The Indian two-wheeler industry has finally arrived. Unlike in the past, the two-wheeler companies are no longer dependent on foreign companies for technology to survive in the intensely competitive industry. Some of the indigenously developed two-wheelers are at par with best available models in the industry. In addition, Indian companies now export their indigenously developed two-wheelers to some of the world's toughest markets.
The Indian two-wheeler industry has been growing at an annual compound rate of over 10% during the past five years. Today, India is the second biggest market for two-wheelers in the world. Gone are the days when the Indian companies had to depend on foreign partners for technological help. Currently, some of the top selling brands of two-wheelers in India are indigenously built. Success in the domestic market prompted some of the leading Indian companies such as Bajaj Auto and TVS Motors to set up manufacturing facilities in the immensely competitive South East Asian and Latin American markets.
Till mid 1980s, there was very little choice before the Indian customers as far as two-wheelers were concerned. It was limited to a few models which were technologically outdated and less fuel efficient. In the motorcycle segment, there were only three manufacturers: Royal Enfield, Ideal Java and Escorts. This segment was dominated by Royal Enfield's 350cc Bullet, the only motorcycle with a four stroke technology. Bajaj Auto1 was the market leader in the scooter category, while TVS, Hero Motors and Kinetic Motors had a minor presence in the moped segment. The Indian two-wheeler makers enjoyed protection from the Government. The entry of foreign players was restricted and thus, the transfer of technology was minimal. The Indian two wheeler companies were technologically incompetent to bring in any significant improvements in their existing models or roll out new products. Consequently, there was no motivation to innovate, step up production scales or enhance quality and product range. As a result, the Indian market was underserved and was dominated by few companies.
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