Market Survey

new models of bicycles, viz, sports and high-tech models, both for do-mestic and export markets. It has not paid much attention to R&D. However, of late, some leading man-ufacturers have started devoting more attention to R&D for promot-ing exports. Modern machines and equipment are being installed and even quality control programmes are being instituted. An R&D centre was set up in the 1980s at Ludhiana, which gave a push to the use of im-proved technology.

Ludhiana in Punjab is popularly known as the bicycle capital of the country, accounting for as much as 80 per cent of the bicycles and bi-cycle parts manufactured in India. Kanpur, Mumbai, Sonepat (Hary-ana), Chennai and Kolkata are the other important production centres for manufacture of bicycles and bi-cycle parts.

Hero Cycles has grown to become the world’s largest bicycle maker. The company exports its bicycles to over 52 countries and sells over 42 models.

Another major player Atlas Cy-cles was founded in 1961 by Janaki Das Kapur. It is a name synony-mous with India’s cycling revolu-tion. The Atlas range of bicycles includes standard roadsters, moun-tain bikes, SLRs, children’s bikes, women cycles and sporty exercisers and are exported across five con-tinents. The company has a fully in-house R&D wing recognised by the Government of India. It has three manufacturing units located at Malanpur, Sahibabad (UP) and Sonepat (Haryana) and manufac-tures 10,000 bicycles per day. It ex-ports bicycles and bicycle parts to more than 50 countries all over the world. Atlas bicycles are more pop-ular both in the national and in-ternational markets. The company was the first to get ISO 9001:2000 certificate for implementing the latest international quality man-agement system.

The bicycle industry in India comprises two kinds of units: units

Bicycles continue to be the principal mode of trans-port for the low- and middle-income families. This is because the bicy-

cle is both environment- and people-friendly.

India is the largest producer of bi-cycles next only to China. It produces around 1.25 crore bicycles every year, with almost each day witnessing new

designs, colours and features. Today, the Indian bicycle manufacturing and bicycle parts industry is widely recognised for its quality standards in the international market.

Considering the rising fuel costs and pollution, the bikes are consid-ered ideal. These can be maintained at low costs.

The Indian bicycle industry over the years has introduced a variety of

By: G.P. Gandhi

BICYCLES: Can IndIa CatCh up wIth ChIna?the Indian bicycle industry needs latest R&d facilities to match with world leaders like China and taiwan.

Market Survey

manufacturing bicycle parts, com-ponents and accessories and units manufacturing complete bicycles. While bulk of the parts and com-ponents are manufactured in the small-scale sector, complete bicycles are manufactured in the organised sector. Large cycle units are permit-ted to manufacture bicycle frames, chains and rims for their captive consumption.

More than 90 per cent of the bi-cycle production in India comes from four bicycle companies, viz, Hero Bi-cycles with a share of around 35 per cent followed by Atlas Cycles (24 per cent), TI Cycles (18 per cent) and Avon (15 per cent). Hamilton Indus-tries, RMI Cycles and Cycle Corpora-tion of India are the other important bicycle manufacturing companies in India.

Engineering Export Promotion Council functioning under the aegis of Ministry of Commerce & Industry, government of India, over the years has been playing an important role in promoting exports of bicycles and bicycle parts and components in the international market.

AlI India Cycle Manufacturers Association (AICMA) is the national-level body looking up the interests of the bicycle industry.

world trade Exports by major countries.

Data on the world trade of bicycles and bicycle parts is not available separately. However, the same has been clubbed with product group ‘cycles, scooters, motorised or not, and invalid carriages,’ under the SITC Code 785, published by the United Nations in their publication Yearbook of International Trade Sta-tistics.

As may be seen from Table I, world’s exports of cycles, scooters, etc in 2006 registered an increase of 8.33 per cent over the previous year when the same reached a level of $35,451.4 million as against $32,495.5 million. Japan over the years continues to be the largest exporting country. How-ever, its exports during the period witnessed a marginal growth of 1.66 per cent. The other major exporting countries in 2006 were China, Italy, USA, Germany, Belgium and Spain. Significant export growth was wit-nessed in the case of China (21.87 per cent), USA (17.29 per cent), Spain (17.24 per cent) and Thailand (14.57 per cent).

