Bicycles, Viz, Sports By: G.P

Market Survey

new models of bicycles, viz, sports By: G.P. Gandhi and high-tech models, both for domestic and export markets. It has not paid much attention to R&D. However, of late, some leading manufacturers have started devoting more attention to R&D for promot- BICYCLES: can India ing exports. Modern machines and equipment are being installed and even quality control programmes catch up with china? are being instituted. An R&D centre was set up in the 1980s at Ludhiana, which gave a push to the use of im- The Indian bicycle industry needs latest R&D facilities to proved technology. Ludhiana in Punjab is popularly match with world leaders like China and Taiwan. known as the bicycle capital of the country, accounting for as much as 80 per cent of the bicycles and bicycle parts manufactured in India. Kanpur, Mumbai, Sonepat (Hary- ana), Chennai and Kolkata are the other important production centres for manufacture of bicycles and bicycle 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- icycles continue to be the designs, colours and features. Today, ports bicycles and bicycle parts to principal mode of trans- the Indian bicycle manufacturing more than 50 countries all over the port for the low- and and bicycle parts industry is widely world. Atlas bicycles are more pop- middle-income families. recognised for its quality standards ular both in the national and in- This is because the bicy- in the international market. ternational markets. The company Bcle is both environment- and people- Considering the rising fuel costs was the first to get ISO 9001:2000 friendly. and pollution, the bikes are consid- certificate for implementing the India is the largest producer of bi- ered ideal. These can be maintained latest international quality man- cycles next only to China. It produces at low costs. agement system. around 1.25 crore bicycles every year, The Indian bicycle industry over The bicycle industry in India with almost each day witnessing new the years has introduced a variety of comprises two kinds of units: units Market Survey manufacturing bicycle parts, com- More than 90 per cent of the bi- Engineering Export Promotion ponents and accessories and units cycle production in India comes from Council functioning under the aegis manufacturing complete bicycles. four bicycle companies, viz, Hero Bi- of Ministry of Commerce & Industry, While bulk of the parts and com- cycles with a share of around 35 per government of India, over the years ponents are manufactured in the cent followed by Atlas Cycles (24 per has been playing an important role small-scale sector, complete bicycles cent), TI Cycles (18 per cent) and in promoting exports of bicycles and are manufactured in the organised Avon (15 per cent). Hamilton Indus- bicycle parts and components in the sector. Large cycle units are permit- tries, RMI Cycles and Cycle Corpora- international market. ted to manufacture bicycle frames, tion of India are the other important AlI India Cycle Manufacturers chains and rims for their captive bicycle manufacturing companies in Association (AICMA) is the national- consumption. India. level body looking up the interests of the bicycle industry. Table I World Exports of Cycles, Scooters (Motorised or Not) and World trade Invalid Carriages by Major Countries (US$ million) Exports by major countries. Country 2002 2003 2004 2005 2006 Per cent growth in Data on the world trade of bicycles 2006 over 2005 and bicycle parts is not available separately. However, the same has Japan 5,834.4 6,114.4 7,226.1 7,770.8 7,899.5 1.66 been clubbed with product group China 2,902.6 4,183.2 5,171.4 5,940.7 7,240.2 21.87 ‘cycles, scooters, motorised