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MOSL: AUTOMOBILES-2W industry at cusp of multiple disruptions-Industry to witness acceleration of R&D spends

Automobiles: 2W industry at cusp of multiple disruptions; Industry to witness acceleration of R&D spends

 

We attended Autocar Professional’s Two-Wheeler Industry Conclave, a conference focused on charting new growth paths for the 2W industry. Industry participants weighed the various opportunities and challenges that the industry faces, discussed the evolving e-mobility landscape and emerging market trends that would lay the foundations for the future of the industry. Key highlights: (a) several challenges persist in the medium term that could disrupt existing business models, (b) components industry needs to accelerate R&D spends to future-proof business, (c) scooterization, premiumization and digitization to gather further pace, and (d) competition from start-ups in EVs.

 Emerging market trends that would lay the foundations for the future

• Industry players unanimously agreed that scooters would dominate more than half the 2W market by 2020.
• Premiumization trend would gather pace, both within segments and inter segments.
• Over the longer term, the commuter motorcycle segment would shrink due to (1) commuters upgrading to premium motorcycles/4Ws, as affordability improves, and (2) more viable options like electric scooters.
• Total cost of ownership (TCO) and power parity is within sight, as new Li-ion models replace lead acid based models 2025 onwards.
• Digitization would replace traditional above the line marketing activities in the next 3-4 years.
• Stakeholders suggested the concept of ‘experience stores’ – smaller stores with limited staff, where customers can gain the virtual experience of riding the 2W.