DETERMINE THE IMPACT OF DEMAND

AND SUPPLY, ELASTICITY OF DEMAND

ON TWO WHEELER
BY- PURNIMA ROUT
PRIYANKA MANDAL
AATISH
GOPAL
 TYPES AND IMPACTS OF TWO
WHEELERS IN INDIA?
• The Indian two- wheeler business began in early 1950s, when automobile products of india
began producing scooters in the nation (API). Until 1958, API and Enfield were the only
manufactures.
• India is the largest producer and manufacturer of two wheelers in the world followed by the
Republic of China. Rising fuel prices is one of the primary growth drivers for two-wheelers
due to their higher fuel efficiency.
• In India, commuters across all age groups use motorized vehicles, especially two wheelers
owing to the escalating population and rapid increase in traffic congestion, thereby making
two wheelers as the most appropriate and convenient mode of transportation in urban
areas.
• The demand for used two wheelers has seen a constant rise over the past few years, especially
from models like Honda Activa, Aviator, TVS Jupiter, Bajaj Pulsar and Discover. Even in terms of
exports, two-wheelers produced in India are the proud products of the Make-in-India initiative
where nearly 7 in 10 automobiles delivered out of India are two-wheelers.
CRUISER TOURING SPORTS
BIKES BIKES BIKES

STREET
BIKES SCOOTER
GROWTH OF TWO WHEELER INDUSTRY

• As two wheelers have now become the most popular mode of transport
among the Indian.
• middle-class families, because of they are cost effective, economical
affordable and easy to navigate through the traffic.
• Now owning a two-wheeler has become a must for most Indians.
• Even if people own a car they prefer to have a two wheeler as it is very
economical and fuel-efficient.
These following factors can be distinguished for the growth of Two- Wheeler
Industry in India:-

 Steady increase in per capita income.

 Increased availability of fuel-efficient and low maintenance models.
 Changes in the demographic profile.
 Increasing urbanization which creates a need for personal transportation:
 Convenience with regard to commuting as compared to the public transport
system.
 The reduction in duties and taxes.
 Increasing number of models with different features to satisfy diverse consumer
needs.
 The first choice among youth and teenagers.
Due to the availability of cheap and easy consumer financing.
 MOTORCYCLE PRODUCTION MOTORCYCLE SALES VOLUME
VOLUME IN FIVE MAJOR IN FIVE MAJOR COUNTRIES.
COUNTRIES.

(Source: Compiled by MarkLines based on statistical data from national automobile industry
associations, motorcycle associations, etc.)Reference data: MarkLines Vehicle Sales Data by model and
countryMotorcycles (India, Thailand, Indonesia, Malaysia, Vietnam, Taiwan, Singapore, Philippines)
https://www.marklines.com/en/vehicle_sales/member
 MARKET SHARES OF TWO
WHEELERS IN 2022
 Honda Motorcycle & Scooters India (HMSI) and TVS Motor
turned out to be the major gainers during the April-June 2022
quarter. Honda’s share grew to 27% with volumes of 9.95 lakh
in Q1 FY23 from just 20% when it clocked sales of 4.91 lakh
units in the corresponding quarter of last fiscal. TVS marked a
year-on-year growth of almost 2 percentage point, growing its
volumes to 5.65 lakh from 3.28 lakh.
 Bajaj Auto however lost market share owing to the decline in
sales of its motorcycle.
 Suzuki Motorcycle and premium bike maker Royal Enfield
(RE) maintained their positions in the market respectively.
 A rapid adoption of electric vehicles in the two-wheeler
segment, EV startups also grabbed a tiny pie of the market.
DEMAND CURVE FOR TWO WHEELER
INDUSTRY

The reason for the Dtw curve being

highly inelastic is that we are faced
Dtw
with an ever increasing demand for
price

two wheelers.
Dn The Increasing GDP is one of the
major factors that makes this curve
quantit
y Inelastic.
 Supply curve for two wheeler industry:-
The Two wheeler industry supply curve "Stw" starts
Stw
the same way as the normal supply curve "Sn". When
Sn
price is zero nobody supplies or perhaps not entirely
true if we consider open source but close enough. As
price increases more resources are brought into play
and supply increases.​
price

The Stw curve starts after a gap because two wheeler

quantity industry is not cheap. With the ever-growing
population the supply is increasing as fast as it could
and currently we can't imagine the world without two
wheelers.
Conclusion :-Demand is rampant but inelastic so as price rises
it does not fall off very fast.

​Supply is severely constrained and is very difficult to increase

(particularly in the short run) so is also inelastic.​

Consequently markets take a long time to reach equilibrium,

which in turn means we need to consider the tensions arising
in a market which spends so much time out of equilibrium . ​
THANK
YOU