Automobile Two-wheeler Segment
Overview
One of the biggest markets in the Indian automobile industry is the two-wheeler market. It represented 23% of India's overall vehicle market in 2021. By 2026, the market is projected to have increased by 8% CAGR to 25 million units.
Motorcycles, which account for more than 80% of the market, dominate the two-wheeler category. The next-largest category is scooters, then mopeds.
The two-wheeler market is fueled by a variety of reasons, including increased disposable incomes, urbanisation and population growth. The government's emphasis on encouraging electric vehicles is also helping this sector.
Hero MotoCorp, Bajaj Auto, Honda Motorcycle and Scooter India, TVS Motor Company, and Yamaha Motor are the leading participants in the two-wheeler market in India.
Key Facts
- India will be the largest two-wheeler market in the world in 2021, with a market size of 21 million units.
- Motorcycles: With a market share of more than 80%, motorcycles dominate the two-wheeler sector.
- Scooters: With a market share of around 15%, scooters are the second-largest sector.
- Mopeds: The remaining 5% of the market is made up of mopeds.
- India is a significant two-wheeler exporter, with over 2 million units exported in 2021.
- Electric two-wheelers: The market for electric two-wheelers is expected to sell over 1 million units by 2021.
Key Trends
Electric two-wheelers are becoming more and more well-liked as a result of the government's emphasis on promoting electric automobiles.
The rising interest in high-end two-wheelers The demand for high-end two-wheelers is driven by customers' rising disposable incomes.
Increased Internet sales Two-wheeler sales online are expanding quickly as customers search for convenience and better prices more and more.
Opportunities
Population growth: India's young and expanding population is a key factor driving the two-wheeler market.
Growing urbanisation: As two-wheelers are a practical form of transportation in cities, India's growing urbanisation is driving up demand for them.
Rising disposable incomes: Consumers' rising disposable incomes are driving up demand for high-end two-wheelers.
Focus on electric cars by the government: The two-wheeler market is seeing new growth potential as a result of the government's focus on promoting electric vehicles.
Growth of online sales: As customers strive for convenience and better bargains more and more, the two-wheeler market is finding new prospects thanks to the growth of online sales.
Challenges
Competition: There are a lot of significant participants in the two-wheeler market, making it very competitive.
Government rules are becoming stronger, which can be difficult for producers in the two-wheeler market.
Technology: As the two-wheeler market continues to develop, producers must keep up with the most recent developments to be competitive.
Insurance: For some consumers, the high cost of insurance might be difficult.
Analysis:
|
Year |
Revenue (in INR billions) |
Revenue growth (%) |
Operating profit (in INR billions) |
|
|
2020 |
172.2 |
-10.1 |
18.6 |
|
|
2021 |
184.7 |
7.2 |
22.5 |
|
|
2022 |
195.8 |
5.2 |
24.8 |
|
|
2023 (Estimated) |
207.4 |
6.3 |
27.2 |
Revenue Growth: The percentage change in revenue from one year to the next is referred to as revenue growth. It shows how well the sector is doing and whether or not revenue is rising or falling. Over the past three years, the two-wheeler market in India has consistently shown strong revenue growth. Although the growth rates have slowed down over time, they are still within a healthy range, suggesting sustained performance.
Operating Profit: The revenue generated by a company's primary activities is known as operating profit. It offers information on how effectively the business is controlling its operational and manufacturing expenses. The operational profit margin has been rising over time, which shows that the two-wheeler industry is getting better at controlling expenses and making more money from its core businesses.
Long-term view:
Over the past three years, the two-wheeler market in India has seen increased operating profit margins and favourable revenue growth overall. These patterns point to a thriving and expanding sector. By 2026, 25 million two-wheelers are anticipated to be sold in India, growing at a CAGR of 8%. Numerous reasons, such as increased disposable incomes, urbanisation, and population growth, are fuelling the segment's expansion. The government's emphasis on supporting electric vehicles is also giving the market new options.
Analyst - Roshan Patel
info@smartinvestment.in
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