Why would a bicycle manufacturing unit shut down in India with demand growing ? 

The closure of a small manufacturing unit employing 700 employees in the midst of the pandemic did not grab headlines. But the closure points to greater seismic changes ahead

Why would a bicycle manufacturing unit shut down in India with demand growing ? 
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NHS Bureau

The closure of a manufacturing unit in Sahibabad by Atlas Cycles earlier this month, in the middle of the lockdown induced by the pandemic, rendering 700 to 1000 employees came as a surprise to many. But not to those who have studied the history of de-industrialisation in India and the corrosive impact of colonial plunder. Two years ago, Atlas Cycles, a major bicycle manufacturer since 1965, had shut down its Sonepat unit as well.

A generation which grew up with cycles as a useful mode of commuting in everyday life—in rural as well as urban India, an indispensable accessory to people depending on agriculture as well as those in industrial townships and non-industrial towns besides the campus, reacted with shock.

Those who suffered from nostalgia, recalled that in the 1980s .

Hercules Cycles was supposed to be superior to others. Launched in 1951, in India, it had units in Madras, Nasik, Noida. It had many brands, such as Phillip’s (1959), BSA (1964), Montra (2011), and Mach City (2015).

Sen Industries’ Raleigh was launched in 1952, with its unit near Asansol, West Bengal. This was a British company where it was National Congress. By 1913, it had become largest cycle manufacturer and during 1921-35, it also manufactured motorcycles, as Reliant Motors. Hero Cycles was launched in 1956 with its unit in Ludhiana and quickly cornered a large section of the market. Avon was another popular brand.

Moreover, in a developing country like India with the population and the number of the poor growing steadily—along with the curious development of better roads---why would a cycle manufacturing unit close down? Surely, it cannot be due to any lack of demand? The overhead costs of the unit would have been low and the losses could not have been high.

One possible explanation is the cycle manufacturers gearing up for better technology, foreign collaboration, lightweight frames, high-end bikes and automation. If robots can manufacture bicycles, who needs men?

I do not own a car, and my main form of travel to Westminster and in my constituency is by bicycle. I also take my bike on trains to meetings in other parts of the country, which enables me to see other cities…the bike is the perfect marriage of technology and human energy,” said Jeremy Corbyn, the former Labour Party chief and the leader of the opposition in the British House of Commons.

Not all British politicians share his enthusiasm for the bicycle though the contraption has existed for the past 200 years. The first bicycle is said to have been put together in Germany in 1817 but inflatable tires were invented much later in 1887. Bicycles also required roads and surfaces which were smooth enough. It, therefore, took time for bicycles to become popular.

Most of Europe remains bicycle-friendly with bicycle lanes and people allowed to hop in and out of trains and boats with their bicycles. But strangely in poor and crowded India, the bicycle is a luxury of sorts that only the privileged can afford to have. Motorised two-wheelers, scooters and motor cycles, have in the past 50 years overtaken the humble bicycle in India. Last year industry sources put the sale of bicycles in India at 16.5 million while during the same year 21.9 million motorcycles and scooters were sold.

India is the world’s second largest manufacturer of cycles after China and the world’s third largest consumer. Last year, as per industry estimates, bicycle sales in India stood at over 16.5 million units, valued at Rs 5,000-5,500 crore.

Speed and ease of riding, however, outweighed the advantages of the bicycles. Indian roads are also not designed for bicycles and even in smaller cities, bicycle lanes are not available. When Akhilesh Yadav was chief minister of Uttar Pradesh, he ordered bicycle lanes in Lucknow but the initiative was ridiculed and the experiment came to nought.

However, the experiment of giving bicycles to girl students did empower them in Bihar, Jharkhand and in several other states. It reduced the dropout rates and improved attendance of girl students in schools. With more states jumping on the bandwagon and emulating the example, bicycle sales have been growing at a reasonably fast clip. There have been demands in fact in many of the poorer states in eastern India, which have both minerals and alloys required for the frame, to invite bicycle manufacturers to set up units.

Setting up bicycle units, however, require an entire eco-system, a large number of small ancillaries to supply smaller parts and, therefore, the bicycle manufacturing hubs continue to be located in the South, West and Northern parts of the country.

Indian politicians do ride bicycles for photo-ops. A few like Arjun Meghwal have photographed themselves riding to Parliament on their two-wheelers. But the humble bicycle for regular commuting is still used by the poorest. Even this segment finds it difficult to commute in bigger cities, where there are few facilities for parking bicycles and the roads teeming with fast moving buses, trucks and autos are not safe. Nor is theft of even the most modest bicycles entirely unknown.

