Major two-wheeler companies like Hero Honda and Bajaj Auto remain unfazed by the competition from the new car, the price of which will not be much more than that of premium motorcycles.
"We see it as an opportunity to become more competitive. We have the advantage of much lower maintenance and operating costs. The under-developed rural infrastructure will allow the two-wheeler market to thrive, though some upgrades and changes will be necessary," said Pawan Munjal, managing director, Hero Honda.
Bajaj Auto chairman Rahul Bajaj said: "India has one two-wheeler for every 30 people, while even a small country like Taiwan has a ratio of one vehicle for every two persons. Then, there is lack of mobility infrastructure for general public in our country. Bad shape of urban public transport system in our country will push people to go for two-wheelers. There is big untapped market for us on price and the much-touted people's car will not be less than Rs 1.5 lakh (ex-showroom)."
The two-wheeler industry, growing at 16 per cent, produced a record 7,741,261 units from January-November this year accounting for 77 per cent of India's automobile market.
The existing players say that their traditional advantages will propel the two-wheeler industry against any threat from Tata's car.
Apart from Tata Motors, Kolkata-based Global Automobiles (backed by Xinitus software Limited) and Delhi-based tractor company Sonalika are also planning cars that will be priced somewhere between a high-end two-wheeler and the current entry-level car, Maruti 800.
Anticipating the one-lakh car eating into some of the potential bike market, the two-wheeler manufacturers' are pinning their hopes on the large pedestrian and bicycle-riding population as well as those using public transport.
"Customers, who go in for premium segment motorbikes, do so more for the thrill of riding a good bike. Those, who buy two-wheelers as a family vehicle, usually go in for entry-level or executive class bikes that are priced between Rs 32,000 to Rs 45,000. For them, a jump to Rs 1 lakh or more will be a big jump. Therefore, we think that the proposed car will not make a dent in our business," explained Milind Jadhav, Bajaj's regional manager for East.
