FOR OVER 10 YEARS, V. Vijayaraju was an authorised dealer for Kinetic Honda, the popular non-geared scooter. Today, he continues to sell two-wheelers—but bicycles instead of scooters. Last year, Chennai-headquartered TI Cycles, part of the Rs 17,051 crore Murugappa Group, asked Vijayaraju to exclusively sell BSA-Hercules products, primarily cycles. Initially, Vijayaraju thought this was a regressive move, but since he saw the scooter dealership going nowhere, he took a chance on cycles.

As it turns out, he wasn’t taking that much of a chance. Cycle manufacturers are targeting urban Indians, moving away from their traditional rural base. Time was when the only cycles sold were to farmers, blue-collar workers, and students. Since this was a price-conscious market, manufacturers kept prices of standard models low; the ceiling was Rs 4,000. Any rise in input (rubber, steel, etc.) costs upset their business plans. By the early 2000s, the typical rural cycle buyer realised that he could easily afford motorcycles and scooters, thanks to easier loan terms, as well as higher disposable income. In the five years up to April 2006, bicycle sales fell 5%, while the market for motorised two-wheelers rose 11%.

Today, the typical cycle buyer is far more likely to be a yuppie who cycles for fun, or under doctor’s orders, or because he’s environment conscious. If the rural-urban ratio was 80:20 in the 1990s, it is now 65:35, says Rajesh Mani, general manager for marketing, TI Cycles. A higher disposable income and better roads have helped popularise cycling in urban India.

Cycle makers are cashing in on this change. Today, the large cycle manufacturers—Hero, TI Cycles, Atlas, and Avon—have more than 75 models spanning age groups. “Over a seven-year period, a single company has probably launched nearly 150 models,” says A. Majeed, a cycle retailer in north Bangalore. Since 2006, there has been demand for bicycles priced over Rs 8,000. High-end brands such as Firefox now have seven company-owned outlets and over 60 franchisee-outlets in India, to sell from a range of almost 70 models priced between Rs 15,000 and Rs 70,000.

“We loaded [cycles] with better components and features, like more gears, disc brakes, and suspensions. Similarly, we improved the features for rural customers (special bikes for carrying load or just commuting) and women,” says Mani, pointing to TI Cycles’ association with global brands Bianchi and Cannondale in the high-end categories.

Retailers are happy with the changes. “I can earn more selling one premium model now, than I did by selling a hundred in the mid-1990s,” says Majeed.

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