Bicycle demand growth in India pedalling to decadal high of 20pc

31 May, 2021 12:00 AM printer

Mumbai: India’s bicycle industry is pedalling to a decadal-high demand growth of 20 per cent this fiscal with sales likely to touch 1.45 crore units compared with 1.2 crore units last fiscal, according to Crisil Ratings.

The ongoing COVID-19 pandemic has spurred demand for bicycles owing to improving fitness consciousness and leisure requirements, it said, report agencies.

India is the second largest manufacturer of bicycles in the world. The industry is classified into four segments—standard, premium, kids and exports. Demand for standard bicycles, which is the largest segment (accounting for half of all bicycles sold in 2020) is driven by government purchases.

Government departments procure these bicycles through a tender process and distribute under various welfare schemes.

Demand for premium and kids bicycles (nearly 40 per cent) is driven by fitness and leisure needs.

Exports and sales of other kinds of bicycles constitute the remaining 10 per cent demand.

In the five fiscals through 2019, bicycle sales volume logged a modest compound annual growth rate of 5 per cent. In fiscal 2020, it contracted a massive 22 per cent as government purchases plunged and a large bicycle manufacturer downed shutters.

However, last fiscal saw a turn for the better.

Nitesh Jain, Director at Crisil Ratings, said the pandemic-induced constraints on fitness and leisure options increased the demand for bicycles, especially in the premium and kids segments.

Strong growth in these limited the overall decline in sales volume to just 5 per cent in fiscal 2021 despite a further reduction in government purchases, he said.

“The momentum is likely to continue this fiscal too, given the ongoing second wave of pandemic, and should lead to a 22 per cent growth for the premium and kids segments,” said Jain.