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High-end imported bicycles to cost more
Posted on 25 May 20124,155 Views Comments
Importers to pass on the increased cost caused due to weakening rupee to consumers
Imported bikes will now cost more with importers deciding to pass on the increased cost caused by continuous weakening of rupee against US dollar to the customers.
"There is no option left with us except to raise prices of imported bicycles in the wake of sharp fluctuation in currency and we expect price of imported bicycles will go up by 5 per cent in next 10-15 days," said, Rohit Kalra, MD,LA Sovereign.
LA Sovereign Bicycles is one of the largest importers of bicycles from Taiwan, China and Thailand and it annually imports 70,000 units of bicycles having price range of Rs 3,500 to Rs 50,000 a unit.
The company has already increased bicycle rates by 15 per cent since March this year because of depreciation of Indian currency against US dollar. "There is so much uncertainty in currency that it is very difficult to plan our pricing now," he rued. Rupee continued to weaken against greenback as today it went down below the level of Rs 56.
There are several companies located in Ludhiana which are importing high end aluminum or carbon based bicycles from China and Taiwan. Besides, several bicycle components like basket, spoke, hub-cup, carrier, steel balls, handle bolt, brakes are also being imported from China.
Notably, some of Indian bicycle makers and exporters have even set up their shops in China to import bicycle and parts as Chinese bicycles are 15-20 per cent cheaper than bicycles manufactured here.
Country's annual import of bicycles from China surged from Rs 300 crore in 2008-09 to Rs 1,600 crore till last fiscal, as per bicycle manufacturers.
Bicycle manufacturers feared if currency fluctuation is not controlled soon, the demand for imported bicycles would shrink, which would be detrimental to the overall growth of the industry.
"The demand for high-end bicycles will certainly be hit because of fall in rupee. Moreover, the imported bicycle items which are used in assembly of bicycle here will also raise the cost of a bicycle," said Engineering Export Promotion Council, Bicycle panel Convener, Satish Dhanda.
Finance Minister Pranab Mukherjee while presenting the Budget 2012-13 had proposed to enhance basic custom duty on bicycles from 10 per cent to 30 per cent and on bicycle parts from 10 per cent to 20 per cent on the request of local bicycle makers who demanded protection from cheap Chinese import.
Ludhiana caters to country's over 90 per cent bicycle and bicycle parts requirements and it houses prominent bicycle brands such as Hero Cycles and Avon Cycles.
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