Two-Wheelers

With a production of about 4.5 mn vehicles in 2001-02 and over 8.5 mn vehicles
now, India is the second largest producer of 2-wheelers worldwide, which
includes motorcycles, scooters and mopeds.

The two-wheelers constitute over 75% of the number of units of all the
automobiles sold in India and in terms of passenger vehicles, the share goes
further up by 5% to 80%. The two-wheeler segment's affordability may be
measured by the market penetrations of these vehicles for the target market, the
people aspiring for a personal mode of transport. These vehicles have a better
roadworthiness in India, considering the condition of the roads outside metros
and the big cities. The congested townships make these vehicles highly
maneuverable in their movement. These are used even as cargo carriers,
especially by milk vendors all over the country.

The two-wheeler segments has maintained growth, exceeding 11% during 200208 period, and in the process have expanded their sales from 4.3 mn units in
2001-02 to nearly 8.0 mn units in 2007-08. The year 2007-08 witnessed a drop of
nearly 5% over the preceding year. The fall has been the result of nearly 8.5%
fall registered by the motorcycles segment witnessed during the year. The fall in
the year may be seen in the context of the segment registering a CAGR of 14.4%
during the period 2002-08. While in first half of 2008-09, the segment rallied with
sales growing by 11.5% over the first half of the preceding year, it appears that
the segment has not escaped from the worldwide economic down-turn.

The trend in sales turnover was mixed in 2007-08 while it increased for most of
the companies in 2008-09. Net profit declined for most of the companies in
2007-08 while the trend is mixed in 2008-09.

Scooters

Scooters, which almost disappeared into the dark alleys are making a good
comeback. Just two year ago, of every 100 two-wheelers sold in the country only
12 were scooters. That number went upto 16 in the following year and was
projected to zoom to almost 20 in the next year. The scooter market expanded in
double digits last fiscal, outperforming the two-wheeler market, which grew only
2.6%. In the first 5 months of 2008-09 the segment recorded an increase of
8.3% over the same period in the preceding year.
Total market of scooters was valued at Rs. 30 bn in 2007-08, which registered an
increase of 5.4% over that of preceding year. 125

The scooter segment is led by Honda Motorcycles & Scooters India (HMSI) with
Bajaj Auto, once the leaders relegated to a near exit. TVS has emerged as
another major player in the segment with a share of around 22% against the
leader's 58 %. The other significant contributor is Hero Honda, which made a
debut in the scooter segment in 2005-06. Hero Honda has a market share of
about 15%. Kinetic Motor and Kinetic Engineering are the other producers,
having only a small foothold in the segment.
HMSI has been in India for just over last six years and has already sold over 2 mn
units. Much against its known image, HMSI is seen as a leading scooter
manufacturer in India. In 2006-07, the company sold and exported over 168,500
motorcycles as against about 546,800 scooters. In the first 8 months of 2008-09,
it sold (including exports) 270,000 scooters, registering a growth of over 3% on
its performance of 2007-08. To change the image, HMSI is contemplating to offer
100cc motorcycles in the Indian market. So far the company has operated in the
125cc to 150cc segments only with its brands, Shine and Unicorn.
The other manufacturer to have significantly increased its sales was TVS Motor
Co, recording a 5.6% growth during the year. Hero Honda, which registered only
small sales of 15,000 units in 2005-06 in its year of debut in the segment,
recorded a phenomenal 5-fold increase to close at 93,000 vehicles in 2006-07.
Sales in 2008-09 (upto August) exceeded 100,000 units.
Global Automobiles of Kolkata (in a joint venture with Xenitis group and
Guangzou Automobiles Industry Group of China) were slated to launch a fourstroke automatic scooter by early 2008.

Mopeds

From a significant share of 18.5% in 2000-01, mopeds have literally nose-dived

to a share of less than 5% in the two wheeler segment in 2006-07. The segment
managed to improve its share to 5.4% in 2007-08 with a 13.4% growth in the
production over the previous year. Total market of mopeds was estimated at Rs.
6 bn in 2007-08 recording an increase of 4% over that of the preceding year.

