TWO WHEELER INDUSTRY GROWTH:  In world represents one of the largest two wheeler markets in the world with an estimated size of 5.4 million units a year. Two wheelers are used extensively in our country, both at rural and semi-urban level. Over the last five years the two wheeler market in India has grown at a CAGR of 10 percent and is projected to maintain this robust growth rate in the future as well. Motorcycle comprises approximately 78 percent of the two-wheeler market, with the remaining 22 percent being shared between scooters and mopeds.

India can be said to be the capital of Asia in respect of the two wheelers with an average of 27 two wheelers per thousand people compared to China's 8 two wheelers per thousand people (Source : World Bank). In terms of two wheeler production, India is the second (next to China) largest manufacturing industry in the world. Our two-wheeler segment has grown over 3 times the during past 10 years. During year 2002-2003 domestic sales was 5.1 million, in year 2003-2004 it was around 5.2-5.4 million.

The Indian two-wheeler market is oligopolistic (a small group of people having control of affairs) in nature with the top three companies accounting for over 80% of the total industry sales. Hero Honda Motors Limited, a joint venture between Honda Motors, Japan and the Indian-based Hero Group, is the largest manufacturer of two wheelers in the world with around 38% market share of the current domestic two wheeler market. Bajaj Auto is the second largest player in the two-wheeler market with 22.3 percent share. TVS motor company is the third largest manufacturer of two-wheeler with 20.9 percent of market share in India.