Indian cycles may benefit from EU’s levy on China.

Europe has imposed an anti-dumping duty on China-made bicycles, and Indian manufacturers are zooming in on the continent with their premium offerings. Indian bicycle exports have the potential to grow into a $5-billion business from the present $200 million, feels Pankaj Munjal, MD of Hero Cycles and president of All India Cycle Manufacturers Association.

China, though, is the undisputed king in bicycle manufacture, with 50 million units exported annually and an industry five times the size of India’s.

However, the Indian brands are girding up their loins to try the impossible. The 48.5% anti-dumping duty has come as a shot in the arm for them. Adding to this their own confidence that their premium products can fulfill European expectations.

Hero Cycles and Atlas retreated from the lucrative European market about a decade ago. Indian cycle-makers have been focussing on Africa and neighbouring Asian countries in recent times.

“The Indian premium bicycle segment is growing 50% year on year,” said Pravin Patil, president, Hero Cycles. “The average selling price of premium category bicycles in India a year back was Rs. 8,000. It grew to Rs. 12,000 six months back whereas it is above Rs. 15,000 now.”

“This upward shift in premium bicycle segment has enhanced the capability of major bicycle makers,” Patil said. “This has helped us compete with China for advanced markets. We will soon enter into business with some European countries, discussions are going on,” he said.

I D Chug, director, Atlas said the company is planning to re-enter Europe. “We used to export to European countries about 10-15 years back. We used to get large orders from countries such as Holland. Once Chinese entered the market with sophisticated as well as cost-effective cycles, Indian companies lost that market. Now we match them in terms of pricing and quality. This is good time for Indian companies to enter European market,” Chug said.

Duty drawback and freight subsidisation help Chinese companies partially offset the impact of anti-dumping duty in Europe. Indian cycle makers have sought similar incentives for their exports. The Rs. 6,000-crore Indian cycle market has an annual volume of 15 million. According to Munjal, export alone has a medium term potential of $ 2 billion (close to Rs. 11,000 crore).

Source : hindustantimes.com