Mopeds registered a growth of 5.7% during the 1990s as against a near

stagnation between 1985-86 and early 1990s. There has been a total slide in the
5-year period ending 2006-07, during which the segment has decelerated to a
negative growth of 1.6% annually. In 2006-07, the segment sold and exported
nearly 393,500 units against over 427,000 units in 2001-02. The falling trend,
however, was arrested since 2004-05, with the segment showing some
resilience. Between 2003-04 and 2006-07, the segment has expanded at a rate
of 8.6% annually. However, in the first 8 months of 2008-09 the segment sales
were higher by 3.9% than the sales in the same period of the preceding year.
TVS continued to maintain a near monopoly in the segment. Kinetic Engineering
and Majestic Auto have now only a nominal presence in the market. Bajaj Auto
has exited the segment.

Moped, as a mode of transport, may remain confined to smaller towns,

patronised either by young girls (mainly students) and people wanting to
graduate from bicycles to an auto-wheeler but not able to afford a scooter or a
motorcycle.

To sustain its leadership in the mopeds segment, TVS Motor brought out
upgraded versions of its product designed for double-seat riding, and continue to
remain popular with the users. Majestic Auto, which was a trend-setter in the
segment, is steadily fading out.

Motorcycles

There has been a steady growth in the demand for motorcycles in India. It has
become a youth icon, particularly among the urban youth charged by speed and
style which motorcycles impart to their personality. The motorcycles overtook
scooters in 1998-99 and have not looked back. The scenario for 2006-07
conformed to the sustained performance in the recent past with sales at over 7
mn, higher by over 16.5% on the preceding years sales. In 2008-09 (first 8
months) sales at 2.85 mn were higher by 14.5% than in the comparable period
of 2007-08.

The total market of motorcycles was estimated at Rs. 220 bn in 2007-08, a

decline of 5% over that of preceding year.

Changing consumer preferences, fuelled by new launches and entry of higher

power capacity of the machines, have propped up the segment markedly. India's
largest motorcycle maker, Hero Honda, posted a growth of 25.5% in sales during
2006-07 with over 3.2 mn units. Other growth drivers have been Bajaj Auto
(24.4%), Honda Motorcycles (67.3%) and TVS (14.7%).
Hero Honda launched a new bike, Splendor NXG in two variants - with spokes and
cast wheels. Splendor brands established a hold on the Indian market with sales
of 1.1 mn units in 2006-07. The Splendor brand made a beginning in 1994, and is
today the largest brand worldwide.
Suzuki made a beginning in 2005-06 (with 1,600 units in sale) and is steadily
making its presence felt through its 2006-07 sales performance, selling over
63,000 units.
The government decided to allow the import of motorcycles above 800cc. This
follows an agreement between the Governments of India and the USA, thus
paving a way for import of high-end Harley-Davidson motorcycles from the US.

Yamaha was to launch YZF-RI (1000cc) and MT-01 (1670cc) superbikes in the
Indian market. The superbikes would be imported as fully built units. Yamaha is
also contemplating re-launching the RX-100 brand, a reminiscent of YamahaEscorts days. The model was withdrawn following the parting of ways between
Escorts and Yamaha.
Bajaj announced its exit from the 100cc segment of motorcycles. Honda
Motorcycle & Scooter India was contemplating to fill up the gap created by Bajaj
in the availability of 100cc bikes, which make up for around 60% of the total
mobike market. Two-wheeler sales of Bajaj Auto increased by 12% during 200708.

Bajaj Auto rode into Indonesia's USD 6 bn bike's market with its flagship model
and plans to set up a regional production base in south-east Asia's largest
economy. It launched the 180cc Bajaj Pulsar. The company initially aimed to sell
100,000 motorbikes in Indonesia in two years.
TVS Motor, which has presence in 100cc to 150cc segments of motorcycles, has
launched an upgraded version of its Apache brand in Apache RTR 160. This was
expected to be costlier than the existing Apache brand by Rs. 4,000 to be sold at
around Rs. 45,000. The company clocked a growth of 14% in sales in 2006-07.
During the year 2007-08, however, its sales declined by 16%. The company has
now decided to focus on lower end of the market, that is, 100 to 125cc segment.
The company launched five new models in 2008-09 (upto December). Despite
the threat of global slow down, the company recorded over 9% growth in
revenue in the third quarter of 2008-09.

Three-wheelers

Three-wheelers are mostly used as taxis for carrying passengers and for haulage
of light luggage. The sale of 3-wheelers increased to over 506,000 in 2007-08
from 548,000 in 2006-07, registering a growth of 25.4%. While the passenger
segment achieved phenomenal 31.7% increase, the growth of cargo carrier
three-wheeler segment registered an increase of over 13%. In the first eight
months of 2008-09, the sales of three wheelers registered an impressive 17.2%
growth over the same period of 2007-08. This was on top of a fall of 7.6% in
2007-08 over 2006-07.