Imports by major countries. As may be seen from Table II, world imports of cycles, scooters, etc reg-istered an increase of 7.56 per cent over the previous year when the same shot up to $34,484.4 million as against $32,061.3 million.

USA continued to be the larg-est importing country. In 2006, it imported cycles, scooters, etc to the tune of $6459.7 million as against $6369.6 million, registering

Table II

World imports of Cycles, Scooters (Motorised or not) and invalid Carriages by Major Countries

(US$ million)

Country 2002 2003 2004 2005 2006 Per cent growth in 2006 over 2005

USA 4,526.3 4,971.4 5,634.1 6,369.6 6,459.7 1.41Germany 1,812.9 2,045.5 2,204.5 2,565.5 2,715.7 5.85France 1,338.4 1,840.9 2,195.8 2,551.6 2,298.2 (–) 9.93Italy 1,135.9 1,516.1 1,895.5 1,990.3 2,258.4 13.47Spain 631.4 819.0 1,241.4 1,604.1 1,897.9 18.32Japan 1,021.9 1,214.8 1,322.8 1,349.8 1,435.2 6.33Belgium 902.4 1,134.9 1,450.3 1,585.4 1,432.0 (–) 9.68UK 1,048.6 1,191.5 1,353.0 1,418.7 1,414.8 (–) 0.27Netherlands 816.9 896.9 1,010.2 1,018.3 1,092.2 7.26Canada 625.1 765.0 769.5 912.6 993.0 8.80World total 20,761.4 24.409.9 28,745.6 32,061.3 34,484.4 7.56

Source: United Nations, Yearbook of International Trade Statistics, 2006

Table I

World Exports of Cycles, Scooters (Motorised or not) and invalid Carriages by Major Countries

(US$ million)Country 2002 2003 2004 2005 2006 Per cent growth in 2006 over 2005

Japan 5,834.4 6,114.4 7,226.1 7,770.8 7,899.5 1.66China 2,902.6 4,183.2 5,171.4 5,940.7 7,240.2 21.87Italy 1,889.2 2,172.1 2,539.2 2,588.2 2,869.7 10.84USA 1,151.8 1,298.4 1,387.1 1,535.9 1,801.4 17.29Germany 979.2 1,134.9 1,239.5 1,568.5 1,766.6 12.63Belgium 848.8 981.9 1,172.4 1,235.0 1,271.9 2.99Spain 625.3 785.1 895.4 852.5 999.5 17.24France 553.3 762.9 928.1 930.6 993.8 6.79Netherlands 606.6 694.9 817.8 855.7 902.4 5.46Thailand 368.2 464.1 635.9 776.7 889.9 14.57World total 21,064.9 24,969.7 29,666.3 32,495.5 35,451.4 8.33

Source: United Nations, Yearbook of International Trade Statistics, 2006

Market Survey

Table III

india’s Exports of Bicycles and Bicycle Parts and Components during 2003-04 to 2006-07

(Rs crore)

Item 2003-04 2004-05 2005-06 2006-07 Per cent growth in 2006-07 over 2005-06

Bicycles 201.36 168.33 111.68 133.69 19.71 (23.41) (21.08) (14.37) (16.18)

Bicycle parts 658.89 630.15 665.52 692.81 4.10 and components (76.59) (78.92) (85.63) (83.82)

Total (all India) 860.25 798.48 777.20 826.50 6.34 (100.00) (100.00) (100.00) (100.00)

Note: Figures within brackets indicate percentage shares of the total Source: Compiled from the data of Directorate General of Commercial Intelligence & Statistics, Monthly Sta-tistics of Foreign Trade of India, Volume I- Exports including Re-exports, March 2004, 2005, 2006 and 2007 issues, Calcutta

