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Wednesday, 22 May 2013

3W industry likely to perform well in the FY 2013-14 - Written on 23rd April 2013.


With the crash in Gold and crude prices, rupee is likely to appreciate and Indian economy may revive. This in turn will create a boom in the stock market.

Oil marketing companies and automobile industry will be largely benefited by the debacle in crude price, which hence will prove to be beneficial for the whole economy. If fiscal deficit will reduce, foreign investment will increase which will change the sentiment among people. Inflation rate in the country will also decrease and big change could be observed at macro levels.

I am bullish on 3 wheeler industry, and I foresee a very good future of this industry in the automobile sector.  3 Wheeler industry is the only one which has registered a growth of 5% in the last financial year. With the revival of the economy, the sales of 3 wheeler industry will be boosted.  Small commercial and passenger 4 wheeler which was once thought to be replacing 3 wheeler is under huge pressure. 3 wheeler industry is seeing growth and “4w replacing 3w” was just a gimmick and people are now realizing that.

Three Wheelers (3W’s) in India is widely used as an affordable means of short distance travelling and for transportation of goods. 3W is the backbone of passenger transportation and goods carrier for 1000’s of villages and towns and small cities of India. Even in the cities one cannot imagine life without a three wheeler. The 3W’s are also a boon amongst the city’s narrow roads, no footpaths and heavy traffic.

No vehicle in the world can match the economy of a 3 Wheeler.  India is the world’s foremost producer, consumer and exporter of three-wheelers (Source SIAM). 3W’s are the most economical mode of transportation available in the commercial vehicle category. It is the cheapest mode of passenger transportation in the world. Not only this, but it also provides with significant employment opportunities to individual with lower investment whereas returns of Investment are far better and faster. One 3W generates approximately 3.9 units of an employment in rural/ semi rural and small towns in India.

With major push in retail of consumer goods and better infrastructures available, the need of the economical transport like 3W’s has increased. Government should exempt three wheeler industry from excise duty in order to encourage its usage thus saving on costly imported fuel burnt by the small Four Wheelers (4W’s). Small 4W’s can never replace a 3W economically.  

PS: Written on 23rd April 2013.

2 comments:

  1. Recent approval of Gov for Quadricycles which is going to benefit Bajaj, do you see this to be a major threat to other 3W players in the industry?

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  2. Quadricycle will create a threat to small four wheeler industry. Thats why all four wheeler manufactures are making a hue and cry. Ultimately most of the three wheelers mfrs and even few four wheeler mfrs. will go into quadricycle.

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