Ludhiana's small-scale bicycle sector presents a depressing picture, radically different from that thrown up by cycle majors such as Hero Cycles Ltd, which have been coming out with new bicycle models and showcasing their products online to buyers worldwide to meet the challenges of the WTO. The unorganised sector, on the other hand, reached saturation point a few years ago. This sector consists mostly of small scale industries (SSIs).

The SSIs need considerable resources to survive the onslaught of cheap bicycles from China. Though industry watchers say the competition will make the local markets more competent, the SSIs fear they will be wiped out once these cheap cycles are allowed freely into the domestic market.

A major chunk of Ludhiana's cycles and cycle parts have been traditionally exported to Europe and West Asia. But over the years, the manufacturers have seen a steep fall in demand in both the international and domestic markets. They fear the Chinese cycles may be the last straw for them.

"The cycle SSIs stand no chance against the foreign cycle-makers, who get their steel, alloy and other raw materials much cheaper than we get them here," says Mr Balwant Rai, a local cycle parts maker. "Our raw materials come from outside the state and that makes them costlier," he says.

"The cycle parts industry has reached a saturation point in Ludhiana," says Mr Iqbal Singh, president, Cycle-parts Wholesale Dealers' Association. "Labourers who used to work overtime once now find there is no work for them. Retrenchment is rampant. There is a complete recession here," he says.

Cycle industry insiders say that Chinese bicycles have already entered the domestic market. "Chinese cycles are being sold for Rs 850, which is much cheaper than our domestic products, which are priced at Rs 1,200. If these bicycles enter the local market commercially, it will wipe out the manufacturers here. No one here can afford to cut prices down to that level," they say. Nevertheless, cycle entrepreneurs who are aware of the emerging global challenge are leveraging and upgrading their units. They are going for value-additions and instituting cost-cutting measures. They have set up websites that have enabled them to reach out to markets around the globe.

Taking a lead in this direction is Ludhiana's largest cycle body, the United Cycle and Cycle Parts Manufacturers' Association (UCCPMA), which has over 1,500 members. UCCPMA is organising a virtual exhibition on the Internet as part of its upgradation mission. "Indiamarket.com is organising this exhibition for us on March 1-31, displaying our top products for foreign, online buyers," says UCCPMA president D S Chawla. "We are providing this leverage exercise to our members. This is the first time any association has done this for its members. The online exhibition will also feature a virtual buyer-seller meet," he says.

Ironically, Ludhiana's cycle parts industry topped the exports chart list of Concor, a major dry port in the city, recording over 49 per cent of the export consignment share. "This share is high because hosiery constituted just 15 per cent of all export consignments," says Mr Manjhukha, general manager, Concor.

The Wall Street Journal