Table IV

itemwise india’s Exports of Bicycles and Bicycle Parts and Components during 2003-04 to 2006-07

(Rs crore)

Item 2003-04 2004-05 2005-06 2006-07 Per cent growth in 2006-07 over 2005-06

A. Bicycles Bicycles 199.88 162.49 107.14 128.68 20.10 Other cycles: rickshaws, delivery cycles, tricycles, toy cycles, etc 1.48 5.84 4.54 5.01 10.35 Total (A) 201.36 168.33 111.68 133.69 19.71B. Bicycle parts and components Other parts and accessories of bicycles 200.73 203.66 288.42 226.24 (–) 21.56 Bicycle hubs 38.11 33.67 28.71 54.92 91.29 Other hubs and brakings 100.06 85.36 67.64 52.19 (–) 22.84 Bicycle frames, forks and parts thereof 43.88 58.03 20.78 51.46 147.64 Pedals and crank gear and parts thereof 37.97 55.21 47.07 42.09 (–) 10.58 Other spokes and rims 68.89 23.12 27.87 41.81 50.02 Brakes including coaster braking hubs and hub brakes and parts thereof 37.15 29.70 33.56 36.41 8.49 Bicycle freewheels 49.60 53.91 98.85 33.18 (–) 66.43 Bicycle rims 30.64 50.36 18.30 24.16 32.02 Bicycle chains 14.21 10.44 9.59 17.46 82.06 Bicycle saddles 9,88 7.67 5.09 12.74 150.29 Other saddles 11.84 4.68 10.15 5.17 (–) 49.06 Bicycle spokes 12.15 12.55 9.17 2.92 (–) 68.16 Bicycle wheels 3.78 1.79 0.32 1.33 315.63 Total (B) 658.89 630.15 665.52 692.81 4.10Grand total (A+B) 860.25 798.48 777.20 826.50 6.34

Source: Compiled from the data of Directorate General of Commercial Intelligence & Statistics, Monthly Statistics of Foreign Trade of India, Volume I- Exports including Re-exports, March 2004, 2005, 2006 and 2007 issues, Calcutta

a marginal growth of 1.41 per cent. In 2006, Germany, France, Italy, Spain, Japan and Belgium emerged as the major importing countries. Imports showed an increasing trend in respect of Spain (18.32 per cent), Italy (13.47 per cent), Canada (8.80 per cent), the Netherlands (7.26 per cent) and Japan (6.33 per cent).

On the other hand, imports dropped in the case of France (9.93 per cent), Belgium (9.68 per cent) and the UK (0.27 per cent).

India’s exportsCategorywise. As may be seen

from Table III, India’s exports of bi-

Market Survey

Table V

india’s Exports of Bicycles and Bicycle Parts and Components to Major

Countries during 2005-06 and 2006-07(Rs crore)

Country 2005-06 2006-07 Per cent growth

Tanzania 55.22 67.09 21.50Nigeria 61.30 46.41 (–) 24.29Kenya 40.55 45.44 12.06Mozambique 27.43 40.27 46.81UAE 29.51 34.20 15.89Uganda 35.15 31.79 (–) 9.56Italy 33.03 26.72 (–) 19.10Malawi 20.83 23.88 14.64Nepal 20.39 23.25 14.64Egypt 27.83 17.87 (–) 35.79UK 21.46 16.18 (–) 24.60Sri Lanka 27.25 12.30 (–) 54.86Ivory Coast 12.19 10.88 (–) 10.75Myanmar 15.79 10.55 33.19Total (all India) 777.20 826.50 6.34

Source: Compiled from the data of Directorate General of Commercial Intel-ligence & Statistics, Monthly Statistics of Foreign Trade of India, Volume I- Exports including Re-exports, March 2006 and 2007 issues, Calcutta

cycles and bicycle parts in 2006-07 registered a marginal growth of 6.34 per cent over the previous year when the same reached a level of Rs 826.50 crore as against Rs 777.20 crore. Bi-cycle parts and components contin-ued to hold a major share—83.82 per cent—in the total exports of bicycles and parts. Complete bicycles, on the other hand, accounted for a share of 16.18 per cent in the year, register-ing a growth of 19.71 per cent over the previous year.

