HomeBike NewsBajajIndia Quadricycle growth sees Bajaj Auto atop: ICICI Securities special report

India Quadricycle growth sees Bajaj Auto atop: ICICI Securities special report

Government specs indicate quadricycles as a replacement for auto rickshaws. Size economy, and possible low running costs render them suitable for contract carriage applications rather than stage carriage applications. This indicates bigger impact on urban PSCV market than in rural India.

Regional transport Authorities (RTA) would need to determine fees for replacement to happen naturally. As such, fare tariffs would need to be as close as possible to auto fares with room for an estimated 10-20% premium fare price increase.

OEMs would need to ensure that quadricycle pricing is competitive and as economical as a 3 wheeler for operators. A hige price difference will not be sustainable, and a premium purchase price increase shouldn’t be 25% more vs an Auto. Quadricycle benefits for commuters need to be visible or else acceptance will be met with resistance.

The report says quadricycle sales can touch 450K by FY20, with a 1st product launch expected in FY15. Auto Rickshaw sales are likely to decline from around 159K to less than 100K owing to natural replacement in tier I cities, and creation of alternative transport system in tier II and tier III cities. Permit releases in urban markets appear to be increasing at least in terms of intent. Urban PSCV population may grow at a CAGR of 4.9% over FY14-FY20 vs. less than 3% over FY06-FY13.

Bajaj Auto, Mahindra and Mahindra (M&M) and Tata Motors could be beneficiaries of quadricycles. Bajaj Auto has 80% plus market share in the urban PSCV segment and and has worked around urban RTAs, commuters and operators. Both M&M and Tata Motors are present mostly in the rural market.Quadricycles provide both Indian manufacturers an opportunity to enter urban PSCV segment. How this benifits them will be seen as teh playfield widens. To start with Bajaj Auto remains the best play on quadricycles. Bajaj Auto quadricycle RE60 was unveiled at the 2012 Delhi Auto Expo.

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