Slowdown fails to dent sale of bicycles

Vijay C Roy

Indiatimesworld News Service

Chandigarh, September 23

The overall slowdown in the economy has failed to dent the sale of bicycles in the country. According to industry, volume of sales by the organised sector is more or less same as compared to last year at 63.20 lakh units.

“As far as sale is concerned, by and large the trend is same in the first five months of the current fiscal. If everything goes well, the industry expects to close the current fiscal on a positive note,” said KB Thakur, secretary general, All India Cycle Manufacturers' Association.

Overall industry size of the organised market is around 1.65 crore bicycles and approximately 2 crore bicycles are sold annually, including from the unorganised sector.  Punjab accounts for 92% of the country's total production of bicycle parts and 75% of bicycle production.

There are 4,000 ancillary units in Ludhiana besides cycle manufacturers such as Hero, Avon, Hi-Bird, Nova and Neelam. The industry was expecting a positive growth. However, it has been marred by two major issues.

“Structuring of business by two prominent manufacturers led to decline in production, which further affected the sales and also the numbers,” said a source wishing not to be quoted.

Secondly, the “under-invoicing” by some unscrupulous dealers in Ludhiana has hit the market of the organised players and is also leading to GST evasion.

“These players resort to unlawful bicycle manufacturing and marketing either via ‘no billing’ or ‘under-billing’ throughout the bicycle value chain. This not only results in loss to the state exchequer but also to the industry,” the sources said.

Recently, GST Commissionerate of Ludhiana raided and booked around 11 such bicycle manufacturers with seizure of conclusive evidences of GST evasion. The manufacturers complained that this action, however, was required to be taken at an all-India level, as it was directly affecting the investments, including FDI in bicycle technologies. 

Sources added that bicycle is one of the most vulnerable products for GST evasion due to the fact that 80% of the 2 crore plus bicycles sold annually are priced below Rs 5,000 with low profit margins. 

Bicycle sales in FY19

Segment Volume(units) 

Roadster  88,42,519

Fancy 44,62,188

Kids 18,45,166

Exports 7,71,737

Others 5,57,512

Total 1,64,79,122