State of Asia Pacific Two Wheeler Industry

Asia has the world’s highest concentration of motorized two- and three-wheeled vehicles. From scooterettes in India to tuk-tuks in Thailand to electric bicycles in China, these vehicles dominate the Asian urban landscape. Ownership and use are also increasing in rural areas where distances traveled are greater and fuel quality may be less reliable. These trends are serving to worsen energy and environmental impacts worldwide. And while motorcycles are currently among the most fuel-efficient motorized modes of personal transportation, rapid growth in population coupled with the increasing popularity of larger and less efficient models are eroding this sector’s energy and emission performance.

The choices China, India, and others make to control motorcycle emissions and fuel use will have a significant impact on their borders and throughout the world. China, for example, has adopted its first set of fuel economy standards in 2009 while simultaneously implementing an enhanced version of Euro 3, the latest European emission standards. The Euro program is emerging as the global norm with countries such as Thailand and Vietnam adoption standards based on the European program.

Asia Pacific Electric-Two Wheeler Market Outlook

Electric two-wheelers are becoming increasingly popular and important forms of urban transport in Asian cities, particularly in the People’s Republic of China. While electric two-wheelers’ popularity is evident in the PRC, their acceptance and adoption in other Asian countries is much more modest. The potential environmental benefit to Asian cities of electric two-wheelers could be significant, especially if electric two-wheelers replaced gasoline scooters and motorcycles.

Apart from China, other countries such as Vietnam, Indonesia & India are the biggest electric two-wheelers market in Asia Pacific region. India's electric two-wheelers have higher emission rates than those in Vietnam because of India’s higher reliance on coal power plants and higher electricity transmission loss rates. Whereas, Vietnam derives much of its electricity from natural gas power plants. Given the existing policy environment and technology, electric two-wheelers can be expected to fill up to 20% of the near future market across the APAC region.

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India Two-Wheeler Demand Analysis

In 2017, India overtook China to emerge as a global leader in the two-wheelers market. China, however, remains the leading exporter of two-wheelers. India concentrates more on the domestic market, unlike China which depends primarily on exports. The faster growth in two-wheeler demand is majorly due to rising income levels, growing infrastructure in rural areas, and the rising trend of scooterization, especially among women commuters.

The growing urbanization, increasing participation of women workforce, and development in road connectivity amongst others are top factors to drive improvement in two-wheelers penetration levels. As a result, the entire values chain of the two-wheelers industry starting from OEMs such as Bajaj Auto to multiple component suppliers like Apollo Tyres, Exide Industries, Minda Industries, etc are likely to witness steady growth in the near future.

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Future Outlook

Asia Pacific automobile industry is the fastest growing and is transforming to be a hub of the automotive industry. Globally two-wheelers are the most accessible & affordable automobile for transportation. But this trend is most evident in the Asia Pacific region. The region accounts for nearly 80% of two-wheelers of all the vehicles on road. Global two-wheeler manufacturers in the past decade have established their manufacturing unit across the APAC region.

Asia Pacific's two-wheeler industry estimated at USD 6.06 billion in 2016. The market is anticipated to grow at a compounded annual growth rate (CAGR) of 6.26% during the forecast period 2017–2025, to reach a market size of USD 123.98billion by the end of 2025.

The two-wheeler sales are highest in India & China on account of being the two largest & developing economies in the Asia Pacific. But the Southeast Asian countries including Thailand, Vietnam, Indonesia, Malaysia, Philippines, and Bangladesh have huge penetration of two-wheelers. Nearly nine out of every ten households own a two-wheeler.

The presence of a huge population in the APAC region with the majority falling in the low income to middle-income category. Thus the adoption of two-wheelers is the most affordable and wise choice across the region. Hence the market players recorded huge sales over the past decade. But rising per capita income of people in nearly every country in the Asia Pacific is thus registering a shift in automotive preference. People are shifting towards buying entry-level passenger cars.

For a complete study of the Asia-Pacific Two-Wheeler Industry, visit bit.ly/2RCXjpv.

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Goldstein Market Intelligence helping businesses to be successful at strategy and take informed decisions to grow the business in future.

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