There was a time when bicycles in India needed to be registered with the local municipality and a token obtained. It needed to be displayed on the bike and there were conditions like a headlight and taillight fulfilled. A modest registration fee, renewable, was charged and fines were imposed if the bicycles were found without a headlight at night. With faster modes of travel, this was given up and no registration is required for bicycles now.

With fancy imported bicycles making their entry into the market, the fitness and bicycling enthusiasts have taken to rides on week-ends, in early morning hours or at night. The bicycles with gears and the advent of electric bicycles have given a fillip to biking in India but concerns remain. Not only are Indian roads and highways notoriously unsafe, poor law and order means that the risk of being robbed of your bicycle along with your wallet is high.

Even then the sale of bicycles in India has been steadily growing. And although the market share of highend bikes is still very small, for reasons of hassle-free commuting, fitness and environmental concerns, or by way of hobby, an increasing number of Indians flaunt these showpieces. Fancy bicycles need to be kept in safe places and often they are left to languish in garages, to be given away eventually.

The growing segment of ‘recreation bikes’, before the COVID-19 put a brake, had in fact made bicycle manufacturers bullish. “The premium bicycle has advanced from being a hobby to a lifestyle accessory. Cycling is more of a social activity than it ever was before and for many members of the millennial generation, the highend bicycle becomes a means to express and exude their identities,” Pankaj Munjal, Chairman and Managing Director of Hero Cycles was quoted as saying weeks before the lockdown. The Indian bicycle market, which until a decade ago was confined to local players like Hero, BSA, Hercules, Avon and Atlas, saw the entry of international players like Trek, Kona, Schwinn, Giant, Fomas (an Indo-Chinese venture), Decathlon, Bianchi, Scott Sports, among others.

The slowdown in the Indian economy curiously had little impact on the industry till the lockdown. While the growth was static in the utility cycle segment, the premium segment— comprising touring, road, mountain, city, hybrid and racing cycles—was growing at a fast clip and metropolitan cities were driving the sales. More than half of the sales in the premium segment came from half a dozen Indian cities.

Niche players like GoZero Mobility, a British electric bike maker, which manufactures premium electric performance bikes, was also getting ready to launch its flagship products. The CEO of GoZero Mobility was quoted by the media as saying, “We believe India will be at the centre of the electric mobility revolution and we wish to contribute towards this. India is a high potential market for us. We aim to start with 3,000 units in 2019 scaling up to 75,000 units by 2023.” The increasing congestion, urbanisation, pollution etc. were factors driving the demand for bikes in the cities.

Punjab accounted for the largest share in manufacturing and produced around 10.5 million units in 2017. Chinese bicycle manufacturers were expected to come in with lightweight technology. Online distribution channels and digital payments also facilitated the sales although offline stores continued to account for 80 percent of the sales.

The bullish sentiment was aided by the global trend for e-bikes.

Which were expected to contribute 50% value share by 2022 to the total bicycle industry. Brands such as Atlas, Hero Cycles, Avon cycles have huge market penetration offering low to medium price bicycles and accounted for around 60% market share in 2017. Goldstein Market Intelligence analyst forecast that the India bicycle industry is set to grow at a CAGR of 8.6% over the forecast period of 2017-2030.

(With inputs by Mohammad Sajjad)

Know your bicycles

Touring bikes are designed for long distances on road. They are tougher with a more relaxed riding position and have mounts for panniers and mudguards.

Road bicycles are lighter and faster and designed to be ridden fast on smooth pavements, have «drop» handlebars, and can be used for on-road racing.

Adventure Road Bikes or any-road bikes have drop handlebars and the ability to use wider tires, suitable for long days in the saddle, light touring, and commuting.

Fitness bikes have lightweight frames and relatively narrow tires with a flat or upright handlebar, designed for people who want a light, high-performance bike.

Mountain bikes are designed for rough off-road trails, have flat or upright handlebars, low gear range and some type of shock absorbers or suspension.

Hybrid bikes have large, padded seats and upright handlebars, provide a comfortable riding position, suitable for casual riding and short-distance commuting .

Cruiser bikes designed for casual riding, have large, comfortable seats, wide “balloon” tires and upright handlebars, are single-speed or 3-speed.

City bikes are amenable to regular clothes, have the upright riding position of a cruiser but the wheel size of a hybrid bike.

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