Bajaj Auto new leader in 3W goods carriers, M&M with 16% eats into Piaggio share

The boom in e-commerce and last-mile deliveries is having a positive impact on demand for goods-carrying three-wheelers, particularly those needed for urban operations. Easily manoeuvrable, they can navigate tight roads and also enter locations where four-wheelers would fear to tread. It also helps that the newer models of three-wheelers are designed and/or customised to handle such duties. And the demand is coming from logistics operators too.

Of course, total sales of these good-carriers – 85,915 units – in the April-October 2021 period is half that compared to passenger-carrying three-wheelers (41,280 units) , which are back to transporting people in a manner similar to pre-Covid days.

Bajaj Auto the new goods carrier boss
Look solely at the good-carrier three-wheeler industry sales data and there are some interesting takeaways when it comes to market share. The big news is that Bajaj Auto, which is the leader in the passenger three-wheeler segment with a 72% market share, is now the No. 1 in goods carriers.

With sales of 16,161 Maximas in the first seven months of FY2021 (up 26%) and 26% YoY growth (April-October 2020: 12,767), Bajaj has 39% of the market, growing by four percentage points. In the process, it has topped erstwhile leader Piaggio, which is now relegated to second place.

The market shift to cheaper CNG from expensive diesel is seen in the fuel-wise split for the Bajaj Maxima. Its CNG model has seen 250% growth to 6,671 units (from 1,904 units a year ago) and a decline of 12.63% of the diesel variant to 9.490 units (from 10,863 units a year ago).

Diving diesel demand hits Piaggio, which rolls out CNG and, electric models
It’s the same trend with Italian OEM Piaggio but the erstwhile market leader, whose sales mainly come from diesel-engined models, has witnessed a tough April-October 2021. The sales and market share data table below reveals that it has seen a considerable sales decline – down 25% to 13,351 units from 17,830 units a year ago. This resultantly has had an impact on market share which has fallen sharply by 17 percentage points to 32.34% from 49.46% in April-October 2020.

A close look at the fuel-wise variant split reveals that the fast shift from diesel-engined models to CNG and electric had dented Piaggio. The company sold a total of 7,708 diesel three-wheelers in April-October 2021, down 55% YoY (April-October 2020: 17,386). Nonethless, Piaggio is taking rearguard action to protect its turf – it has made the shift to CNG and electric power, a move which has already begun to pay off. The company sold 2,750 CNG units, up 519% YoY (April-October 2020: 444 units), 1,686 electric three-wheelers, which it has launched this fiscal, and also 1,207 petrol variants. Piaggio is extremely bullish on its electric model and has been speedily setting up EV showrooms across the country and in key markets like Bihar.  

Mahindra Alfa on a roll, Treo Zor shows punch
Making the most of this is the new No. 3 player – Mahindra & Mahindra. M&M, which had sold 735 units in April-October 2020, has registered a sterling performance a year later – 6,613 units, which constitutes 800% YoY growth, albeit on a small year-ago base. M&M has two models in the fray – the diesel-engined Alfa and the electric Treo. Surprisingly, despite riding on diesel power, the Alfa has notched handsome growth – 5,064 units, which marks 600% YoY growth – while the cargo-carrying Treo Zor has sold 1,549 units, up 12808% albeit on a minuscule year-ago base.

Growth outlook
The data table below offers plenty of cues to where the three-wheeler goods carrier market is headed. Having posted 14.50% YoY growth in the first seven months of FY2022, things can only get better for this segment. Furthermore, with recent surveys showing that retail demand for FMCG and other consumables from rural India keeping pace with urban demand, three-wheeler OEMs should expect even more business to come their way from e-commerce, logistics and last-mile delivery operators.  

When it comes to the choice of fuel, the writing on the wall is clear. Even though petrol and diesel prices have remained unchanged since November 4, following the Central excise duty cut, paying Rs 94.14 a litre for diesel or Rs 109.98 for petrol is a wallet-burning proposition for three-wheeler operators, many of whom are single-vehicle owners. Thus, it comes as no surprise that diesel vehicle sales are down by 23% while those of CNG are up 345% albeit on a low base. Likewise for electric three-wheelers.

As compared to diesel and petrol, the operational economics of CNG and electric power are far more favourable when it comes to total cost of ownership – the mantra of the commercial vehicle operator. There’s, of course, the added benefit of cleaner and greener motoring but when it comes to delivering the goods profitably, CNG and electric is where this market is headed and OEMs are driving there too. Stay tuned in for more number crunching on this front.