Increasing sales of petrol-driven two-wheelers may not help India's oil industry to be the pillar of growth. India's growth story requires more fuel-guzzling cars, like in China, for oil market to surge ahead of that country.
India's petrol consumption grew 12.6 percent in the first six months of 2016, double than China. Yet on a daily basis, China's 2.8 million barrels per day of petrol consumption a day was way ahead of India's 5,44,000 bpd, said a Reuters report.
On Tuesday, petroleum ministry data noted that the growth in India's petrol consumption was basically driven by strong yearly growth of 6.3 percent and 9.7 percent of passenger vehicle and two-wheeler segment, respectively.
In terms of numbers, India's two-wheeler companies sold 16.5 million units in 2015-16 as against China's 24.6 million in 2015. India, the world's second largest moped market, will soon catch up with the world's first â€” China. However, fuel consumed by bikes and scooters may not provide enough thrust for the oil industry, noted Reuters.
Indians prefers scooters over cars, given their relatively low price, easy commute through traffic and ill-maintained roads. However, the crucial factor remains its fuel efficiency. With newer models of scooters getting efficient, providing more mileage, they offer twice as much more mileage than a new car.
Newer motorbikes offer 100 km of ride with just 2.6 litres of petrol, while older ones for 5.6 litres. Since they are better as compared to a car's mileage, they have contributed to lower car sales in India. Since 2010, car sales have lurked below 3 million units a year, while during the same time monthly sales has remained at about 2,15,000 units.
India's economic growth, alongside pushing income level of young Indians by 8 to 9 percent over five years, is also throwing up financing options that are increasingly attractive for the two-wheeler buyer. With India's average salary at around $ 2,400 (Rs. 1.60 lakh) a year, and a small two-wheeler priced between Rs. 25,000 and Rs. 50,000 ($350 to $750), the country's preference for the moped market remains obvious.
In comparison, average annual salary in China is around $9,000 (Rs. 6.01 lakh), and entry-level cars are priced at $12,000 (Rs. 8 lakh) upwards.