Detailed data on India’s exports of bicycles and major bicycle parts and components during the period 2003-04 to 2006-07 is shown in Table IV.

Countrywise. As may be seen from Table V, in the year 2006-07, Tanzania emerged as the largest market for Indian bicycles and bicy-cle parts and components, thereby putting Nigeria in the second rank which happened to be the largest market for Indian bicycles and bicy-cle parts and components in the year

2005-06. Exports to Tanzania in the year 2006-07 registered a significant growth of 21.50 per cent over the previous year. The other countries registering a steep growth comprised Mozambique (46.81 per cent), Mala-wi (14.64 per cent), Nepal (14.64 per cent) and Kenya (12.06 per cent). On the other hand, the countries show-ing a steep decline comprised Sri Lanka (54.86 per cent), Egypt (35.79 per cent), the UK (24.60 per cent), Nigeria (24.29 per cent) and Italy (19.10 per cent).

Categorywise and countrywise India’s exports of bicycles and ma-jor bicycle parts and components to major markets and select markets in the years 2005-06 and 2006-07 are shown in Tables VI and VII.

Recent developmentsBattery-operated cycles. Avon

Cycles has launched the first bat-tery-operated electric bike called ‘e-bike.’ e-bikes are eco-friendly,

pollution-free and fuel-free. These save money, petrol and environment. The two-wheeler does not require any licence, regis-tration, insurance and maintenance.

e-bike produc-es no noise, runs smooth, is easy to operate and con-sumes very little energy. It has car-rying capacity of up to 75 kg. e-bike has no kickstart, no en-gine to fire up and no sound at idling and is equipped with disk brakes. It can be started with the kick of the ac-celerator. Also, it is very easy to re-charge the battery. The bike is avail-able in assorted

colours.Bicycle production in India.

India is the second largest producer of bicycles in the world next only to China. Hero Cycles based in Ludhi-ana (Punjab) continues to be the world’s largest manufacturer of bi-cycles. While recently addressing its Vendor Meet at Ludhiana, O.P. Munjal, co-chairman and managing director, Hero Cycles disclosed that a total of 11 crore bicycles were manu-factured around the world in 2000. Over 50 per cent of the production was done in China, India and SE Asia. India made one crore bicy-cles, of which 56 lakh bicycles were manufactured by Hero Cycles alone. Hero Cycles, he said, accounts for about 5 per cent of world’s bicycle production. To achieve its continued growth plans, Hero Cycles would be investing substantially in R&D.

Seminar on bicycles. A semi-nar on ‘Bicycles and Components—Standardisation’ was held on March 22, 2007 at Ludhiana. It was organ-ised by Transport Engineering De-partment of Bureau of Indian Stand-ards. At the seminar, it was pointed out that there is need to increase participation in the formulation of international standards to adopt them as national standards without any problem against the backdrop of India being signatory to WTO and a large exporter of bicycles and components. The seminar created awareness among industry circles about the work relating to standards being formulated by BIS both at the national and international levels. It recommended formulation of Indian standards for manufacturing bicy-cles and bicycle parts.

Bicycle makers’ concern over rising steel prices. Major bicycle manufacturers raised their concern over the rising steel prices at the in-auguration of the first ever focused trade show on the bicycle industry, Indo Bike Expo 2004, at New Delhi, and urged the government to take effective measures to safeguard the interests of the industry. The indus-try is facing stiff competition from

Market Survey

Table VI

india’s Exports of Bicycles and Major Bicycle Parts and accessories to important Countries during 2005-06 and 2006-07

(Rs crore)

