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By qualification Muhammad Sabir Shaikh is a lawyer, albeit a non-practising one. By trade he is a progressive assembler-cum-manufacturer of motorcycles. He did his LLB from SM Law College Karachi but he has been associated with the two-wheelers over the years working as authorized agents for all major brands of motorcycles at the country's biggest motorcycle market, Akbar Road Karachi. He is currently the vice chairman of FPCCI's Standing Committee on Small Traders and Cottage Industry and is the chairman of Pakistan Motorcycle Association. He was also the ex-president of Karachi Motorcycle Dealers Association for many years. He is the chief executive of Sitara Auto Impex which has technical collaboration agreement with the Chongqing Guangjie Motorcycle Industries (Group) of China to assemble and manufacture Guangta brand motorcycles in Pakistan.

By Syed M. Aslam
April 15 - 21, 2002

PAGE: What prompted you to turn to motorcycle assembling?

Sabir Shaikh: While working as authorized agent for all major locally produced brands over the years I realized that rising motorcycle prices were driving the potential buyers away from the market. This in turn was translating into decreasing sales and at times the things were so bad that it was hard even to meet the running expenses not to mention profitability because dealers usually work strictly on commission only when they sell. That made me realize that the prices of locally assembled motorcycles amidst the protection accorded to it from imports vide prohibitive duties is the primarily reason for the downturn. I also realized that under such circumstances the prices would keep on increasing to have an adverse effect on the business due to shrinking purchasing power.

PAGE: When you started assembling Guangta brand of motorcycle?

Sabir Shaikh: We started commercial production in September last year at our plant in SITE area on Super Highway near Sohrab Goth Karachi. At present we are manufacturing a single model, GT 70 and hopes to produce a number of other models in near future. In last six months we have produced and sold some 200 directly or through a number of dealers nationwide. Another 200 units are under assembly.

PAGE: Do you have an approved deletion plan?

Sabir Shaikh: We have applied for the approval of deletion plan to the Engineering Development Board, Ministry of Industries and Production and are still waiting. Meanwhile we are already using 80 per cent local contents, the minimum localization criterion set by the Board. However, we have to pay an additional 10 per cent import duty, 30 per cent instead of 20 per cent to six other approved manufacturers, on CKDs and parts imported from our partner in China. We are not alone, three other Karachi-based assemblers are also waiting for the approval of their deletion plans. Between the four of us we are producing some 500 motorcycles every month and our brands retail at half the retail price of major producers the prices of whose products range between Rs 70,000 to Rs 80,000.

PAGE: What approval of deletion plan means to you?

Sabir Shaikh: It not only means paying less import duty for us but its implications are far more wider. We feel that access to affordable personal transportation is a kind of basic human right. We are confident to meet all the pre-requisites required for the approval of our deletion plan. A timely approval will send right signal to encourage investment in this sector, boost government's policy of encouraging small and medium entrepreneurship, develop economies of scale which in turn will help create direct and indirect employment. The competition will keep prices competitive and the government will be earn a substantial revenue.

PAGE: What is your marketing strategy?

Sabir Shaikh: My years of association with the two-wheelers show that continuously increasing prices and declining purchasing power is taking a heavy toll on the sales of two-wheelers. We basically aim to cater to buyers who can afford to buy used motorcycles by retailing a new product which suits their budgets. As is, sales of used motorcycles outnumbers that of the new ones by three to one. Some 300,000 used motorcycles are traded in the country each year compared to about 100,000 new ones. It is this segment of the buyers that we want to aim our affordably priced products to. The fact is we are not competing with the major manufacturers who already enjoy a big chunk of the new motorcycle market. We are rather competing in the used motorcycle segment of the market.

PAGE: What is your biggest market?

Sabir Shaikh: We are based in Karachi and that should have been our biggest market. However, the Motor Vehicle Wing of the Excise and Taxation Department Sindh is refusing to issue licenses to our newly introduced low-priced product although its counterpart in Punjab has no such qualms. We are unable to understand the different approach of the two provincial departments and thus despite being based here Punjab has emerged as our major market. I must mention that we are paying all duties and taxes and are ready to provide all guarantees and assurances to match the quality standard of approved manufacturers.