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Neha Kaushik

New Delhi , Oct. 26

AS in the past, motorcycles are expected to grow at a rate higher than the average two-wheeler industry as a whole.

According to a report on the Indian automotive industry by ICRA, the motorcycle segment is expected to report a CAGR (compounded annual growth rate) of 11.5 per cent during 2004-07.

This implies an increasing share of motorcycles in incremental two-wheeler sales. While the sales of motorcycles is expected to grow from 4,258,054 units in fiscal 2004 to 5,900,451 units in fiscal 2007, sales of the total two-wheeler market are set to grow at a CAGR of 9 per cent from 5,402,280 units in fiscal 2004 to 6,957,715 units in fiscal 2007.

According to the ICRA study, "the erstwhile dominant segment of the two-wheeler industry, scooters, is expected to report a marginal growth. The share of mopeds is expected to decline further in the medium term".

The study adds that in case factors such as rural demand, excise structure, prices of two-wheelers and so on move in a direction favourable to the Indian two-wheeler industry, it could report a higher CAGR of 10-12 per cent over the period 2004-07, with motorcycles displaying a CAGR of 14-15 per cent.

Further, the growth in profitability of the two-wheeler industry is also set to continue at a healthy pace. According to the report, the net profit of the Indian two-wheeler industry increased at a CAGR of 12 per cent during fiscal 1997-2002. "The healthy growth in the sales of motorcycles, scooterettes, and gearless scooters ensured growth in profitability".

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