Item/country 2005-06 2006-07 Per cent growth

Source: Compiled from the data of Directorate General of Commercial Intelligence & Statistics, Monthly Statistics of Foreign Trade of India, Volume I- Exports including Re-exports, March 2006 and 2007 issues, Calcutta

Item/country 2005-06 2006-07 Per cent growth

Bicycles Mozambique 16.11 28.15 74.74 Nepal 6.90 11.39 65.07 Tanzania 2.72 10.05 269.49 Congo P. Rep. 21.46 9.54 (–) 55.55 UAE 7.60 9.39 23.55 Kenya 8.68 8.54 (–) 1.61 Angola 4.42 5.48 23.98 UK 4.48 4.72 5.36 Malawi 4.62 4.70 1.73 Uganda 2.14 4.(-) 87.85 Germany 6.59 3.24 50.83 Ghana 1.84 3.13 70.11 Nigeria 5.34 0.50 (–) 90.64 Total (incl. others) 107.14 128.68 20.10Other parts and accessories of bicycles Tanzania 22.45 23.38 4.14 Nigeria 31.64 18.22 (–) 42.41 UAE 11.50 16.27 41.48 Kenya 18.72 15.76 (–) 15.81 Uganda 18.39 14.85 (–) 19.25 Egypt 13.15 8.52 (–) 35.21 Sudan 5.11 8.21 60.67 Ghana 3.79 6.30 66.23 Myanmar 7.37 4.84 (–) 34.33 Sri Lanka 8.59 4.37 (–) 49.13 Congo P. Rep. 11.13 4.34 (–) 61.01 Nepal 6.14 4.19 (–) 31.76 Argentina 7.90 4.17 (–) 47.22 Burkina Faso 8.92 2.26 (–) 74.66 Ivory Coast 6.08 1.64 (–) 73.03 Bangladesh 7.36 0.95 (–) 87.09 Total (incl. others) 288.42 226.24 (–) 21.56Bicycle hubs Italy 2.98 10.78 261.75 Tanzania 3.07 3.69 20.20 Indonesia 3.28 2.87 (–) 12.50

Argentina — 2.64 — Ukraine 1.41 2.61 85.11 Mexico 1.39 2.18 56.83 Kenya 0.58 1.59 174.14 Malawi 0.57 1.25 119.30 Egypt 0.55 1.22 121.82 Myanmar 0.22 1.04 372.73 Total (incl. others) 28.71 54.92 91.29Bicycle frames, forks and parts thereof Tanzania 3.32 11.53 247.29 Kenya 2,28 6.17 170.61 Ghana 0.15 3.61 2306.67 Egypt 0.47 2.32 393.62 Togo 0.36 2.16 500.00 Uganda 1.06 2.16 103.77 France 0.51 2.14 319.61 Ivory Coast 0.71 1.75 146.48 Italy 0.71 1.24 74.65 UAE 0.79 1.10 39.24 Argentina 0.52 1.05 101.92 Total (incl. others) 20.78 51.46 147.64Pedals and crank gear and parts thereof Tanzania 4.33 5.35 23.66 Kenya 2.78 3.83 37.77 Nigeria 4.69 3.72 (–) 20.68 Togo 0.27 3.36 1144.44 Ghana 0.79 2.83 258.23 Sudan — 2.83 — Malawi 0.90 1.83 103.33 Italy 3.98 1.70 (–) 57.29 Uganda 1.90 1.57 (–) 17.37 Egypt 3.30 1.55 (–) 53.03 Sri Lanka 1.74 0.52 (–) 70.11 France 1.94 0.28 (–) 85.57 Total (incl. others) 47.07 42.09 (–) 10.58

Total (all India) 777.20 826.50 6.34

cheap products being imported from China.

