Sales likely to touch 1.45 crore units in FY22: CRISIL
Bicycle sales, which has seen a significant contraction in sales in the first quarter of FY22 due to second wave lockdown, is set to grow by 20 per cent this fiscal with the lockdown restrictions lifting up slowly.
Credits rating agency CRISIL said sales are likely to touch 1.45 crore units in FY22 compared to 1.2 crore in the last fiscal year.
Drivers of demand
According to most sellers, the key drivers of demand are the surge in non-contact and non-equipment fitness sports due to social distancing norms. Thus, the four-cycle segments that are normally sold, which are standard cycles, cycles of export purposes, premium cycles and kids cycles – only premium and the kid segments have driven up the demand. In the 2020 fiscal the kids and premium segment cumulatively enjoyed a 40 per cent share of the overall cycle sales, but CRISIL estimates that their contribution to overall sales has increased by 10 per cent. Now 50 per cent of overall sales are from this segment, which is likely to be the case in FY22.
KB Thakur, Member Secretary of All India Cycling Manufacturing Association, explained, “Growth has occurred in premium sports cycles and kid brands. Covid has increased health awareness amongst urban areas, with people taking up more fitness activities such as cycling. With gyms and pools closed due to social distancing norms cycling is the most convenient way to exercise”.
According to Thakur, demand for cycles was mostly driven by metropolitans and tier 1 cities, where demand grew by almost 100 per cent. Thakur also estimates the overall growth in FY21 to be much higher than what CRISIL estimates, at a 25 to 50 per cent increase in sales volumes in comparison to the 2019 fiscal year.
With the pandemic ongoing and social distancing norms likely to sustain for the foreseeable future and an almost permanent change in mentality regarding health amongst the urban populace, experts believe that the surge in demand in the premium and kids segments will sustain at a 20 per cent growth rate in sales volumes. Manish Gupta, Senior Director at CRISIL, further adds that the general cycle segment that saw contraction last year, which offset the strong growth seen in the premium segment, will also significantly expand, as with elections coming, state governments have started to invest in welfare schemes. This means that the 2022 fiscal will be the year that overall sales in the bicycle industry show a net growth after a contraction in FY20 and FY21.