The segment managed an overall 15.3% growth during the 2002-08 period. From
the sale of 215,700 units including exports in 2001-02, sales have shot up to
506,000 units at the end of the period in 2007-08. The high growth passenger
segment makes up for about 70% of the entire three-wheeler segment. The total
market of three wheelers was valued at Rs. 42 bn in 2007-08 which meant a fall
of 8% over that of the preceding year.
Bajaj Auto is the market leader and continues to maintain its dominance. Piaggio
Greaves was the first foray of a foreign major in the three-wheeler segment. It

signals technology upgradation in a market which had remained relatively

ignored. The joint venture, introduced its latest APE range of pick-ups, delivery
vans and, of course, a passenger version. Its sale of 53,000 units in 2003-04,
which was 27% higher than the sales in the previous year, established Piaggio as
a major producer in the segment. It now has a market share of nearly 27%.
Apart from Bajaj, the public sector company, Scooters India, was quite active in
the three wheeler segment following its revival. The company manufactures and
markets three-wheeler under its Vikram brand. It pioneered the production of
electrically operated three wheelers, which are mostly exported to Nepal. Lately,
it has been producing small quantities. Its production in the two years, 2005 and
2006, has remained more or less static at around 15,000 units with a share of
less than 3% in the market.
Honda Motorcycles and Scooters had indicated their intention to foray into the
three wheeler market but no perceptible progress has been reported.
Electric vehicles segment, which includes Mahindra & Mahindra's 3-wheeler
Bijlee, has received a fillip under the new auto policy dispensation, but it has yet
to show any significant presence in the market. M&M, however, had cornered a
share of slightly over 6% in the market.
SAS Motors which took over a state-owned automobile company in China's
Snandone province is planning to drive into India a range of Chinese loadcarrying and passenger electric three-wheelers at a price that is less than half of
that of the Bajaj vehicle. It will be available in both cargo and passenger versions
at the proposed price of Rs. 40,000. In comparison three-wheelers are priced in
at over Rs. 125,000. The vehicles have been developed by Lalyang SAS Motors, a
Chinese company.
Rajkot-based Atul Auto entered with its "Atul Shakti" range of passenger and
loading auto-rickshaws. The company was currently producing 2,100 units a
month and as the company was entering UP, where CNG auto-rickshaws were in
high demand, the capacity was planned to be enhanced to 3,000 units a month.
Electrotherm (India), the promoter of the non-petrol Yo Byks decided to enter into
the 3-wheeler segment in mid-2007 with a battery-run autorickshaw. It is also
working on hybrid electric bus which may take quite sometime to be launched
commercially. The battery operated bikes by Electrotherm crossed sales of
15,000 within a year of its launch. It runs for around 100 km once battery is
charged. The maximum speed of the vehicle will be 50 to 60 km per hour.

Newly Emerging Indicators

The auto industry segment of two-wheelers witnessed the acquisition of Kinetic

Motors by Mahindra (M&M) in 2008. It marked the entry of M&M into the twowheeler segment under a new outfit, Mahindra Two Wheelers Ltd, manufacturing
scooters in the engine capacity of upto 125 cc. The Xemitis Group has yet not
taken off in India. In mopeds, the erstwhile players Kinetic and Majestic exited
the segment. There is now TVS as the sole player.

Following a steady movement post a very stagnant phase, the production of

scooters witnessed a sharp jump in production at 25% and a near 43.5% in 200910 and 2010-11 respectively, to bring it to the stature it had held for years till the
end of the previous millennium (1999-2000). Mopeds have also rallied
significantly, which had ruled the roost till 2006-07, but witnessed a steady
downward trend till 2008-09. However, in the two years (2009-11), the segment
witnessed a smart recovery rising from 6.8 mn units in 2008-09 (having peaked
at 7.1 mn in 2006-07) to a new high of 8.4 mn units in 2009-10 and further to
10.5 mn units in 2010-11. There have, however, been not very encouraging
movements in that the overall two-wheeler segment registered a modest
increase of 2.9% in 2011-12. There have been modest to smart gains reportedly
in the following two years.