or not, Italy 1,889.2 2,172.1 2,539.2 2,588.2 2,869.7 10.84 and invalid carriages,’ under the USA 1,151.8 1,298.4 1,387.1 1,535.9 1,801.4 17.29 SITC Code 785, published by the Germany 979.2 1,134.9 1,239.5 1,568.5 1,766.6 12.63 United Nations in their publication Yearbook of International Trade Sta- Belgium 848.8 981.9 1,172.4 1,235.0 1,271.9 2.99 tistics. Spain 625.3 785.1 895.4 852.5 999.5 17.24 As may be seen from Table I, France 553.3 762.9 928.1 930.6 993.8 6.79 world’s exports of cycles, scooters, etc Netherlands 606.6 694.9 817.8 855.7 902.4 5.46 in 2006 registered an increase of 8.33 Thailand 368.2 464.1 635.9 776.7 889.9 14.57 per cent over the previous year when World total 21,064.9 24,969.7 29,666.3 32,495.5 35,451.4 8.33 the same reached a level of $35,451.4 million as against $32,495.5 million. Source: United Nations, Yearbook of International Trade Statistics, 2006 Japan over the years continues to be the largest exporting country. How- Table II ever, its exports during the period witnessed a marginal growth of 1.66 World Imports of Cycles, Scooters (Motorised or Not) and per cent. The other major exporting Invalid Carriages by Major Countries countries in 2006 were China, Italy, (US$ million) USA, Germany, Belgium and Spain. Country 2002 2003 2004 2005 2006 Per cent growth in Significant export growth was wit- 2006 over 2005 nessed in the case of China (21.87 USA 4,526.3 4,971.4 5,634.1 6,369.6 6,459.7 1.41 per cent), USA (17.29 per cent), Germany 1,812.9 2,045.5 2,204.5 2,565.5 2,715.7 5.85 Spain (17.24 per cent) and Thailand (14.57 per cent). France 1,338.4 1,840.9 2,195.8 2,551.6 2,298.2 (–) 9.93 Imports by major countries. Italy 1,135.9 1,516.1 1,895.5 1,990.3 2,258.4 13.47 As may be seen from Table II, world Spain 631.4 819.0 1,241.4 1,604.1 1,897.9 18.32 imports of cycles, scooters, etc reg- Japan 1,021.9 1,214.8 1,322.8 1,349.8 1,435.2 6.33 istered an increase of 7.56 per cent Belgium 902.4 1,134.9 1,450.3 1,585.4 1,432.0 (–) 9.68 over the previous year when the UK 1,048.6 1,191.5 1,353.0 1,418.7 1,414.8 (–) 0.27 same shot up to $34,484.4 million as against $32,061.3 million. Netherlands 816.9 896.9 1,010.2 1,018.3 1,092.2 7.26 USA continued to be the larg- Canada 625.1 765.0 769.5 912.6 993.0 8.80 est importing country. In 2006, World total 20,761.4 24.409.9 28,745.6 32,061.3 34,484.4 7.56 it imported cycles, scooters, etc Source: United Nations, Yearbook of International Trade Statistics, 2006 to the tune of $6459.7 million as against $6369.6 million, registering Market Survey

Table III a marginal growth of 1.41 per cent. In 2006, Germany, France, Italy, India’s Exports of Bicycles and Bicycle Parts and Spain, Japan and Belgium emerged Components During 2003-04 to 2006-07 as the major importing countries. (Rs crore) Imports showed an increasing Item 2003-04 2004-05 2005-06 2006-07 Per cent growth in trend in respect of Spain (18.32 per 2006-07 over 2005-06 cent), Italy (13.47 per cent), Canada Bicycles 201.36 168.33 111.68 133.69 19.71 (8.80 per cent), the Netherlands (23.41) (21.08) (14.37) (16.18) (7.26 per cent) and Japan (6.33 per cent). Bicycle parts 658.89 630.15 665.52 692.81 4.10 On the other hand, imports and components (76.59) (78.92) (85.63) (83.82) dropped in the case of France (9.93 Total (all India) 860.25 798.48 777.20 826.50 6.34 per cent), Belgium (9.68 per cent) (100.00) (100.00) (100.00) (100.00) and the UK (0.27 per cent). 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 India’s exports issues, Calcutta Categorywise. As may be seen from Table III, India’s exports of bi-

