 6X demand in growth. We have clocked a 2X growth last year and we continue to grow at the same rate. Our online sales through our website have seen a 10X growth. We are currently looking at doubling our turnover again in 2022 as the strong demand for bikes that started during the lockdown last year is set to continue for the next two years.”
Trek, which operates within the super-premium phase and has merchandise beginning at Rs. 31,699 going as much as Rs. 20 lakh for personalized high-end efficiency bikes witnessed a gross sales surge of greater than 300% since March 2020 when the lockdowns began. Navneet Banka, Country Head -Trek Bikes India maintains, “The demand for bicycles continues to be strong and we believe it will remain strong for entire 2022 also. “During the lockdown, we have seen demand for our mountain, hybrid & fitness range of bicycles go up by more than 200 per cent. Since the past two months, demand for our ‘performance bikes’ has increased almost 100 per cent – these are Trek’s high-end performance bikes starting at Rs 1,50,000 and going up to Rs 12 lakh,”
Dip, Recovery & Outlook
Despite lockdowns, staggered unlocking of cities, etc, the overall domestic bicycle market dipped only marginally from 12.81 million units in FY 2019-20 to 12.16 million units. Industry players reckon that the key reasons for this increase in demand has been a greater focus on fitness across all age groups, closure of gyms for extended periods & realization amongst fitness enthusiasts that cycling is a great way to stay fit – while having fun & enjoying the outdoors.
The Indian bicycle industry, which is the second-largest in the world, is classified into four segments – standard, premium, kids and exports. Demand for standard bicycles, which accounted for half of all bicycles sold in 2020, is driven by largely driven by government purchases. KPMG claims that the Indian bicycle industry currently uses 1st generation technology (Steel) and imports 2nd to 4th generation (Aluminium alloy, C-fibre, Titanium material) premium parts
Demand for premium and kids’ bicycles, accounting for 40 per cent market share in fiscal 2020, is driven by fitness and leisure needs are seeing the maximum surge. Exports and sales of other kinds of bicycles constitute the remaining 10 per cent of demand. Manish Gupta, Senior Director, CRISIL Ratings, said, “Although sales were impacted in April-May due to the second wave and consequent lockdowns, it has started picking up in June and expected to reach normalcy in July. We expect the kids and premium segment to witness significant growth over medium terms while demand for standard bicycles is also likely to grow after two dull years, albeit on a low base.”
As per a latest report by CRISILcycles gross sales are more likely to contact 1.45 crore models in contrast with 1.21 crore models final fiscal.
“Given the global boom in bicycles and global inventories at an all-time low, manufacturers of bikes and related components are re-organising supply chains and getting ready to cater to the rising demand and making them more affordable. The cycle industry is expected to re-invent itself by adopting global best practices and setting a benchmark for the Indian bicycle industry, considering the huge domestic demand and export opportunity,” affirms Mohit Bhasin – Partner, KPMG in India.
As Dr. Thakur from AICMA maintains, “From the consumer perspective, infrastructure such as cycle-friendly roads can play a key role in changing perception towards cycling, especially in the cities where motorized vehicles rule the roost. Historically, we have seen the demand for cycles grow with better and safer roads. Besides, having dedicated car-free days and zones, exclusive cycling lanes will remain important interventions.”