India's largest producer Hero Motocorp has continued to look up. Its Leap hybrid
is to find way into the US and European markets. The hybrid is slated to be
launched in India in February 2015. The company plans to have 20
manufacturing facilities worldwide by 2020. Besides its other offerings are also in
line with its expansion strategy.
Three-Wheelers

In the three-wheelers segment, while Bajaj continues to dominate, Piaggio has

also carved a significant presence in the market. The production witnessed a
downtrend between 2006-07 and 2008-09, falling by over 10.5% in the two
years. However, the subsequent years witnessed the segment peaking with a
production of nearly 800,000 units, having witnessed a growth of nearly 61% in
the period 2009-10 on 2008-09, and 29.2% in 2010-11 over 2009-10.

Although the three-wheeler segment registered gains in 2012-13, with its

passenger segment being the main puller. The goods segment remained
sluggish.

Corporate Top Line and Bottom Line of Selected Companies

(Rs. in Million)
Companies

Top Line

Bottom Line

2012-13

2013-14

2012-13

2013-14

Bajaj Auto

194899

197176

30436

32433

Hero Moto Corp.

235827

251249

21182

21091

75105

83790

1975

1863

TVS Motor Co.

Officially Recorded Production and Exports

(In '000 Number)
Production

Segments

Export

2012-13

2013-14

2012-13

2013-14

3 Wheelers

839.80

830.10

303.10

353.30

2 wheelers

15744.20

16879.90

1956.40

2083.90

3026.50

3676.20

91.10

93.90

11925.70

12471.50

1862.10

1982.80

792.00

732.20

3.30

7.30

Scooter/scooterettes
Motorcycles
Mopeds

The technology of mass production is inherently violent, ecologically damaging, self-defeating in terms of nonrenewable
resources,
and
stultifying
for
the
human
person.
E.F. Schumacher

Two Wheelers

Demand : Past and Future

Year

(In Million No.)

1990-91

1.82

2000-01

3.55

2001-02

4.30

2002-03

4.99

2003-04

5.63

2004-05

6.57

2005-06

7.57

2006-07

8.90

2007-08

8.00

2008-09

8.50

2009-10

10.60

2010-11

13.40

2011-12

13.80

2012-13

14.80

2013-14

15.95

2014-15

17.10

2015-16

19.10

2016-17

20.75

2017-18

23.00

2018-19

25.90

2019-20

29.50

2024-25

52.00

Market Structure

Market Segmentation
Segment

Share (%)

North

35

East

15

West

25

South

25

Product Variation
Type

Share (%)

Motorcycles

75.5

Scooters

15.5

Mopeds

Market Growth Rates

1990-91-2000-01

6.90%

2001-02-2006-07

15.60%

2006-07-2011-12

12.10%

2011-12-2019-20

10.40%

2019-20-2024-25

12.00%

Variation Coefficient

5.80%

Lead Players
Company
Hero MotoCorp

Share (%)
20

Bajaj Auto

TVS Motor Co.

Yamaha Motor India

Honda Motors

LML

Kinetic Engg.

Majestic Auto

Royal Enfield

Leading Brands

Bajaj, Super, Chetak, Classic, Bravo, Legend, Yamaha, Stride, LML, Vespa, Kawasaki Bajaj, Hero Honda, KineticHonda, Bullet 350, Shogun, Samurai, Caliber, Fiero, Karizma.

Scooters

Demand : Past and Future

Year

(In '000 No.)

1990-91

910

2000-01

880

2001-02

936

2002-03

858

2003-04

940

2004-05

983

2005-06

992

2006-07

1012

2007-08

1080

2008-09

1175

2009-10

1490

2010-11

2125

2011-12

2380

2012-13

2720

2013-14

2750

2014-15

2880

2015-16

3000

2016-17

3270

2017-18

3450

2018-19

3690

2019-20

3940

2024-25

5655

Leading Brands

Chetak 12 V, Super, KH, Classic, NVK, Honda, Actiwa, Select, Supremo, Star, Sensation, Saffire, Super Met,
Bravo, Legend, Super Excel, DX, ZX sports, Marvel, K4, AX100, DX 100, ZX 100, Jupiter, Wego, Scooty Pept,
Scooty Streak.

Market Growth Rates

1990-91-2000-01

(-) 0.03%

2001-02-2006-07

1.60%

2006-07-2011-12

18.60%

2011-12-2019-20

6.50%

2019-20-2024-25

7.50%

Variation Coefficient

5.40%

Strategic Alliances
Company

Collaboration
Cagivo, Italy Kuboto, Japan AVL,
Austria

Bajaj
Kinetic Honda

Honda Motors Co., Japan

LML

Piaggio & CSPA, Italy

TVS-Suzuki

Suzuki Motor corp., Japan

Lead Players
Company

Share (%)

Honda Motor Cycles

52.0

TVS Motor

12.0

Hero Honda Motors

19.0

Suzuki Motorcycles

9.0

Yamaha

5.0

Others

3.0

Motor Cycles

Demand : Past and Future

Year

(In Million No.)

