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Boom Time for Indian Bike Industry

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NEW DELHI, India – It’s boom time in Indias bike industry. Not only because of the Indian rupee dropping to an all-time low level against the US dollar which will attract more sourcing, but also because of the government ordering 1.5 million bikes to be handed out to school-going children. The country’s government has emerged as the biggest

Boom Time for Indian Bike Industry

NEW DELHI, India – It’s boom time in India’s bike industry. Not only because of the Indian rupee dropping to an all-time low level against the US dollar which will attract more sourcing, but also because of the government ordering 1.5 million bikes to be handed out to school-going children.

The country’s government has emerged as the biggest consumer of bicycles manufactured in the country. India has more than two dozen states, most of which are inviting annual tenders for the supply of bicycles, mainly from the big four makers: Hero Cycles, TI Cycles, Avon Cycles and Atlas Cycles.

Capacities fully utilized

These tenders have revitalized the whole industry: even second tier suppliers and smaller vendors supplying the big four are flush with orders. These orders have also helped manufacturers to utilize their installed capacity. “The capacities have been utilized fully from the time the government have started procuring bicycles from bicycle manufacturers,” said Mr Gautam Kapur, Managing Director, Atlas Cycles (Sahibabad) Ltd. Atlas is among the major beneficiaries of the bicycles ordered by various state governments.

It’s estimated that over 1.5 million bicycles are being ordered by state governments to fulfil their annual commitments under the various schemes. “Of late, the government has surfaced as a large buyer in India. Various state governments have started Child Education Development Schemes, whereby the cycles are distributed to school-going children.

About 1.4 million bicycles were purchased by various governments last year. Hero Cycles Ltd. has supplied 600,000 units in the last fiscal year, and it has already supplied 160,000 this year with another order of 200,000 units yet to finalized.

Child Education Development Schemes

The schemes are being funded by international agencies. “Aid comes from the World Bank which supports schemes like promoting education among the female children. If a girl travels to 10 miles to school, the child becomes entitled to a bicycle under the Child Education Development Schemes,” said Gautam Kapur. 

Ludhiana based Avon Cycles has already supplied 200,000 units and another 200,000 are expected to be delivered. “Bicycles are being procured in sizes of 50 cms (20") and 55 cms (22") under the Sarva Shikha Ahiyan (Education Scheme),” stated Mr Onkar Singh, Managing Director, Avon Cycles Ltd.

Chennai-based TI Cycles is likely to supply 280,000 units this fiscal year. It has already supplied about 1.2 million bicycles. “We are expecting further orders of 150,000 bicycles from Karnataka,” said Nambier.

Atlas is supplying around 50,000 bicycles each to the states of Tamil Nadu & Jharkhand annually. Tamil Nadu procured 130,000 units from Atlas this year and Bihar has ordered 200,000 bicycles. “We have supplied bicycles to our dealers in Bihar and Senior Secondary school students get vouchers from the state governments to buy bicycles from dealerships,” said Gautam Kapur of Atlas Cycles.

Originally, the scheme was confined to girl students only, but it has now been extended to boys as well. There is another order to the tune of 150,000 units from Andhra Pradesh. Even smaller bicycle manufacturers like Arpan Cycles are also among the beneficiaries of bicycle tenders. Indian component manufacturers are also benefiting from the governments tenders.

 

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