Solar-powered rickshaw. Re-

search and Development Centre for Bicycle and Sewing Machine, a Pun-jab Government concern assisted by

United Nation Development Pro-gramme (UNDP), recently developed a rickshaw that harnesses solar pow-

Market Survey

Table VII

india’s Exports of Bicycles and Bicycle Parts and Components to important Countries

during 2005-06 and 2006-07 (Rs crore)

Item 2005-06 2006-07 Per cent growth

Tanzania Other parts and accessories of bicycles 22.45 23.38 4.14 Bicycle frames, forks and parts thereof 3.32 11.53 247.29 Bicycles 2.72 10.05 269.49 Pedals and crank gear and parts thereof 4.33 5.35 23.56 Bicycle freewheels 4.05 3.69 (–) 8.89 Bicycle hubs 3.04 3.69 21.38 Other spokes and rims 3.15 2.91 (–) 7.62 Other hubs and brakings 4.40 1.68 (–) 61.82 Bicycle chains 1.12 1.10 (–) 1.79 Bicycle spokes 2.16 0.40 (–) 81.48 Total (incl. others) 55.22 67.09 21.50Nigeria Other parts and accessories of bicycles 31.64 18.22 (–) 42.41 Bicycles 5.34 8.54 59.93 Pedals and crank gear and parts thereof 4.69 3.83 (–) 18.34 Bicycle rims 2.09 2.32 11.00 Other spokes and rims 2.67 1.84 (–) 31.09 Bicycle hubs 2.13 1.60 (–) 24.88 Other hubs and brakings 3.37 1.30 (–) 61.42 Bicycle freewheels 6.43 0.60 (–) 90.67 Bicycle spokes 1.05 0.23 (–) 78.10 Total (incl. others) 61.30 46.41 (–) 24.29Kenya Other parts and accessories of bicycles 18.72 15.75 (–) 15.87 Bicycles 8.68 8.54 (–) 1.61 Bicycle frames, forks and parts thereof 2.28 6.17 170.61 Pedals and crank gear and parts thereof 2.78 3.83 37.77 Bicycle rims 1.56 2.32 48.72 Other spokes and rims 0.85 1.84 116.47 Bicycle hubs 0.58 1.60 175.86 Brakes including coaster braking hubs and hub brakes and parts thereof 0.78 1.31 67.95 Other hubs and brakings 0.85 1.30 52.94 Total (incl. others) 40.55 45.44 12.06Total (all India) 777.20 826.50 6.34

Source: Compiled from the data of DGCI&S, Monthly Statistics of Foreign Trade of India, Volume 1, March 2006 and 2007 issues, Kolkata

er. This rickshaw would be exported free of cost to six African countries: Tanzania, Ghana, Zambia, Ethiopia,

Nigeria and Kenya. Handy cycle. BSA Cycle, one

of the major bicycle manufacturers

in India, recently launched the lat-est model of a bicycle under brand BSA Foldman. The company sources say that it is India’s first ever light-weight folding cycle. It can be folded under three steps and stored any-where under the bed, under the car boot or even under the office table. It is equipped with 6-speed gears and advanced suspension systems. This bicycle is available in motorcycle outlets of Mumbai.

Promotion of bicycles. The Draft National Urban Transport Policy aims at curtailing the use of private transport vehicles and gives impetus to public transport as well as non-motorised vehicles like bicy-cles. A slew of measures have been suggested in the policy to improve the use of public transport. To en-courage the use of non-motorised vehicles like bicycles, the policy sug-gests that sufficient safety measures must be provided. This will help to increase the use of public transport.

Export outlook On the whole, the future of the

Indian bicycle industry seems chal-lenging. Only those companies will survive which successfully restruc-ture and modernise to achieve global competitiveness in terms of quality, cost and distribution system. The Indian bicycle industry needs latest research and development facilities to match with world leaders like Chi-na and Taiwan. For tapping export potential, it needs to pay special at-tention to R&D, designing and mar-keting. For promoting bicycles in the domestic market, there is a strong-felt need to give a special focus on the youth to change their mindset by sensitising them to the concept of cycling. One way of doing it is to cus-tomise the product to the customer’s expectations apart from paying at-tention to the comfort factor.

The author was formerly a research officer at the Indian Institute of Foreign Trade, New Delhi