May 17, 2022 7:01:08 am
With its price shooting up by almost 50 per cent in the last two years, the sales of the sturdy Roadster, popularly called the poor man’s cycle, have fallen by almost 39 per cent, sending shock waves across cycle manufacturers in Ludhiana.
The black entry-level cycle was priced around Rs 3500 in March 2020 before the first lockdown. Two years on, its price ranges between Rs 5,000 and 5,500, depending upon different brands and inclusive of accessories like carrier and stand.
The latest price rise of Rs 100 took place last month. “This hike is governed by the prices of steel which are on the rise. What can we do,” says Gurmeet Singh Kular, president of Federation of Industrial and Commercial Organisation (FICO).
“Steel is a major component in bicycle manufacturing and prices of cold rolled pipes have doubled from Rs 50-55 a kg in March 2020 to Rs 95-100 a kg now. Similarly, the CR sheets, which were priced around Rs 42 a kg in March 2020, are now at Rs 80-85 a kg. We need it in bicycle manufacturing, so we have no choice but to pass on the increased cost of production to the consumer,” says Upkar Singh, president of Chamber of Industrial and Commercial Undertakings.
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Going by the figures of All India Bicycle Manufacturing Association (AICMA), the sale of Roadsters dropped from 64,76,385 in 2019-20 to 48,42649 the next year and further to 46,33,541 in 2021-22, signalling a drop of drop of 39.77 per cent.
“The steel manufacturing is being done by a handful of large units in the country and they have created a cartel due to which they increase prices overnight. We have highlighted this matter to Finance Minister Nirmal Sitharaman, and asked for regulation of prices of steel but nothing has happened till now,” says Upkar Singh.
Last November, members of United Cycles Parts and Manufacturing Association (UCPMA) had even sat on a month-long dharna to seek regulation of steel prices.
“Before the 2020 lockdown, there used to be institutional sales of bicycles as well with state governments distributing them free to students (largely girl students) as part of social security schemes. Since schools remained closed for most of 2020 and 2021, these orders stopped. Only the West Bengal government had placed a small order last year. We hope such orders will resume this financial year,” said SK Rai, MD of Hero Cycles.
Interestingly, fancy bikes whose starting price ranges around Rs 7,000 and goes up to lakhs witnessed a slight hike in sales during the pandemic but now this number too has fallen .”We sold 36,55, 389 bicycles in this segment in 2019-20 , which increased to 41,22, 337 in 2020-21 but in 2021-22, it fell to 40,54,174 ,” said Dr KB Thakur , secretary general of AICMA.
Rajesh Bansal, owner of Rana cycles, said most people largely buy cycles in the range of Rs 10,000-20,000 and only a handful go for expensive fancy bikes. “This segment uses imported bicycle parts. With inflation hitting everyone, we are also feeling the squeeze in sales,” added Bansal, who feels customers are waiting for prices to come down as their salaries have not increased but inflation is hitting the roof.
Bansal summed up the sentiments of this sector when he said, “We want steel prices, rubber prices etc to stabilize as our sales have been hit badly.”
Export is the only segment which is seeing growth. The sales in this segment have gone up from 782, 454 in 2019-20 to 9,71,049 in 2021-22, a jump of 24.1 per cent.
Manufacturers attribute it to rise in the cost of manufacturing bicycles in China due to the surge in their labour cost after Covid. “So a number of companies grabbed those orders. However, I would not call it a very encouraging response. It was lukewarm. Overall the bicycle industry needs an overhaul,” said Rai.
Upkar Singh added, “The purchasing capacity of consumers has been hit due to inflation. The school fee has increased, cost of books is increasing every year, clothes are getting costly, grocery, fuel… the prices have increased but the income of most people is stagnant. Hence, we have to suffer.”
Sewak, who works in a factory at Dugri, rues that the Roadster is no longer affordable to the poor. “When you have barely enough to feed your family, how can you think of sparing Rs 2000 more for a cycle?”
E-bikes, which caught the fancy of many due to the hike in price of fuel, are also yet to catch on. Only 1,306 such bikes were sold in 2021-22 and AICMA has not recorded any sale in the previous two years.
In sum, the cycle sales are falling across segments. They have gone down from 12816733 bicycles in 2019-20 to 1,14,37826 in 2021-22, a dip of 12.05 per cent.
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