Auto Sector India - 2 Wheelers

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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

Overview:
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
TVS
Honda Motorcycles and Scooters India
Suzuki
Yamaha
Mahindra

References:
IDFC Auto report
http://profit.ndtv.com/News/Article/5-facts-about-india-s-growing-two-wheeler-market-305607
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