NEW DELHI: The humble bicycle, the affordable personal mode of transport for the poor, will be hit by the pinching inflation as higher input costs have prompted cycle manufacturers to increase prices, which will affect the low-income group of the society.
Higher prices of steel and rubber have forced the companies to go in for a price revision, even as they fear that this would adversely hit customers who normally have average daily earnings of about Rs 100-150. Companies like Hero Cycles and Atlas have said they would be increasing prices from February, though this would be spread over two months to provide a cushion to highly pricesensitive buyers.
“Yes, prices will have to be increased as input materials have become dearer. Steel and rubber, two crucial elements, have become expensive along with other commodities like nickel and zinc,” SK Rai, managing director of Hero Cycles (that controls almost 40% of the Indian cycle market) told TOI from Ludhiana.
“We already operate at wafer thin margins at this end of the market, which come through efficiency in production and volumes. But it is now difficult to hold on to increased manufacturing costs any further and thus, we have to pass them on to the market,” Rai said. The price of a 'standard' cycle, a 'roadster' that is usually bought by farmers and labourer , is between Rs 2,100 and Rs 3,000 and companies say the price hike could be between Rs 120 and Rs 150, including taxes.
“This kind of a price hike means a lot for our customers, for whom this is equivalent to one day of sustenance. While we would increase the prices of our cycles by Rs 65-70 in the first week of February, that would be further increased by Rs 40-45 after about 15-20 days. This is being done to ensure that a steep hike is not passed on at one go,” said Atul Sharma, chief general manger (sales) at Atlas Cycles.
Out of the estimated 1.4 croreunits Indian cycle market, low-income people account for 75-80 % of sales, who buy the ordinary basic cycle mainly for personal transport. “The effect of this hike will be very high on our customers, many of whom are marginal farmers or daily wage labourers,” Rai added.
Naveen Pareek, sales head of Milton Cycles (a subsidiary of Atlas that makes low-priced cycles), also feared that the impact of the hike would be felt across market. “The customer will have to make adjustments for this through a day's salary. Many of them can actually postpone their purchase decisions till they budget for this,” Pareek said.
While the hike may be a problem for the lower-end of the cycle market, the other segments of the market - fancy, children and fitness - are not likely to be affected by this hike. “Purchases here are done by the affluent sections of the society for whom a few hundred rupees more will not make any difference,” industry analysts said.
Higher prices of steel and rubber have forced the companies to go in for a price revision, even as they fear that this would adversely hit customers who normally have average daily earnings of about Rs 100-150. Companies like Hero Cycles and Atlas have said they would be increasing prices from February, though this would be spread over two months to provide a cushion to highly pricesensitive buyers.
“Yes, prices will have to be increased as input materials have become dearer. Steel and rubber, two crucial elements, have become expensive along with other commodities like nickel and zinc,” SK Rai, managing director of Hero Cycles (that controls almost 40% of the Indian cycle market) told TOI from Ludhiana.
“We already operate at wafer thin margins at this end of the market, which come through efficiency in production and volumes. But it is now difficult to hold on to increased manufacturing costs any further and thus, we have to pass them on to the market,” Rai said. The price of a 'standard' cycle, a 'roadster' that is usually bought by farmers and labourer , is between Rs 2,100 and Rs 3,000 and companies say the price hike could be between Rs 120 and Rs 150, including taxes.
“This kind of a price hike means a lot for our customers, for whom this is equivalent to one day of sustenance. While we would increase the prices of our cycles by Rs 65-70 in the first week of February, that would be further increased by Rs 40-45 after about 15-20 days. This is being done to ensure that a steep hike is not passed on at one go,” said Atul Sharma, chief general manger (sales) at Atlas Cycles.
Out of the estimated 1.4 croreunits Indian cycle market, low-income people account for 75-80 % of sales, who buy the ordinary basic cycle mainly for personal transport. “The effect of this hike will be very high on our customers, many of whom are marginal farmers or daily wage labourers,” Rai added.
Naveen Pareek, sales head of Milton Cycles (a subsidiary of Atlas that makes low-priced cycles), also feared that the impact of the hike would be felt across market. “The customer will have to make adjustments for this through a day's salary. Many of them can actually postpone their purchase decisions till they budget for this,” Pareek said.
While the hike may be a problem for the lower-end of the cycle market, the other segments of the market - fancy, children and fitness - are not likely to be affected by this hike. “Purchases here are done by the affluent sections of the society for whom a few hundred rupees more will not make any difference,” industry analysts said.
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