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 19.71 B. 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 4.10 Grand 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 Market Survey cycles and bicycle parts in 2006-07 2005-06. Exports to Tanzania in the colours. registered a marginal growth of 6.34 year 2006-07 registered a significant Bicycle production in India. per cent over the previous year when growth of 21.50 per cent over the India is the second largest producer the same reached a level of Rs 826.50 previous year. The other countries of bicycles in the world next only to crore as against Rs 777.20 crore. Bi- registering a steep growth comprised China. Hero Cycles based in Ludhi- cycle parts and components contin- Mozambique (46.81 per cent), Mala- ana (Punjab) continues to be the ued to hold a major share—83.82 per wi (14.64 per cent), Nepal (14.64 per world’s largest manufacturer of bi- cent—in the total exports of bicycles cent) and Kenya (12.06 per cent). On cycles. While recently addressing and parts. Complete bicycles, on the the other hand, the countries show- its Vendor Meet at Ludhiana, O.P. other hand, accounted for a share of ing a steep decline comprised Sri Munjal, co-chairman and managing 16.18 per cent in the year, register- Lanka (54.86 per cent), Egypt (35.79 director, Hero Cycles disclosed that a ing a growth of 19.71 per cent over per cent), the UK (24.60 per cent), total of 11 crore bicycles were manu- the previous year. Nigeria (24.29 per cent) and Italy factured around the world in 2000. Detailed data on India’s exports (19.10 per cent). Over 50 per cent of the production of bicycles and major bicycle parts Categorywise and countrywise was done in China, India and SE and components during the period India’s exports of bicycles and ma- Asia. India made one crore bicy- 2003-04 to 2006-07 is shown in jor bicycle parts and components to cles, of which 56 lakh bicycles were Table IV. major markets and select markets in manufactured by Hero Cycles alone. Countrywise. As may be seen the years 2005-06 and 2006-07 are Hero Cycles, he said, accounts for from Table V, in the year 2006-07, shown in Tables VI and VII. about 5 per cent of world’s bicycle Tanzania emerged as the largest production. To achieve its continued market for Indian bicycles and bicy- Recent developments growth plans, Hero Cycles would be cle parts and components, thereby investing substantially in R&D. putting Nigeria in the second rank Battery-operated cycles. Avon Seminar on bicycles. A semi- which happened to be the largest Cycles has launched the first bat- nar on ‘Bicycles and Components— market for Indian bicycles and bicy- tery-operated electric bike called Standardisation’ was held on March cle parts and components in the year ‘e-bike.’ e-bikes are eco-friendly, 22, 2007 at Ludhiana. It was organ- pollution-free and ised by Transport Engineering De- Table V fuel-free. These partment of Bureau of Indian Stand- India’s Exports of Bicycles and Bicycle save money, petrol ards. At the seminar, it was pointed Parts and Components to Major and environment. out that there is need to increase Countries During 2005-06 and 2006-07 The two-wheeler participation in the formulation of (Rs crore) does not require international standards to adopt any licence, regis- them as national standards without Country 2005-06 2006-07 Per cent growth tration, insurance any problem against the backdrop Tanzania 55.22 67.09 21.50 and maintenance. of India being signatory to WTO Nigeria 61.30 46.41 (–) 24.29 e-bike produc- and a large exporter of bicycles and Kenya 40.55 45.44 12.06 es no noise, runs components. The seminar created smooth, is easy to awareness among industry circles Mozambique 27.43 40.27 46.81 operate and con- about the work relating to standards UAE 29.51 34.20 15.89 