1990-91

0.47

2000-01

2.18

2001-02

2.94

2002-03

3.77

2003-04

4.36

2004-05

5.24

2005-06

6.20

2006-07

7.10

2007-08

6.50

2008-09

6.80

2009-10

8.50

2010-11

10.60

2011-12

12.50

2012-13

12.55

2013-14

13.05

2014-15

15.10

2015-16

15.75

2016-17

17.10

2017-18

18.25

2018-19

19.50

2019-20

20.70

2024-25

30.20

Market Structure

Market Segmentation
Segment

Share (%)

North

32

East

12

West

24

South

32

Market Growth Rates

1990-91-2000-01

16.60%

2001-02-2006-07

19.30%

2006-07-2011-12

12.00%

2011-12-2019-20

6.50%

2019-20-2024-25

7.80%

Variation Coefficient

5.60%

Lead Players
Company

Share (%)

Hero Moto Corp

56.00

Bajaj Auto

25.00

TVS Motors

6.50

Yamaha Motor

3.50

Suzuki

2.00

Honda Motorcycles

7.00

Strategic Alliances
Company

Collaboration

Bajaj Auto

Kawasaki Heavy Inds, Japan

Hero Motocorp

Honda Motor Co, Japan

Royal Enfield

Enfield Cycle Co, UK

TVS-Suzuki

Suzuki Motor Corp., Japan

Mopeds

Demand : Past and Future

Year

(In '000 No.)

1990-91

440

2000-01

492

2001-02

427

2002-03

362

2003-04

332

2004-05

351

2005-06

376

2006-07

382

2007-08

425

2008-09

450

2009-10

575

2010-11

700

2011-12

850

2012-13

870

2013-14

950

2014-15

1110

2015-16

1930

2016-17

2150

2017-18

2400

2018-19

2650

2019-20

1730

2024-25

2975

Market Segmentation
Segment

Share (%)

North

15

East

West

20

South

62

Strategic Alliance
Company

Collaboration

TVS

Suzuki, Japan

Market Growth Rates

1990-91-2000-01

1.10%

2001-02-2006-07

(-) 2.2%

2006-07-2011-12

17.30%

2011-12-2019-20

9.30%

2019-20-2024-25

11.40%

Variation Coefficient

7.80%

Market Structure

Product Variation
55 cc, 60 cc, 64 cc, 73 cc, 74 cc

Lead Players
Company

Share (%)

TVS Motor Co.

100.00

Leading Brands

Scooty, Sunny Spice, Luna, Pride, Safari, Spark, Luna, Super & Magnum, TVS, Hero Puch, Hero Majestic, Toro,
Pacer, Panther, Punch, Spirit, Hero Winner, Style Y2K, Trendy, TVX-XLHD.

Three Wheelers

Demand : Past and Future

Year

(In '000 No.)

1990-91

89

2000-01

214

2001-02

215

2002-03

275

2003-04

352

2004-05

375

2005-06

437

2006-07

494

2007-08

510

2008-09

500

2009-10

625

2010-11

800

2011-12

850

2012-13

890

2013-14

975

2014-15

1050

2015-16

1120

2016-17

1200

2017-18

1290

2018-19

1375

2019-20

1470

2024-25

2110

Lead Players
Company

Share (%)

Bajaj Auto

38.40

Piaggio Vehicles

38.60

Mahindra & Mahindra

12.70

Scooters India

3.00

Force Motors

Neg.

Atul Auto

5.00

TVS

2.30

Market Growth Rates

1990-91-2000-01

9.20%

2001-02-2006-07

18.10%

2006-07-2011-12

11.50%

2011-12-2019-20

7.10%

2019-20-2024-25

7.50%

Variation Coefficient

5.40%

Leading Brands

Bajaj, Greaves Garuda, Vikram, Vijeta TVS King, Mahindra Alfa.

Market Structure

Market Segmentation
Segment
North
East

Share (%)
13
7

West

38

South

42

Source : Intecos - CIER.

Source: Indiastat.com,
http://www.indiastat.com/table/marketforecast20102020/10143/automobiles/101
44/10149/data.aspx, accessed as on 18.10.2016