EVs, most impactful factor for Indian two-wheeler industry

The next decade promises to be a watershed for the Indian automotive industry, particularly its two-wheeler segment, which is today the largest market by volume in the world. 

With a largely conducive economic environment, there is absolutely no taking away from the market’s rich potential given the country’s significant young population and a rising middle-class with increasing incomes. 

Add to this, a constantly improving infrastructure with rising urbanisation, better all-around connectivity and consequent elevation of rural incomes with more realisable aspirational lifestyles of India’s working classes, the journey ahead indeed looks quite promising for the sector. 

While there are many factors collectively and individually contributing to a positive trajectory for two-wheelers over the course of the next 10 years such as fuel prices, commercial taxi services, rural-urban mobility and traffic density, among others, the most important dimension relates to the impact of policy level interventions. 

With the right amount of foresight, sensitivity and circumspection, the government can emerge as the defining catalyst for this industry, currently facing some challenging headwinds. 

In this context, the positive and crucial role of the automotive industry cannot be overstated. Right from setting standards, to best practices, to training and distribution considerations, the auto sector — along with government — will be instrumental in giving shape to the coming decade of auto evolution. 

Going beyond policy, the key game changer for the decade will be how well we address the present contentious issue of marrying technology with sustainability. 

Here, the BS VI standard’s adoption and roll-out is very critical. Through this very environment-friendly fuel standard, the industry, as well as the users, will be able to help address vehicular pollution challenges. 

While BS VI is an apt intervention, re-orienting the industry to this standard is a very intense and capital heavy exercise. The forthcoming decade will largely be also defined by what the drivers of purchase for two-wheelers are going to be. For customers, the need spectrum is clear. Customers demand quality and better quality will continue to be of unbeatable value in the next decade as well.  

With indisputable high-value offerings becoming the norm for the true market leaders, the best commuting solutions will be the most consumer satisfying ones. Of course, sustainability factors, comfort, aesthetics, cost, all shall continue to contribute to the purchase mix, but increasing pressures of economic feasibility will become even more paramount. 

In the coming years, we can expect customers to seek out innovative options, which can optimise their vehicle ownership costs while still providing them an edge where technological and environmental considerations are concerned. Manufacturers shall need to break new ground in various areas to meet these ever-demanding expectations. 

Technology is also creating ease of use and maintenance in the automotive sector. With the internet of things (IoT) fast becoming all-pervasive, the two-wheelers of tomorrow will increasingly be predictive and assistive machines. 

For example, helmets and vehicles can connect for driver safety through Bluetooth; fuel efficiency and refuelling advice can be sent to riders well ahead in advance and with data capturing becoming easily feasible, cities and traffic networks can better manage rider-ships for an improved and more comfortable commuting experience.

One key ubiquitous development that is sure to alter the two-wheeler market is e-commerce. A plethora of choice and pressures of overhead costs is moving the industry towards this inevitability. 

With real-estate becoming scarce, surging inventory costs and supply-chain management automated, industry resources will be better put to fulfilment purposes rather than expended on costly marketing promos. 

On the evolution of the industry, especially the two-wheeler segment, the electronic vehicle (EV) scenario will be the most impactful factor for the Indian automotive market in the next 10 years. An ambitious undertaking, there are many facets to its introduction that need careful and collaborative consensus. 

A phased introduction, which takes care of extant realities and socio-economic as well policy-level, technological and infrastructural issues, is the best way forward. 

The market, which has developed on the viability of ICE has a supply-chain eco-system structured around this technology. The change to EV in the coming five years or so will need an industry-wide seismic shift. Time and caution will help in making this move effective.

Author is Chairman, 
Yamaha Motor India Group of companies