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Automotive Product Finder Magazine | Three-wheeler segment: Moving towards clean mobility
Three-wheeler segment: Moving towards clean mobility
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In this segment, passenger carriers witnessed a growth of about 34 per cent y-o-y and goods carriers witnessed a growth of about 10 per cent during the period. In terms of exports, the segment registered a sharp rise of nearly 51 per cent year-on-year, says Neellohit Banerjee.
Three wheelers are an integral part of the country’s automobile sector as they are one of the most preferred means of transportation in rural as well as urban India. India is positioned as the largest manufacturer as well as market for three-wheelers globally with industry volumes of around 1,021,911 units as of FY18. Of this, passenger carriers constitute about 85-90 per cent while goods carriers hold the rest. Bajaj Auto, Piaggio Vehicles, TVS Motors and Mahindra & Mahindra are some of the leading players in the 3W segment.
In FY19 (April-December), sales of three wheelers registered a double-digit growth of over 31 per cent y-o-y vis-à-vis 16 per cent growth during the corresponding period previous year on the back of improved farm activities, higher state connectivity and near normal monsoon in most parts of the country, says Darshini Kansara, Deputy Manager, Industry Research, CARE Ratings. Passenger carriers witnessed a growth of about 34 per cent y-o-y and goods carriers witnessed a growth of about 10 per cent during the period. In terms of exports, the segment registered a sharp growth of about 51 per cent y-o-y on back of low base of last year coupled with Sri Lanka, Bangladesh (within South Asia) followed by Middle East and Africa, accounting for around 90 per cent of exports from India, as per the industry estimates.
“Export demand in FY18 was impacted due to some regulatory moves by countries like Sri Lanka (hike in import duty) and Bangladesh (as per new regulation three-wheelers not allowed to operate on highways), currency fluctuation and reduction in export incentives. However, Indian OEMs have started exploring relatively developed markets in the ASEAN and Latin American region over the past few years. Bajaj Auto accounts for the largest share of 65-70 per cent in the exports of three-wheelers from India, followed by TVS Motors which accounts for about 25-30 per cent,” Kansara states.
Transition to clean mobility
The government’s National Electric Mobility Mission Plan 2020 anticipates achieving 6-7 million sales of hybrid and electric vehicles by 2020. For this, many foreign and Indian start-ups in the two and three wheeler segments have entered the Indian markets. However, with challenges such as frequent policy changes and lack of required charging infrastructure, established three-wheeler manufacturers such as Bajaj Auto and TVS Motors plan to adopt a wait-and-watch approach before entering the EV bandwagon.
Kansara informs, “Bajaj Auto, however, has begun its R&D in the EV space to cut costs and make their own battery management system. Mahindra Electric Mobility, part of Mahindra Group, recently opened an EV technology manufacturing hub in Bengaluru with an investment of about Rs 100 crore.”
Some of the leading foreign players, for instance, Japan’s Terra Motors is planning to launch e-rickshaws targeting Indian three-wheeler market in next few months. In April 2018, the Society of Manufacturers of Electric Vehicles (SMEV) had signed an agreement with the Taiwan External Trade Development Council (TAITRA) to jointly work for the EVs through the exchange of information and technology.
“Now, with the government expected to come with a long term policy on green mobility, electric vehicle manufacturers are also waiting and planning to invest heavily to develop more advanced, efficient and affordable electric three-wheelers. This is likely to fuel growth in the Indian electric three wheeler market in the coming years,” shares Ayush Lohia, CEO, Lohia Auto Industries.
With some of the leading cities being identified as India’s top polluted cities with highest levels of air pollution, NITI Aayog has stressed on an urgent requirement for switching to electric vehicles (EVs). “To achieve this, the end to end connectivity needs to be enhanced through clean vehicles or e-rickshaws by 2022 along with periodic phasing out of private diesel vehicles,” believes Kansara. The sales of e-rickshaws have registered a sharp 277 per cent y-o-y growth during FY19 (Apr-Dec).
India today is talking about improving air quality levels and reducing use of fossil fuels aggressively. As mentioned earlier, India has to improve the last mile connectivity through clean vehicles or electric vehicles. “Initiative has been taken by many state governments by planning to introduce electric vehicles as part of public transport giving way for growth in sales of e-rickshaws and other state transport vehicles,” she reveals.
There is a need for a long-term and comprehensive policy framework covering all stakeholders, that allows for continuity and attracts desired investments required for EV deployment. “EV space will also see differentiated products from different OEMs. Range, technology, battery life, time required for charging, charging method, battery swapping, vehicle durability and performance are various elements where companies will be having differentiation,” explains Prashant R Ahir, DGM (Business Planning & C.I), Intracity Business Unit, Bajaj Auto Limited.
Brighter times ahead
The market for electric three-wheelers compared with passenger cars in India is much bigger due to lack of charging infrastructure for private vehicles. “Currently, India has about 1.5 million e-rickshaws, marginally higher than China’s electric passenger car fleet of 1.35 million. As of FY18, the number of three-wheeler EVs (850,000) sold in the country is over 700 times that of four-wheeler EVs (1,200) as per the Society of Manufacturers of Electric Vehicles,” shares Kansara.
Kansara further informs that in FY19 (Apr-Dec), the industry has seen a sharp growth of close to 300 per cent y-o-y showing the tremendous opportunity the country has in terms of volumes. “Going forward, with government’s aim to achieve at least 30 per cent share from EV of the total automobile sales by 2030, we expect the three wheeler industry segment to only witness growth.” Also, more investments by both domestic and foreign players is expected in the segment.
Initiative has been taken by many state governments by planning to introduce electric vehicles as part of public transport giving way for growth in sales of e-rickshaws and other state transport vehicles.”
- Darshini Kansara,Deputy Manager, Industry Research, CARE Ratings
Mahindra And Mahindra
National Electric Mobility Mission Plan 2020
Taiwan External Trade Development Council
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