The decline in export orders for bicycles has hit Ludhiana?s cycle industry, which produces 90% of the total cycle manufactured in the country, with a number of small-scale units downing shutters in recent months.

The fall in demand could be gauged from the fact that in 2007-08, bicycle exports stood at Rs 746 crore, against exports of Rs 807 crore in 2006-07. In year 2008-09, the exports fell to Rs 550 crore. As direct fallout of the fall in demand, the industry has been forced to run factories at 75% capacity.

The United Cycle Parts and Manufacturers Association (UCPMA) has expressed its concern to the ministry of foreign trade demanding that cycle and cycle components be considered under the Focus Product Scheme of the foreign trade policy and be given 6.25% export incentive.

At present the cycles and cycle products sold in the international market are getting 1.25-2.5% incentive.

It is not just that export orders have dried up, the domestic market for cycles, too, has shrunk considerably and sales have shown a sharp drop in recent months, say cycle manufacturers.

Charanjit Singh Vishivkarma, president, UCPMA, says that the cycle industry employs 3.5 lakh workers whose future would be at stake if the government fails to act. He said that since cycle is categorised under the engineering industry, Khadi and Village Industries Commission help is not available.

Little doubt that welfare schemes of the ministry of rural development and Panchayati Raj and other subsidies are also not available to the small and unorganised bicycle industry.

He said the India?s share to the world cycle exports has come down to less than 1%, whereas China, the nation with the largest fleet of bicycles in the world, has become the biggest contributor with consistent support from the government.

Against this backdrop, cycle manufacturers are trying their best to prop us sales. ?The good news is,? says Onkar Singh Pahwa, managing director of Avon Cycles, ?steel prices, which were in the range of Rs 45 a kg few months back, have come down to less than half. Implying reduction in the cost of manufacturing cycles.?

Manufacturers are trying to pass on the benefit to consumers by reducing bicycle prices by 3% to spur the demand. There are many interesting offers as well.

The industry has also come up with offers for dealers to push their brands. Hero, Avon and Atlas are offering gifts and cash discount on different models of bicycles.

This is in sharp contrast to the trend earlier when cycle manufacturers hiked the prices by a minimum of Rs 350 per unit during January to September 2008.

Slippery track

•In year 2008-09, the exports fell to Rs 550 crore

•In 2007-08, bicycle exports stood at Rs 746 crore, against exports of Rs 807 crore in 2006-07

•The industry has been forced to run factories at 75% capacity due fall in demand

•It is not just that export orders have dried up, the domestic market for cycles has shrunk considerably