Where does India stand in the second largest bicycle industry in the world?

No doubt, we are the second largest industry worldwide. But our share globally being as insignificant as 1%. I don't think we matter much in the world market in general. Our exports largely cater to the low end and these have a good measure of acceptability in terms of quality and price. We have a notable presence in many developing countries where the bicycle continues to be the only cheap and economic means of transportation compared to the world leaders China. However, we enjoy better brand equity. Many Chinese brands like Phoenix, Red Star, Diamond, in fact many more, have no distinctive attributes and are used by anybody, anywhere.

Uptill where do Avon's overseas operations extend to?

As I said, our markets are in the developing world and in many parts we are doing very well. For six years in a row, we continue to be the largest manufacturer exporters of bicycles and bicycle parts. We have regular shipments to nearly a hundred destinations across the African continent, the Middle East, South America, near and far East and some select ones in Europe. The Govt. of India recognize us as a 'Golden Trading House'.

Has Avon been feeling the pinch of rising steel prices or is it, like everybody else in the industry, passing it on the consumers?

Well yes; when costs begin to rise, everybody feels the pinch. As a company we do ensure that the impact on the consumer is minimal. The prices of steel have shown a phenomenal increase in recent months, calling for a substantial increase in our prices as well. But no; through efficiency measures we have managed to absorb best part of these, passing on only a modest component to the consumer. That's how we have learnt to survive in a highly competitive environment that the industry is.

The standard segment has been seeing a negative growth in the last fiscal. How has this affected Avon?

Industry wide data would appear to suggest so. But, by the grace of God, we have been growing in both, the standard as well as the non-standard, popularly known as the 'fancy segment'.

What steps are you taking to capture the imagination of the dwindling number of cycle buyers?

Mainly in two areas, First : the product. We are constantly engaged in its update. Within the country we worked through a network of some 1,500 select and committed main dealers. Their regular feedback and valuable suggestions make them all a part of the development process. 'Aap ne sujhaayi, hum ne bunaayi' or 'we made it exactly as you wished us to' has been at the core of our policy in this regard. It has given us a tremendous measure of success. Second is the promotional part. We advocate a pro-active approach. We take our message to sectors where the ultimate potential for growth comes from. School children for instance are a very relevant group for the dissemination and propagation of the cycling concept.

Why has there been a perceptible fall in cycle buyers in the country?

Last year the Union Budget brought in Central Excise of 4% on bicycles and bicycle parts. Following representations, the Finance Minister removed the duty on parts but retained it on bicycles. About the same time, prices of steel, which is our major raw material, were also looking up. The combined cost-push effect led to an increase of 8 per cent to 10 per cent in the prices of bicycles. The increase, largest in a decade, proved heavy on the pocket of our rural buyer. Thus, demand for the standard bike fell. The industry had to wait for a full year before the excise levy was taken off bicycles in Budget 2003.

Is Avon planning any new products or diversification?

Consumer aspirations are fast changing. Maintenance of product line sensitivity has contributed substantially to our impressive growth over the past couple of years despite dull conditions all round. Several new models with a fresh look and upgraded performance features are lined up for the coming months.