sumes very little being formulated by BIS both at the Uganda 35.15 31.79 (–) 9.56 energy. It has car- national and international levels. It Italy 33.03 26.72 (–) 19.10 rying capacity of up recommended formulation of Indian Malawi 20.83 23.88 14.64 to 75 kg. e-bike has standards for manufacturing bicy- Nepal 20.39 23.25 14.64 no kickstart, no en- cles and bicycle parts. gine to fire up and Bicycle makers’ concern over Egypt 27.83 17.87 (–) 35.79 no sound at idling rising steel prices. Major bicycle UK 21.46 16.18 (–) 24.60 and is equipped manufacturers raised their concern Sri Lanka 27.25 12.30 (–) 54.86 with disk brakes. It over the rising steel prices at the in- Ivory Coast 12.19 10.88 (–) 10.75 can be started with auguration of the first ever focused Myanmar 15.79 10.55 33.19 the kick of the ac- trade show on the bicycle industry, Total (all India) 777.20 826.50 6.34 celerator. Also, it Indo Bike Expo 2004, at New Delhi, is very easy to re- and urged the government to take Source: Compiled from the data of Directorate General of Commercial Intel- charge the battery. effective measures to safeguard the ligence & Statistics, Monthly Statistics of Foreign Trade of India, Volume I- Exports including Re-exports, March 2006 and 2007 issues, Calcutta The bike is avail- interests of the industry. The indus- able in assorted try is facing stiff competition from Market Survey cheap products being imported from search and Development Centre for United Nation Development Pro- China. Bicycle and Sewing Machine, a Pun- gramme (UNDP), recently developed Solar-powered rickshaw. Re- jab Government concern assisted by a rickshaw that harnesses solar pow-

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 Item/country 2005-06 2006-07 Per cent growth Bicycles Argentina — 2.64 — Mozambique 16.11 28.15 74.74 Ukraine 1.41 2.61 85.11 Nepal 6.90 11.39 65.07 Mexico 1.39 2.18 56.83 Tanzania 2.72 10.05 269.49 Kenya 0.58 1.59 174.14 Congo P. Rep. 21.46 9.54 (–) 55.55 Malawi 0.57 1.25 119.30 UAE 7.60 9.39 23.55 Egypt 0.55 1.22 121.82 Kenya 8.68 8.54 (–) 1.61 Myanmar 0.22 1.04 372.73 Angola 4.42 5.48 23.98 Total (incl. others) 28.71 54.92 91.29 UK 4.48 4.72 5.36 Bicycle frames, forks and parts thereof Malawi 4.62 4.70 1.73 Tanzania 3.32 11.53 247.29 Uganda 2.14 4.(-) 87.85 Kenya 2,28 6.17 170.61 Germany 6.59 3.24 50.83 Ghana 0.15 3.61 2306.67 Ghana 1.84 3.13 70.11 Egypt 0.47 2.32 393.62 Nigeria 5.34 0.50 (–) 90.64 Togo 0.36 2.16 500.00 Total (incl. others) 107.14 128.68 20.10 Uganda 1.06 2.16 103.77 Other parts and accessories of bicycles France 0.51 2.14 319.61 Tanzania 22.45 23.38 4.14 Ivory Coast 0.71 1.75 146.48 Nigeria 31.64 18.22 (–) 42.41 Italy 0.71 1.24 74.65 UAE 11.50 16.27 41.48 UAE 0.79 1.10 39.24 Kenya 18.72 15.76 (–) 15.81 Argentina 0.52 1.05 101.92 Uganda 18.39 14.85 (–) 19.25 Total (incl. others) 20.78 51.46 147.64 Egypt 13.15 8.52 (–) 35.21 Pedals and crank gear and parts thereof Sudan 5.11 8.21 60.67 Tanzania 4.33 5.35 23.66 Ghana 3.79 6.30 66.23 Kenya 2.78 3.83 37.77 Myanmar 7.37 4.84 (–) 34.33 Nigeria 4.69 3.72 (–) 20.68 Sri Lanka 8.59 4.37 (–) 49.13 Togo 0.27 3.36 1144.44 Congo P. Rep. 11.13 4.34 (–) 61.01 Ghana 0.79 2.83 258.23 Nepal 6.14 4.19 (–) 31.76 Sudan — 2.83 — Argentina 7.90 4.17 (–) 47.22 Malawi 0.90 1.83 103.33 Burkina Faso 8.92 2.26 (–) 74.66 Italy 3.98 1.70 (–) 57.29 Ivory Coast 6.08 1.64 (–) 73.03 Uganda 1.90 1.57 (–) 17.37 Bangladesh 7.36 0.95 (–) 87.09 Egypt 3.30 1.55 (–) 53.03 Total (incl. others) 288.42 226.24 (–) 21.56 Sri Lanka 1.74 0.52 (–) 70.11 Bicycle hubs France 1.94 0.28 (–) 85.57 Italy 2.98 10.78 261.75 Total (incl. others) 47.07 42.09 (–) 10.58 Tanzania 3.07 3.69 20.20 Indonesia 3.28 2.87 (–) 12.50 Total (all India) 