Public transportation in satellite towns or the lack of it is driving three wheeler sales in the country.In October 2012,a record 85,814 units of three wheelers were produced in India,economic think tank CMIEs data revealed.
At 85,814 units,three wheeler production witnessed a 10.80% year-on-year increase and a 7.9% increase month-onmonth.For the fiscal 2012-13,(April to October) 4.62 lakh three wheelers were produced,as against 5.18 lakh units during the whole of 2011-12.
With rapid population growth in satellite townships like Gurgaon,Noida,Navi Mumbai,Whitefield and OMR in Chennai,there is absolutely no proper urban transportation system in place in these areas.Therefore the reliance is very heavy on two and three wheelers.This is why we believe the Tata Ace segment (for passenger movement) and three wheelers will do well.Besides,there is a very heavy reliance on smaller vehicles to reach the last mile in the goods transportation segment,which is why there is so much activity in that space, stated Kumar Kandaswami,senior director and country leader-Manufacturing,for Deloitte in India.
Three wheeler sales in cities are a very difficult segment to forecast as it is a heavily controlled segment.
The permit system which is followed across the country makes it difficult to forecast.Trending that segment isnt easy as states suddenly open permits for a few thousand vehicles and shut them.Having said that,three wheelers as a segment are witnessing decent growth, an official at TVS Motor said.TVS three-wheeler sales grew 9% to 4,062 units in October followed with a sale of 5,054 units in November,an 87% increase YoY.While Bajaj Auto recorded a 7% increase in three wheeler sales at 45,566 units.
If you travel out of any big city,the connectivity is only through these three wheelers or shared rickshaws.This is a segment which is growing because of lack of public transportation system,and will continue to grow as public systems will take at least another 10 years to develop, said Abdul Majeed,partner and national automotive leader at PwC.In addition,a key driver for demand is the high fuel prices and low rural income due to poor rains.Whenever people get in to conserving cash,they jump into a shared rickshaw.It is a lot cheaper than your own mode of transport.The third main driver is the role of a three wheeled vehicle as an ultra small commercial vehicle, he added.
