Unlock Asia-Pacific (APAC)Two-Wheeler Market Growth Potential
Asia has the world’s highest concentration of motorized two- and three-wheeled vehicles. From scooterists 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.
Growth Driving Factors
Electric two-wheelers, by its swiftness and dexterity, easy operability and easy maintainability, affordability, and low pollution, are most welcome among city dwellers, short-distance commuters, and frequent road drivers and users of special needs. Besides personal use, electric two-wheelers also increasingly find their place in public services, such as urban sanitation and domestic and short distance patrolling, in delivery service, etc.
A well established traditional two-wheeler market in Asia Pacific countries, such as in China, Japan, India, South Korea, Indonesia, Taiwan, Vietnam, Thailand, Malaysia, etc., are passing on the market share to electric two-wheelers. India and Indonesia are the two emerging markets following China. In the case of India, widely available and already existing electricity net, popularity density and rapid urbanization are making India ready for an exciting transformation to the age of electric two-wheelers.
Currently, e-bicycles sold in the Asia Pacific region are at a price on average almost one-tenth of that in West Europe and one-fifth of that in North America. Lithium-ion (Li-ion) battery sees a much higher adoption, more than half, in West Europe and North America, while in the Asia Pacific where consumers are more price-sensitive, it is only 4 percent at the time being.
Challenges To Overcome
Two-wheelers, as with all other internal combustion engine-powered vehicles, emit the products of full and partial fuel combustion. Several of these emitted products have been identified as direct or indirect causes of air pollution. A limited number of studies have evaluated the contribution of motorcycles to conventional and toxic urban air pollution inventories and pollutant exposure in Asia.
Motorcycles have been identified as the largest source of particulate emissions at busy traffic intersections, accounting for almost half of the emissions measured. Moreover, a study of toxic air emissions from vehicles in Bangkok, Thailand found a strong correlation between motorcycle traffic patterns and airborne benzene concentrations.
Trends & Opportunities
Southeast Asian countries also termed the ASEAN bloc, are witnessing the huge expansion of the two-wheeler industry. The elimination of tariffs on imported completely built-up (CBU) vehicles enables OEMs to treat the region as a single market.
Thailand, the region’s biggest manufacturer, wants to raise annual production to 3.5 million units by 2025. Countries in the bloc are laying favorable conditions for electrification.
Thailand is planning tax exemptions for companies who want to manufacture EVs and EV components, and the Philippines will introduce excise duty exemptions for EVs and hybrids. Japanese OEMs continue to dominate the market. Others, such as Ford, can still find success in the region by playing to their strengths. Pick-ups are an important and popular offering, particularly in markets such as Thailand.