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Buy cycle: Cos turn to kids for growth spin

Buy cycle: Cos turn to kids for growth spin

Author | Source: The Economic Times | Tuesday, Aug 09,2005 8:10 AM

Buy cycle: Cos turn to kids for growth spin

The Indian bicycle industry is looking at kids and health freaks to bail it out of its mounting problems. 'Serious degrowth' in the regular 'black' roadster segment has led to a mad scramble and marketing focus on the 'speciality' areas with the mountain bikes and the kids bicycles coming out as the best sellers.

Players, both big and small are reworking their strategies to focus on the segment that is actually giving them the much-needed growth. From the big four of the Indian bicycle mart -Hero, Atlas TI Cycles and Avon- to the smaller, local brands are concentrating on production, marketing and exports of bicycles to the younger ones.

Almost 20% of the pedal bikes production is already dedicated to the non-adults or people below 18 years of age say industry sources. “A substantial part, say between 30% to 35%, of our production is for the speciality segment now,” says SK Rai, president, Hero Cycles, confirming the slide in the volumes.

The market has shrunk drastically in the last five years; the production is down from 12 crore units per year in '01 to 90 lakh bicycles in the current year. Regular manufacturing troubles like labour unrest, escalating steel prices and competition from China has also taken its toll. But the recent revival in certain segments has given the industry some hope.

Smaller brands with lower volumes, which had completely closed down their cycle parts production lines for roadsters, are trying to adapt their existing facilities to manufacture parts for kid's cycles. “Now we are thinking of branching out into children cycles,” says one of the Ludhiana-based cycle part makers, who has not marketed a single cycle for the past three years of the slump.

The revival of the famous cycle brand 'Tobu' has renewed interest in the segment again. “We will be launching one new bicycle model for kids every three months. It is then copied by the biggies in the trade,” jokes Satish Dhanda, a Ludhiana-based owner of brand 'Kavin'. He says that only kid's bicycles would be manufactured under this brand name from now on.

His firm has been exporting cycle and cycle parts to Europe for the past decade and has started importing moulded parts from Taiwan and China for smaller cycles. “We are getting out of manufacturing of other cycles and would be focusing only on trading and manufacturing of kids cycles,” he adds.

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