Hubris Must Not Set In: We Still Have a Long Way To Go in the Motorcycle Industry
Several friends and colleagues have forwarded me an article by Srinivas Kantheti, in CNBCTV18 titled “How one Indian industry beat China at manufacturing and creating a global footprint". It is an excellent piece that explains how India’s two-wheeler industry has 'overtaken' that of China, and why a combination of government, people and corporates made it happen. I agree and subscribe to most of what Kantheti writes; yet, there are some facts, figures and realities which need clarification.  
 
In 2019-20, India made more than 21 million two-wheelers (including electric ones) and a tad over 1.13 million three wheelers (including electric). These figures are from the Society of Indian Automobile Manufacturers (SIAM). China manufactured a little over 17.36 million two-and three-wheelers (15.43 two-wheelers, 1.93 million three-wheeled vehicles) during the calendar year 2019, as per data from the Chinese Ministry of Industry and Information Technology (MIIT). These figures indicate that India has overtaken China.
 
There is another, more important figure though, that needs looking at: China produced 27.07 million electric two-wheelers in 2019! Though these figures include pedal-assisted electric bicycles (with max speed of up to 20 km/hr), most are light electric scooters and 'scooterettes', as well as higher performance motorcycles. 
 
 
With the ban on use of fossil-fuel-powered two-wheelers in most major cities of China, commuters have been forced to switch to cleaner, electric-powered vehicles. Thus, as China has moved to cleaner two-wheelers, India is leading the charge of the unclean ones. The reality is that India remains far behind China, when it comes to the overall count.
 
 
The situation is similar with regard to exports too. Whilst India exported a little over four million two- and three-wheelers during 2019-20 (of which 3.5 million were two-wheeled), China sold over 7.125million units (worth US $4.8 billion) in international markets during 2019 (a figure, which has seen steady decline since 2013, when around 10 million were exported). 
 
 
To these figures, we need to add the export of electric two-wheelers. In 2018, China exported 1.877 million e-bikes, with a total export volume of US $790 million (about 5.23 billion yuan), up 14.6% year-on-year (y-o-y). In 2019, China exported more than 14 million e-bikes of which 3.4 million were to Europe alone–valued at US $ 2.89 Billion! 
 
   
 
Even more importantly though, China exports a massive number of components – in 2013, China exported more than 26 million two-wheeler engines worldwide! 
 
Unfortunately, many of them made their way to India. The numbers though have been coming down, yet India, sadly, imports a significant number of components from China. 
 
 
In fact, most of India’s electric two- and three-wheeler industry is China-based, with most of the start-ups making and selling essentially China-sourced vehicles, which have been superficially 're-clothed'. 
 
Whereas, China buys almost nothing from India.
 
Historically, the Indian governments, sometimes through good planning, sometimes thanks to exigencies, have managed to provide enough protection to the budding Indian two-wheeler industry. All this happened over time, and then there was the right dose of competition to make the Indian motorcycle industry a 'world class' act. 
 
No doubt, credit should also go to the India’s bike industry, its captains, engineers and designers for being both, progressive and aggressive. This is why Europe’s two leading motorcycle manufacturers, KTM and BMW, have partnered with Indian giants Bajaj and TVS, with Bajaj now controlling 49% of KTM. This is also why English motorcycle magazines are happy that venerable British bike brands, BSA and Norton are in the hands of Indian giants, Mahindra and TVS. (China too has been on a buying spree, having acquired famous Italian marques Benelli, Moto Morini and several others).  
 
 
Yet, before we go around patting our collective backs, we must realise that the future is electric and not fossil-fuelled and that the current Indian government’s moves on this front has opened an extremely wide door to the Chinese. 
 
 
The government’s policy on automotive electrification has created a situation where a fully indigenous effort does not have the slightest chance of making it in the Indian marketplace, let alone international. 
 
Thus, before hubris sets in, it is time the government sat with industry and worked out a mutually beneficial strategic plan, if we really want to become the world’s largest manufacturer of (all) powered two-wheelers.     
 
(Author of several automotive books, founder editor of many leading auto mags, Gautam Sen has also consulted with most of the Indian auto majors. He has also worked with several leading car designers such as Gérard Godfroy, Tom Tjaarda and Marcello Gandini, among others)
 
  • Like this story? Get our top stories by email.

    User 

    COMMENTS

    prime

    8 months ago

    Well-written. Electric is the only future. We cannot depend only on the old manufacturers to get us there - they have too much to lose and will continue to protect their existing cash cows. Policy must be set to aggressively help the newcomers to rise. The next three years are the years of automotive industry disruption. We can either sink or swim.

    m.prabhu.shankar

    8 months ago

    Superb

    rajoluramam

    8 months ago

    Though we are far behind China in manufacturing 2 and 3 wheelers industry, it is not a bad show if one remembers our old " vespa, bajaj, Lambretta, Ambassador and Fiat cars". People waiting for years together to purchase lamretta, the great vespa. It is mind boggling about the premium people were paying to purchase vespa scooter and Bajaj scooter. It was a tamasha going on to purchase these vehicles through foreign exchange
    The improvement in production, quality, improving the models etc is commendable in a short period.
    Let us not compare with China and dishearten ourselves.

    mahesh.kalkar

    8 months ago

    Great article. As long as our bureaucracy is not reformed with accountability to its functioning, we will remain where we are. That's it. I have a copy of MoD's letter dated 5.6.20, not related to this subject. But it exemplifies bureaucratic mentality. How can it say "No" to Good Morning! Period.

    kvrao42004

    8 months ago

    An excellent piece. Never knew the mass of data. A wake up call for our auto giants coming from an expert in Gautam Sen.

    Ramesh Popat

    8 months ago

    tortoise will overtake rabbit in the years to come, hopefully.

    kiranshah254

    8 months ago

    One more Excellent article from Gautam Sen. A lot of awakening of Indian souls is necessary.

    We are listening!

    Solve the equation and enter in the Captcha field.
      Loading...
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email

    BUY NOW

    online financial advisory
    Pathbreakers
    Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
    online financia advisory
    The Scam
    28 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
    financial magazines online
    Stockletters in 4 Flavours
    Outstanding research that beats mutual funds year after year
    financial magazines in india
    MAS: Complete Online Financial Advisory
    (Includes Moneylife Online Magazine)