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 2006 and 2007 issues, Calcutta Market Survey er. This rickshaw would be exported Nigeria and Kenya. in India, recently launched the lat- free of cost to six African countries: Handy cycle. BSA Cycle, one est model of a bicycle under brand Tanzania, Ghana, Zambia, Ethiopia, of the major bicycle manufacturers BSA Foldman. The company sources say that it is India’s first ever light- weight folding cycle. It can be folded Table VII under three steps and stored any- India’s Exports of Bicycles and Bicycle Parts where under the bed, under the car and Components to Important Countries boot or even under the office table. During 2005-06 and 2006-07 It is equipped with 6-speed gears and (Rs crore) advanced suspension systems. This Item 2005-06 2006-07 Per cent growth bicycle is available in motorcycle outlets of Mumbai. Tanzania Promotion of bicycles. The Other parts and accessories of bicycles 22.45 23.38 4.14 Draft National Urban Transport Bicycle frames, forks and parts thereof 3.32 11.53 247.29 Policy aims at curtailing the use of Bicycles 2.72 10.05 269.49 private transport vehicles and gives Pedals and crank gear and parts thereof 4.33 5.35 23.56 impetus to public transport as well Bicycle freewheels 4.05 3.69 (–) 8.89 as non-motorised vehicles like bicycles. A slew of measures have been Bicycle hubs 3.04 3.69 21.38 suggested in the policy to improve Other spokes and rims 3.15 2.91 (–) 7.62 the use of public transport. To en- Other hubs and brakings 4.40 1.68 (–) 61.82 courage the use of non-motorised Bicycle chains 1.12 1.10 (–) 1.79 vehicles like bicycles, the policy sug- Bicycle spokes 2.16 0.40 (–) 81.48 gests that sufficient safety measures Total (incl. others) 55.22 67.09 21.50 must be provided. This will help to increase the use of public transport. Nigeria Other parts and accessories of bicycles 31.64 18.22 (–) 42.41 Bicycles 5.34 8.54 59.93 Export outlook Pedals and crank gear and parts thereof 4.69 3.83 (–) 18.34 On the whole, the future of the Bicycle rims 2.09 2.32 11.00 Indian bicycle industry seems chal- Other spokes and rims 2.67 1.84 (–) 31.09 lenging. Only those companies will survive which successfully restruc- Bicycle hubs 2.13 1.60 (–) 24.88 ture and modernise to achieve global Other hubs and brakings 3.37 1.30 (–) 61.42 competitiveness in terms of quality, Bicycle freewheels 6.43 0.60 (–) 90.67 cost and distribution system. The Bicycle spokes 1.05 0.23 (–) 78.10 Indian bicycle industry needs latest Total (incl. others) 61.30 46.41 (–) 24.29 research and development facilities Kenya to match with world leaders like Chi- na and Taiwan. For tapping export Other parts and accessories of bicycles 18.72 15.75 (–) 15.87 potential, it needs to pay special at- Bicycles 8.68 8.54 (–) 1.61 tention to R&D, designing and mar- Bicycle frames, forks and parts thereof 2.28 6.17 170.61 keting. For promoting bicycles in the Pedals and crank gear and parts thereof 2.78 3.83 37.77 domestic market, there is a strong- Bicycle rims 1.56 2.32 48.72 felt need to give a special focus on Other spokes and rims 0.85 1.84 116.47 the youth to change their mindset by sensitising them to the concept of Bicycle hubs 0.58 1.60 175.86 cycling. One way of doing it is to cus- Brakes including coaster braking hubs tomise the product to the customer’s and hub brakes and parts thereof 0.78 1.31 67.95 expectations apart from paying at- Other hubs and brakings 0.85 1.30 52.94 tention to the comfort factor. Total (incl. others) 40.55 45.44 12.06  Total (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 The author was formerly a research 2006 and 2007 issues, Kolkata officer at the Indian Institute of Foreign Trade, New Delhi