Three-wheelers on auto majors' radar

Overshadowed for long by glitzy cars and sleek motorcycles, the unglamorous three-wheeler has been registering brisk sales in India and abroad, prompting two-wheeler majors like the Munjals and TVS Motor to enter the segment.

The Munjal family-owned Hero Cycles has developed a prototype of an electric three-wheeler at its manufacturing facility at Ludhiana, which it hopes to roll out in June this year. TVS Motor is investing Rs 115 crore in a 100,000 three-wheeler facility at Hosur in Tamil Nadu, which will go on stream in August this year. In addition, Gurgaon-based Continental Engines will set up its plant near Roorkee in Uttarakhand with an initial capacity of 15,000 units.

The reason why more players are joining the market, currently dominated by Bajaj Auto, Mahindra & Mahindra, Force Motors, and Piaggio, is simple: The market for three-wheelers is booming like never before.

According to the Society of Indian Automobile Manufacturers, the domestic market for three-wheelers grew 15 per cent to 369,026 in April-Feb 2006-07, while exports shot up by 92 per cent to 134,024. 
 

ON AUTO-PILOT Three-wheeler production & capacities
Year	Production	Capacities (forecast)
2007-08	536,508	760,635
2008-09	605,913	757,391
2009-10	685,030	856,288
2010-11	775,343	969,179
2011-12	875,583	1,098,229

As a result, three-wheeler production went up by 31 per cent to 509,736 during the period.

Three-wheelers, experts say, are turning out to be the chief mode of public transport in smaller cities and towns, while the development of organised retail sector has increased their demand as goods carriers in metros.

There is also a huge demand from overseas markets as India is amongst the few countries making such vehicles.

Abdul Majid, an analyst with PricewaterhouseCoopers, told Business Standard: "The rising demand from towns and villages and the conversion of autorickshaws to clean fuel (CNG) has turned around the three-wheeler market. They also serve as an excellent last mile transport vehicle."