Auto Sector India - 2 Wheelers

Topics: Automobile, Internal combustion engine, Motorcycle Pages: 3 (263 words) Published: February 21, 2013
Auto Sector India (Two Wheelers)
Summary for Microeconomics Project

Submitted by:-
Section A Group 8
Sarabjot Singh 12P043
Saurabh Mishra 12P044
Vineet Gupta 12P045
Sheth Swapnil Jayant 12P046
Shrey Tandon 12P047
Shrimoy Tripathy 12P048

Automobiles are categorized as luxury goods in India and the auto sector can be said to be cyclical. Thus, the auto sector, in a way, represents the economic condition of the country. Auto sector is divided into following segments:

a. Passenger Cars
b. Commercial Vehicles
c. 2 Wheelers
d. 3 Wheelers

Out of this 2-wheelers form 76% of the total market share by volume.

Factors Affecting Demand:

1. Household income
2. Petrol Price
3. Monsoons (Affects Rural income, food inflation)
4. Decreasing prices in 4-wheeler market
5. Infrastructure, Public Transport

Factors Affecting Supply:

1. Cost and availability of raw materials
2. Increased no. of players in the industry
3. Capital sourcing
4. Promotion, Distribution and Penetration

Two-wheeler business poised for long-term CAGR of 13%, because of rising incomes, demographics, rural demand, tendency to have more than one 2W per household and export potential.

Current Risks for the market:

1. Poor Monsoons
2. Price Wars
3. Inflation
4. Fuel Prices
5. Global Downturn

Market Segments

 Motorcycle: Wheel Size Greater than 12”
 Scooters: Wheel Size Less than 12”
 Mopeds: Fixed transmission and Engine capacity < 75cc

Industry volume over the years

Major Players

Hero MotorCorp
Bajaj Auto
Honda Motorcycles and Scooters India

IDFC Auto report

References: IDFC Auto report
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