The Rise of bicycle is proving to be a major threat to 2-3 wheeler industry

A brisk afternoon filled with excitement and awe as we Rendez-Vous at our ideal spot bursting with pride. A beautiful ride, each identifying with its owner, we rode down the street celebrating our youth with nature. Each pedal paces us with a rush of serotonin as the wind gently caresses our face while our head is filled with memories that we will never forget. Growing up, my bicycle was not just a mere means of transportation, it was my best friend that I rode right up to college.

The global bicycle industry is predicted to grow exponentially at a healthy 5.02% CAGR over the period as many of us today switch over to the old pedal. Bicycles promote a variety of advantages that take us one step towards a greener environment. The 21st-century youth has identified with many pressing issues related to climate change and increasing health adversities due to our inactive lifestyle. The covid crises have been glasses of gloom but the opportunity to pause and look back has been the rose-tinted spectacles we needed to get through as a community. The pandemic has induced constraints on physical fitness and leisurely activities. Hence individuals have adopted bicycles to travel for short or medium distances. This will likely lead to cycle safe infrastructure and a growing trend that will likely stay long-term. Many countries are already stepping towards more cycling-friendly streets, providing incentives for riding bicycles, spreading education about a greener and cleaner future, and many more.

Many factors have contributed to the increasing popularity of bicycles, however, these are the major factors that we narrowed down.

Health and Well-being
Safety
Environmental Preservation
Health and Wellbeing:-

It is a proven fact that people who have a physically active lifestyle have higher well-being than the rest. It contributes to better emotional and mental health. Cycling aids in weight loss and helps strengthen our immune system while it has also been shown to improve one’s mood. Today’s generation strives for their own well-being and is driven with a passion for the same. The pandemic had closed down various regular exercising facilities like gyms, swimming pools, playgrounds, sports courts, and so on. Bicycling provided an opportunity to get in their daily exercise while peddling off to create a better future for themselves. Hence many people globally chose to switch to cycling as a means of daily transportation.

Safety:-

The need for social distancing created a lot of obstacles in the functioning of our daily lives. Public transportation which was most of our daily transportation had to shut down to maintain social distance amidst the pandemic. Hence bicycling became an alternative to public transportation as it checked various boxes of safety. The risk of exposure to unsanitary vehicles or germs is mitigated if one rides a bicycle. The term for the growing demand for bicycles is called the “bike boom”. According to a BBC article, Beijing’s bike-sharing system increased by 150% in March, and cycling traffic in Dundee Switzerland grew by 94% in April.

Environmental Preservation:-

None of us are unaware of the deterioration of the climate that is caused by the advances of mankind. Bus, trains, cars or motorbikes contribute to all kinds of pollution and have not only affected mankind but also the flora and fauna of the world. However, many of us today are getting more and more aware of climate change and many are choosing sustainable options for fashion, food, transportation, and so on. The bicycle impact on the environment is positive and is a great step towards sustainable transportation as they are greener and more suitable for the environment. Even though we have upgraded everything around us due to advancements in science, economics, or technology, bicycles remain a staple in this global marketplace.

India is the second-largest bicycle manufacturer and the industry is pedaling towards a demand growth of 20% as the sales are likely to touch 1.45 crore units this fiscal reported by CRISIL. India is also the third-largest consumer of bicycles and the demand is set to reach a market value of INR 17.4 Billion by 2024 growing at a CAGR of 49.5%. Europe saw a boost in its bicycle market after a dull first quarter in 2020. A positive trend has been followed by countries like the UK, Spain, Germany where the middle-class population is the highest consumer of bicycles. The UK market has been benefitting due to positive support by their government announcing new initiatives. The “Fix your bike” scheme announced by the UK government provides a 50 euro voucher to citizens urging them to get their bikes repaired and use them as transportation. Chinese cycling companies are aggressively investing in Europe which will boost the market even further. The global bicycle market is expected to reach US 82.4 billion dollars by 2027 over the analysis period of 2021-2027.

While the bicycle industry is set to reach new heights post the pandemic, the automotive industry is neutral as they struggle to keep up with the post-pandemic consumption needs of the consumers. The closure of factories, showrooms, and disruption of the supply chain has created a major obstacle for the automotive industry. Auto industries suffered a 34% decline in H1 2020-2021. Exports dropped by 23.6% while Imports had a sharper decline of 32.7%. Moreover, environmental regulations also impose major changes for the automotive industry. As bicycles are a more sustainable option, they have emerged as a threat to the automotive industry. The “Shared mobility” option is also a threat to the industry as it is more economical for people. The cab giant Uber has also offered the option of carpooling for the same destination resulting in fewer vehicles on the street.

Let’s imagine a parallel world, where everyone starts using bicycles as their primary form of transportation. Would everything be rainbows and sunshine as we expected? Except for the obvious positives, there could be many negative impacts of bicycles that could possibly create more obstacles. There will be an obvious decline in the automobile industry which will bring down employment in millions. Massive layoffs will take place and the countries will face clear obstacles in reviving the economy. Many countries like Japan, China, South Korea, Germany, and so on who have created automobile giants will experience a hit in their overall income. As the world is so dependent on the automobile industry, the sudden change will surely blanket the world with recession. The fast-paced daily lives that all of us are accustomed to will slow down drastically and many industries other than automobiles will also face negative impacts. So are we ready to shift to bicycles as our primary mode of transportation or are there other sustainable ways that can be adopted by the automobile industry?

However, the automotive industry has a chance to restructure its organisational operations, adapt to the newer and more sustainable demands by the consumer. The new innovations have already changed the way we are looking at the automotive industry. New and creative electric creations by tesla are one of the famous examples that are moving towards sustainable energy futures. Many countries are adapting to electric vehicles, Norway being the leading country in having the most electric or hybrid cars on their streets. Education about sustainable products has been given through social media platforms, hence it has become more available and accessible to the globe. The automotive industry is already understanding the importance of greener products and the pros that it brings not only to their company but to the environment in general. In the near future, we are going to see cleaner alternative creations by this industry. There is always a silver lining!

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Blog Published by: Akshita Sukhramani, Student Risk Committee Member