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Indian cycle industry:

A bicycle first was seen in India in the year 1890. Import of cycles, however, started in 1905 andcontinued for more than 50 years. Complete ban on imports was announced by the Governmentin July, 1953, but cycle kept on simmering in the country till 1961. In 1890, selling price of an

imported bicycle was around Rs. 45/-; in 1917, during the First World War the price jumped toRs. 500/- but dropped considerably, month by month and came down to Rs. 35/- or so (U. K.

makes) and Rs. 15/- or so (Japanese models). The industry had significant growth during theperiod 1947-68 and was more or less dormant during 1967-71. At that time, cycle was the only

mode of cheap personal transportation to the common man in India, the potential for growth wasconsidered to be good.

With an annual turnover of more than 12 million bicycles , the bicycle industry is one of the

most established industries in India. Now India is the second largest bicycle manufacturer in the

world. There is a tremendous increase in the manufacturers and cycle exporters in the recent

past.There are four major players (Hero cycles, TI cycles, Atlas cycles and Avon cycles) in theorganized sector, while Ludhiana is the main hub for manufacture of cycles and components in

the unorganized space.

Cycles are classified into 2 segments standards and specials. The standard cycles are used for

light transportation of humans and goods. Special category bicycles are differentiated by design

and features and provide to the needs of kids, students and younger generation consumers, as

well as health and leisure segments.

The organized sector of a bicycle industry has seen a decline in demand from the past few years.

Why? Because of the increase in the population of urban areas , the public transport has been

improved and now people can afford the motorized vehicles. But still bicycle is a common modeof transportation in most rural areas of India. Most of the people can now afford it. In 2005, more

than 40% of Indian households owned a bicycle, with ownership rates ranging from around 30%

to 70% at the state level. Along with walking, cycling accounts for 50 to 75 % of the commuter

trips for those in the informal sector in urban areas.3

In india , bicycle companies are now focusing on urban markets by changing the perception of

cycling in the mind of Indian customers. Urban people are now take cycling as a mode of

recreation and fitness.. The concept of cycling as an exercise is fast catching up in urban Indiaand that's the reason most companies are looking at urban markets to drive sales. Interstingly ,

rural market is not contributing much to sales.

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Scope of industry:

The bicycle industry can broadly be defined as the industry that is concerned with the bicycles

and cycling. It includes bicycle manufacturers, parts or components manufacturers, and

accessory manufacturers related to the bicycles. It can also include distributors, retailers, bicycle

organizations, bicycle event promoters, and bicycle related service providers. The industry, withthe changing environment, also caters to the needs of health, gymnasium and leisure segments.

Most bicycle components, spares and bicycle accessories in India, except for free wheels and

single piece bicycle hubs, are manufactured by the Small Scale Sector (SSIs), while the large

scale units are permitted to manufacture bicycle frames, chains and rims for captive

consumption. The manufacturing and export of complete bicycles falls within the organized

sector. The Indian bicycle industry is currently in the midst of making endeavors for enhanced

and increased bicycle exports since the scope for export of Indian manufactured bicycles in the

international market is significant. As per public reports the present level of exports falls within

the range of Rs. 150 crores.6

India produces approximately 10% of the world annual bicycle production, which is estimated at

125 Million units. The annual domestic demand of bicycles in India is approximately 10 million

units out of which around 2.5 million units are a government demand for the various welfare

schemes. Exports out of India are largely to Africa and the less developed economies and

negligible to western markets.

Major players in the domestic bicycle industry are Hero Cycles, TI, Avon & Atlas with 48%,

27% & 14% & 10% of share of volume respectively. Most cycles manufactured & sold in India

are in the low price bracket of Rs. 2,500 to Rs. 5,000.

The market for the premium or the lifestyle bikes targeted towards the lifestyle consumer is just

about emerging. The definition of high end bikes itself is changing. Earlier the high-end bikes

were considered as those selling between Rs. 5,000 to 8,000. However now with global brands

moving into the country this definition is also changing with price-points starting from Rs.15,000

to as high as a few lakhs.