Under seige
Two-wheeler makers in denial mode?
The Tatas' Rs 1 lakh car has sent out disturbing signals for the two-wheeler industry. A recent survey carried out by the Associated Chambers of Commerce and Industry of India in metros and semi-urban areas has found that nearly 90 per cent of consumers are waiting for the low-budget car. This may take away nearly 25 per cent of the two-wheeler market. Sales have already shrunk this year compared to the last.
The two-wheeler industry is, however, in denial mode. Brijmohan Lall Munjal, founder director and chairman, Hero Group, feels "low-cost cars are unlikely to make any impact on the two-wheeler market as the two markets are distinct. Two-wheeler customers rely on two-wheelers due to low operational and maintenance cost and other advantages'.
Operational costs are, indeed, a big concern. But those who own high-end two-wheelers for aspirational reasons can migrate to compact or bigger cars.But a shift from low-end bikes to low-cost cars will be influenced by running costs.
Venu Srinivasan, chairman and managing director, TVS Motors, thinks "two-wheelers and low-cost small cars will go hand in hand