India Three-Wheeler Market Picking Up Steam: Projected to Grow at a CAGR of 9.1% by 2027

India three-wheeler market is growing at a high CAGR because of the lack of a structured public transport system in the country. Furthermore, the high demand for cheap and efficient transportation for short distances, especially in small cities and towns, favors the market's growth.

A recent study, conducted by the strategic consulting and market research firm,Report Ocean, revealed that the India three-wheeler market was worth USD 7.64 billion in the year 2020. According to the study, the market is estimated to grow at a CAGR of 9.1%, earning revenue of around USD 14.02 billion by the end of 2027. India three-wheeler market is growing at a healthy rate because of the lack of a structured public transport system. Additionally, the high demand for cheap and efficient transportation for short distances, especially in small towns and cities, is one of the major factors driving the growth of this market. India's three-wheeler market is set to benefit from various government initiatives to boost the number of electric three-wheelers on roads and establish charging stations at various locations. Nevertheless, the popularity of cab and ride-hailing services may act as a major restraining factor for the market's growth

Income Generation from Three-Wheeler Auto Rickshaws Driving the India Three-Wheeler Load Carrier Market

The majority of three-wheeler auto-rickshaws in Indian cities are operated by migrants looking for work and income. As the unemployment rate in India is increasing at a high rate due to the growing population and limited employment opportunities in rural India and small towns, huge chunks of people are migrating to big urban areas and opting for jobs as auto-rickshaw drivers. This is anticipated to propel the demand for three-wheelers in India in the forecast period.

Increasing Demand for Three-Wheeler Load Carriers Driving the India Three-Wheeler Market

The demand for three-wheeler load carriers has been witnessing significant growth over the past few years. The flourishing e-commerce sector and the increasing demand for transport of goods are expected to emerge as major factors influencing the load carriers demand. The low cost of load carriers and their load capacity of around a tonne explain their greater commercial use. The demand for three-wheeler load carriers will increase as the use of e-commerce platforms grows and people have access to goods from around the world.

India Three-Wheeler Market - By Fuel Type

Based on fuel types, the India three-wheeler market is segmented into petrol/CNG, diesel, and electric. The petrol/CNG vehicles have the most prominent presence in the India market. The high number of petrol and CNG pumps across various locales plays an important part in driving the demand for this fuel type segment. However, highly volatile fuel prices and their increasing rate is prompting consumers to increasingly shift toward electric vehicles, due to which the electric segment is gaining significant traction in India. Furthermore, increasing environmental consciousness and favorable government initiatives for cutting their carbon emission are driving the demand for electric vehicles.

India Three-Wheeler Market - Regional Insights

Geographically, the India three-wheeler market is segmented into North India, South India, East India, and West India. North India accounts for the largest share in the India three-wheeler market. However, the countrys southern and western regions also cover a substantial share of the market. According to the officials records, around 270,000 auto-rickshaws are operating in Tamil Nadu alone. The sparse public transport in various regions of South India is fueling the demand for three-wheeler auto-rickshaws in this region. Furthermore, several government initiatives to boost the adoption of greener options such as electric three-wheelers are anticipated to emerge as another driving factor for the market growth.

Impact of COVID-19 on India Three-Wheeler Market

COVID-19 pandemic has ravaged the three-wheeler market in India, thereby, stunting its growth. Following a peak in domestic sales of over 7 lakhs in FY19, the Indian three-wheeler market faced significant obstacles. In FY21, sales amounted to only 2,16 lakh units, an incredibly steep fall from its peak. As the government imposed strict lockdown restrictions to mitigate the spread of the virus, the manufacturing operations of three-wheeler vehicles came to a standstill due to the shortage of workforce. The demand for these vehicles also witnessed a significant drop due to restricted mobility during the lockdown period and the declining purchasing power of the consumers. The demand for passenger vehicles is projected to remain slow in the post-COVID-19 period due to the growth of the work-from-home culture. However, load carrier vehicles may witness an increase in demand due to Indias thriving e-commerce sector.

Competitive Landscape

The leading players in the India three-wheeler market are Bajaj Auto Limited, Piaggio Vehicles Pvt. Ltd., Mahindra & Mahindra Ltd., Atul Auto Limited, TVS Motor Company Limited, Saera Electric Auto Pvt. Ltd, Lohia Auto Industries, Scooters India Limited, JS Auto, Force Motors Ltd., and other prominent players.

The market is dominated by automobile giants such as Bajaj Auto Ltd. M&M, Force Motors, etc. Among these leading players, Bajaj rules over the market as the worlds largest auto rickshaw manufacturer. Commercial and passenger vehicle manufacturers come up with a variety of three-wheelers with different body styles to capture more market share. Furthermore, the adoption of competitive strategies, such as partnerships, mergers, acquisitions, and joint ventures is also prominent in this market.