Citing loss of profitability in the aftermath of demonetisation, cycling giant Hero Cycles pulled out of the coveted Cycle and Fitness Outdoor Sports Expo (CFOSE) cycle exhibition.
The exhibition attracts domestic players and leading cycle manufacturers from China, Japan and Taiwan, among others, every year. The domestic cycle industry suffered huge losses post the note ban by the union government and following a shortfall in demand for fresh orders, manufacturers were forced to curtail their production volume by 50 percent.
The Hero group’s chairman and managing director, Pankaj Munjal, had acknowledged in the last week of November 2016 that the company witnessed dip in sales up to 30 percent.
SK Rai, managing director, Hero Cycles Ltd, said, “We have compressed costs wherever we can post demonetisation and there has been loss of profitability. Since, fiscal year end is coming, now we have corporate obligations to fulfil so parent body decided not to participate in the exhibition this year.”
The owner of another cycle giant president of TI Cycles, Arun Alagappan, without divulging the actual reason to pull out from the exhibition, said, “We have just participated in a cycle exhibition in Chennai so this year we would not be part of the CFOSE.”
However, he denied that decision to pull out from the expo was driven by decline in profits.
The Asia’s largest cycle manufacturers’ association United Cycle Parts and Manufacturers’ Association (UCPMA), along with other cycle associations, conducts this exhibition every year.
Charanjit Singh Vishivkarma, president of UCPMA, said, “The reason of big brands pulling out from the exhibition this year could directly be attributed to their profit prospects. They no longer believe that participating in the exhibition will add to their business.”
He said the CFOSE will commence on March 3. The technology transfer will be the main focus of this exhibition while international players who manufacture cycle parts, which are already made in the domestic industry, will not be a part of the expo. It will assist the Indian manufacturers in keeping abreast with latest technological trends in the bicycle industry.