Asian two-wheeler market thrives on competing strategies
Home to over 4.5bn people, Asia is where more than 90% of worldwide two-wheeler sales occur. The giants of the Asian two-wheeler market are, not surprisingly, India and China, the two most populous countries. The rivalry emerging from the new mobility demands and strategies of these two countries are the pillars of the two-wheeler market of the region.
The most recent report of IDTechEx provides a clear view of the Asian two-wheeler market:
- Few regulations and low prices make two-wheelers the best solution for urban mobility.
- Top buyers of Chinese and Indian two-wheelers are in Africa, APAC, Latam, the Middle East, and Europe.
- Vietnam and India to take the lead in sales as the Chinese market saturates faster.
- Indonesia, Thailand, the Philippines, and Vietnam represent over 90% of the two-wheeler sales in Southeast Asia.
- Vietnam is the leader in adapting electric two-wheelers, as their share in the local market reached 10% in 2021. By 2043, sales of electric two-wheelers in Vietnam are expected to reach around 9 million.
- Most electric two-wheelers sold are low-power e-scooters, offering remarkably lower total ownership costs than ICE counterparts. In time, model variety and quality are expected to increase as the number of manufacturers and competition also increase.
The grand rivalry: India vs China
The characteristics of the Indian and the Chinese two-wheeler markets are crucial for many reasons:
- Boosting environmental goals in two highly industrialized countries,
- Solving the massive congestion problem in major cities like Shanghai and New Delhi,
- Enabling billions to access new mobility solutions and boosting electrification in the region,
- Strengthening the road network and expanding charging infrastructure, especially in rural areas,
- Providing jobs to millions as manufacturing capacity and export increase.
Under this roadmap, the rivalry is quite fierce between India and China, as the lead in the global two-wheeler market changed hands in the last five-year period:
In 2017, India produced 19.9m two-wheelers and surpassed China, which remained at 14.3m. On the other hand, China remained the top exporter of two-wheelers, shipping 6.6m units in 2017, compared to India’s 2.3m units.
These numbers depict the two countries’ strategies, as while India focuses on the local market, China has become a leading exporter in the two-wheeler market. In the 2021-2022 period, the balances changed again following the pandemic, with two countries displaying a much higher capacity in manufacturing and exports:
- According to Statista, two-wheeler sales peaked in 2019 with around 21m units and saw a slight decline in 2022, amounting to 13.47m units.
- The number of electric two-wheelers sold reached 600,000 in 2022, grabbing 4% of the local EV market.
- The exports faced a decline during the pandemic, ending up with India exporting 4.4m two-wheelers in 2022.
- In 2022, EVs sold in India surpassed one million, the electric two-wheeler market witnessing an impressive 291% growth and ending with around 670,000 unit sales.
- Statista forecasts 8.2m electric two-wheeler sales by 2030 out of 21m.
- In 2021, sales of two-wheelers in China saw a slight decline and amounted to around 41m, reaching approximately 45m units in 2022.
- The same year, China exported almost 23m electric two-wheelers, resulting in $5.28bn revenue, says Research & Markets.
- According to Chinamotorworld, the top export destinations of China are North America, Europe, Asia, and Latam respectively.
Strategies and predictions
As mentioned, India prioritizes strengthening the local road network and easing access to new mobility options while pursuing decarbonization goals through e-mobility.
Government spending flourished in 2017, following the Automotive Mission Plan (AMP) 2016-26, focusing on infrastructure development in rural areas. As the share of women drivers also spiked in recent years - Honda’s women drivers reached 35% in 2017 - India’s other goals emerged as supporting local manufacturers and the employment market. India has already spent $280 million on crash-test and quality centers, aiming to generate $300 bn by 2026. IDTechEx report predicts that models lower than 4 kW of power will dominate the sales as the battery prices go down and battery swapping stations increase.
China set national technical standards in 2019, pushing sales and stabilizing the growth of the two-wheeler market. IDTechEx report estimates that the uptake of Li-ion batteries will reach over 90% by 2040, driving EV penetration in the local market.
China’s biggest advantage is its position as a global exporter of two-wheelers. According to Research Markets, the number of countries China exported electric two-wheelers reached 193, including various countries on several continents. The US, the Netherlands, Canada, Germany, and France were top export destinations. The US represented 41.1% of the total exports, generating $1.52 for China.
As the leader in electric passenger car exports, China has already sealed the leadership in electric two-wheeler exports too.