There is a boom happening in India’s automobile sector, and no, we are not talking about SUVs or some fancy bikes. It’s the three-wheeler (3W) segment that is garnering all the attention for the right reasons.
Sales of 3W increased by 20 per cent last month, according to the Federation of Automobile Dealers Association (FADA) based on dealer sales, while Society of Indian Automobile Manufacturers (SIAM) quoted shipped units to note that 3W posted their highest-ever sales in May, surpassing the record of 2018, at nearly 56,000 vehicles.
Just a few weeks ago, India had jolted the world of auto when it pipped China to become the world’s biggest market for electric 3W, with sales of 5.8 lakh units last year.
These fabulous numbers come even as passenger vehicle sales have declined, while other ‘glamour’ categories like two-wheelers are registering moderate growth — passenger car sales fell by 1 per cent and tractors by 1 per cent compared to May last year, while the drop was 6.6 per cent for two-wheelers and 8 per cent for commercial vehicles compared to the previous month (both did register a year-on-year growth, though).
What is happening, and when did the lowly 3W get sexed up?
“Lot of people focus on what is more sexy, a two-wheeler, and then maybe a four-wheeler, but actually it is the 3W that is selling more,” quipped Prtitesh Talwar, president of Lectrix EV, a company that makes electric scooters and EV battery solutions. “It is also enabling a lot of upward mobility,” he added.
Rajesh Menon, director-general of SIAM, attributes it to the curious economic and behavioural shift witnessed since the pandemic. “Growth in 3W sales lagged post-Covid (but) presently the rural economy is also recovering, resulting in better off-take of 3W. Financing of 3Ws have also become comparatively easier, enabling consumers to avail loans for 3Ws,” he said.
However, that is not all. Three-wheelers are now the go-to for post-Covid last mile connectivity to metro stations and bus terminals, as more and more students and private sector executives return to office after years of work from home.
More recently, the surge seen in quick commerce and food delivery platforms also spurred three-wheeler sales, with many of them using them for transporting their merchandise and bulk orders.
Economics has been a key factor. For example, before Covid, leading taxi aggregators like Uber had ‘ride sharing’ options which let more than one commuter in a taxi at the same time, giving cost-effective options.
However, the nature of the infectious disease meant that option was as good as gone, with top aggregators turning to options like three-wheeler and two-wheeler taxis.
Saurav Kumar, partner with the leading law firm IndusLaw, explained how economics favoured the 3W boom. “Three-wheelers in the country are high-running vehicles, at a low entry price point, required to run for short distance or last-mile operations largely. Coupled with the ability to charge at home, Electric 3Ws are also proving to be more convenient for drivers. The lack of range anxiety and low acquisition cost overcomes two major barriers to EV adoption, making three-wheelers key candidates for electrification, even more than two-wheelers!”
The 3W boom looks set to continue for the time being. An analysis by CRISIL Ratings in early summer pinned the three-wheeler growth this financial year at up to 17 per cent, to a new all-time high of 7.8 lakh units. And though exports of 3W may suffer, it seems it will be more than made up by the demand in the domestic market.
New use cases will evolve for 3-wheeled vehicles, in newer formats, not necessarily limited to “autorickshaws”, feels Amitabh Saran, member, IET Future of Mobility and Transport, pointing to how electric 3Ws used in e-commerce delivery have replaced small cargo vans running on diesel.
“That was an entirely new market which evolved through electrics,” he pointed out.
