Two-wheeler capacities may touch 15 m next fiscal

Two-wheeler plant capacities across India are projected to be close to 15 million units in 2011-12, as manufacturers plan to go flat out in a buoyant market. This would translate into a 25 per cent jump from this fiscal, which is expected to close at a little over 12 million units.

Despite this impressive number, India is still behind China whose annual output of two-wheelers is in the range of 20 million units, but sources say that it is only a matter of time before the leadership equations change. “China is rapidly moving towards cars and bikes will see a gradual decline in the process. On the other hand, demand in India is literally growing by the day,” they add.

Hero Honda, Bajaj

In 2011-12, market leader, Hero Honda is expected to finalise the location of its fourth plant which means its overall capacity could end up being over 5.5 million units. Its closest rival, Bajaj Auto, has planned around 4.5 million units for its three plants, with three-wheelers taking up the balance 500,000 units.

TVS Motor Company and Honda Motorcycle & Scooter India could have around 4.5 million units between themselves. Other players like Mahindra, Suzuki and Yamaha are also planning to increase capacities though their combined numbers would be well under a million units.

While motorcycles continue to dominate the landscape, gearless scooters have been doing brisk business, too. The wave started in the mid-1980s with Kinetic Honda but since then, HMSI and TVS Motor have been the clear frontrunners in this product category. The Activa continues to be the market leader, while the recently introduced TVS Wego has caught the fancy of customers. M&M's scooters, likewise, have been averaging reasonable numbers each month.

Gearless scooters

Gearless scooters are the best option in chaotic traffic conditions and have ceased to be a gender-specific option as was the case decades ago when they first hit the roads. There is no question, though, that women have emerged a critical buyer base, which explains why top celebrities from Bollywood (Priyanka Chopra, Preity Zinta and Kareena Kapoor) endorse scooters from the stables of Hero Honda, TVS and M&M.
Relatively poor public transport in most Tier-2 and-3 centres has also prompted working women to go in for gearless scooters. The fact that cities are paying more attention to building better roads has helped improve connectivity and fuelled demand in the process.

In motorcycles, the executive commuter segment (Rs 40,000-45,000) continues to be the top seller, with monthly sales closer to the 4.5 lakh mark. The top brands here include the Splendor, Discover and Passion. Manufacturers believe that the near future could see more customers gravitating towards higher-end bikes such as the Pulsar, Unicorn and Apache which are priced upwards of Rs 60,000.
This possibly explains why companies like HMSI are bringing in bikes like the CBR 250cc which will retail at less than Rs 1.5 lakh and endeavour to build a new customer base. “India is the youngest market in the world for bikes and these buyers with higher aspiration levels are willing to spend more money,” an industry official said.