The two-wheeler manufacturers have overhauled the profit margins of the four-wheel Original Equipment Manufacturers by a considerable amount and thus making the motorcycle and scooter markets more attractive for local and foreign investors.
The automotive industry has had tremendous growth in the last few years and India is one the leading emerging markets in the world. It’s a highly preferred destination for exports as far as two-wheeler sector is concerned as well as many foreign companies invested huge sum lately.
The improvement is evident as analysts have predicted that India ultimately has the potential to overtake Brazil, Germany and even Japan by 2030 and becoming the third largest car market in the world while the luxury car market is likely to double in size by the end of this decade.
Courtesy of Business Standard, the above calculative graph has included the top marques in the country like Maruti Suzuki, Hyundai Motors India Limited, Mahindra and Mahindra, Toyota Kirloskar Motor, Ford India and Honda Cars India.
The top-notch two-wheeler brands listed are Hero MotoCorp, Bajaj Auto, Either Motors (owners of Royal Enfield), TVS Motors and Honda Motorcycle and Scooters India.
The other huge reason for profit difference comes from the debts each of them possesses. The major two-wheeler manufacturers are understood to have kept the debts under control while maintaining a healthy and unshakable balance sheet.
On contrary, the four wheeler companies have had huge debts due to soaring investment levels in setting up factories that include assembly lines, body shops and many other divisions consuming labour and acres of space.
The money going into developing a new product is also high as the research, testing and improvisation involved are understandably at the peak unlike in the two-wheeler sector which needs less expenses comparatively.
Seeing from the analysis, it appears that Maruti Suzuki is the only four-wheeler brand to have strong finance while several auto makers are recently hit with the gruesome taxes like Excise Duty Central Sales Tax (CST), R&D Cess Education, Cess Value Added Tax (VAT), etc.
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