Indian 3-Wheeler Industry Performance

We at Management Punditz were receiving continuous requests on covering the 3-wheeler sales in India and here we present a detailed report on the same -

Three Wheeler Market in India has seen its own share of tops and turns. While India remains the world’s top producer, consumer and exporter of three-wheelers; challenges faced by it were many! The advent of safer, faster and price-effective 4-wheeled counterparts (say Tata Ace) did raise some serious questions on the sustainability of the industry in the recent years. Also government’s concern over safety and fuel usage has been worrying the manufacturers.  However, 3 wheelers remained to be an affordable means of short-to-medium public transportation and last mile connectivity for goods transportation. The significance was well identified by Taxi Aggregators (Ola, etc) and have added autos as well under their offering.

In FY2014-15, around 5,31,927 3-wheelers (load+passenger) were sold in India and 4,07,917 were exported (majorly to South Asian, African & Latin American Markets.

We have categorized the sales under Passenger & Load segments to highlight better clarity and extract deeper insights on the respective OEM’s performance –

• Passenger Segment:

A look at the last 7 months domestic performance and the respective Market Shares:

Domestic Sales Data (Wholesale Numbers)

Market Share Data

 Bajaj Auto has clearly been the winner in load category. The dominance is even higher in tier-1 cities where only the Petrol & CNG offering is being sold. While Piaggio dominates the upcountry market (Tier 2 & 3 cities), as diesel engines are predominant in these regions. However, to see the way these 3-wheeled passenger offerings contribute to these OEM's, a historical trend would be apt:

Historical Sales Data

 While Bajaj Auto & Piaggio are clearly the segment leaders; the race to the third position has become quiet interesting - M&M and Atul Auto are giving a tough competition to each other. While Mahindra has lost some ground, Atul's growth over the past 5 years has more than doubled and has meanwhile able to overtake even TVS in the race! The Gujarat based 3-wheeler OEM has made considerable inroads in the passenger segment - Atul is surely the manufacturer to look out for.
Also in FY 14-15; the segment has seen the highest sales in past 5 years! This clearly highlights that the demand is going to stay for these 3-wheeled sprinters in near future.

• Load Segment:

Domestic Sales Data

Market Share Data

Historical Trend (last 5 Financial Years)

Piaggio leads in the segment by a huge margin. However, it has lost over 10% Market share in previous 5 FY's! The gains has been made primarily by Mahindra & Atul Auto. Do note that the entire segment (load category) depends on diesel offerings and hence the drastic difference in sales from its passenger siblings.  The segment has seen an upward movement in the past 3 FY's and we see the numbers stabilizing ~1 Lakh units/annum as the competition from the 4-wheeler load options remain significant. Also the possibilities for the OEM's to innovate in the segment seems limited.