Despite lagging behind traditional Japanese manufacturers the non-traditional Chinese manufacturers are steadily increasing their share in the overall production of two-wheelers in the country.

Mar 19 - 25, 2007

Pakistani motorcycle industry never has it so good. In fiscal 2005-06, a total of 751,667 two-wheelers were produced in the country, a level which was never imagined possible just a few years ago when overall production hovered around 100,000 units. Presently, there are around 44 motorcycle manufacturers in the country, including the three traditional Japanese producers - Honda, Yamaha and Suzuki.

Of the total 751,667 two-wheelers produced in fiscal 2005-06, 451,949 units were produced by the three traditional producers while the remaining 299,718 units were produced by over three dozen non-traditional Chinese manufacturers.

During the first four months of the current fiscal ended October 31, 2006, a total of 42 assemblers produced a total of 254,780 motorcycles. Honda enhanced its production capacity by 25 per cent, or 100,000 units, to 500,000 units. Yamaha also enhanced its capacity from 80,000 to 120,000 units.

Capacity increased by 30 per cent to 1,549,000 units from 1,187,000 units by end 2005-06.

In all the traditional assemblers produced 129,204 units while non-traditional assemblers produced the remaining 125,576 units. The share of the non-traditional assemblers in the overall production was 51 per cent while that of traditional manufacturers was 49 per cent- the two were almost at par.

It is easy to see that the non-traditional motorcycle assemblers are steadily increasing their share in the overall production. Analysis of the production data of all the motorcycle manufacturers operating in fiscal 2004-05, 2005-06 and first four months of the current fiscal year ended October 31, 2006 show that share of non-traditional Chinese manufacturers in the overall motorcycle production increased from 33 per cent in 2004-05 to 40 per cent in 2005-06. And during the first four months of the current fiscal ended October 31, 2006 they further managed to increase their share to 49 per cent.

Of the three traditional producers only Honda has managed to substantially increase its production from 287,291 units in 2004-05 to 360,561 units in 2005-06. Though Honda looks poised to remain the top motorcycle manufacturer in 2006-07, and beyond, to keep enjoying around 50 per cent of the total two-wheeler production in the country, figures show that it may produced less units this fiscal if it failed to improve its July-October 2006 production rate that showed it produced 105,000 units in the first four months of the current fiscal year ended October 31, 2006.

Statistics also show that production of other traditional manufacturer Yamaha increased marginally by less than 4 per cent from 71,580 units in fiscal 2004-05 to 74,423 units in fiscal 2005-06. Yamaha produced 17,499 units in July-October 2006 thereby indicating failure to increase production during the remaining eight months would mean a sharp decline over 2005-06.

Production figures also show that the third traditional assembler Suzuki produced 37 less units in 2005-06 over 2004-05- from 26,308 units compared to just 16,965 units during the comparative year. Suzuki produced a total of 6,705 units in July-October

Before we proceed further let us define the terms 'traditional' and 'non-traditional' mean for the purpose of clarity. The former is used to represent manufacturers who got engaged in the manufacture of internationally recognized Japanese two-wheelers in the country many years ago. It would not be unfair to give credit to these three traditional manufacturers - Honda, Yamaha and Suzuki - for laying the foundation of motorcycle industry in Pakistan . It, however, is also true that the three traditional manufacturers, Honda in particular because of its heavy domination of the market, over the time developed monopolistic tendencies due to protection allowed to them by discouraging imports through high duties. The official protection in the absence of real competition led the traditional manufacturers dictate their terms thereby turning the motorcycle market an absolute sellers' market.

The absence of competition made the traditional motorcycle manufacturers develop a habit of increasing the price at will and at the slightest weakening of the rupee but never reduced the prices even when there was a substantial appreciation in the value of Pakistani currency. The absence of competition and the resultant captive market led traditional motorcycle manufacturers make fabulous profits by pushing retail prices to absolutely unaffordable levels beyond the reach of middle and low-income segments of society.

With the deregulation of the motorcycle industry a few years ago by the present government a new breed of motorcycle assemblers emerged which got engaged in local manufacture of bikes' complete knock-down (CKD) kits for whose assembly were imported from China. The new breed of assemblers prefer to use Chinese CKDs because it was much more cheaper and also because the traditional manufacturers were, and still are, using Chinese parts because they are nearly as good but much less costly than Japanese parts. These new breed of manufacturers using Chinese CKDs, parts and accessories are called 'non-traditional or Chinese' manufacturers.

Despite lagging behind traditional Japanese manufacturers the non-traditional Chinese manufacturers are steadily increasing their share in the overall production of two-wheelers in the country.


In the fiscal 2004-05, a total of 570,706 motorcycles were produced in the country, of which 451,949 or 60 per cent were assembled by the three traditional Japanese manufacturers. The remaining 299,718 units were assembled by 22 non-traditional Chinese manufacturers whose collective share in overall production was 40 per cent. Another 14 approved assemblers did not commence production during the year.

The total installed production capacity stood at 1,007,000 units, of which 540,000 units came from traditional assemblers- Honda 400,000, Yamaha 80,000 and Suzuki 60,000. The remaining 467,000 units came from the remaining 22 non-traditional assemblers. This shows that just 56 per cent of the production capacity was overall utilized, i.e a huge 44 per cent under-utilization of the overall production capacity.

Fourteen approved non-traditional assemblers had not commenced production in 2004-05.

Fourteen approved assemblers, all non-traditional, commenced operation during the year, pushing the total number of manufacturers to 39 and overall production capacity from 1,007,000 units in fiscal 2004-05 to 1,187,000 units in 2005-06 - an increase of 180,000 units.

A total of 751,667 two-wheelers were produced - 451,949 units by the traditional and the remaining 299,718 units by the non-traditional assemblers. Thus 60 per cent of all the two-wheelers were produced by the traditional assemblers while 40 per cent were produced by the non-traditional assemblers. Total capacity utilization was 63.5 per cent that depicted an improvement of 7.5 per cent over 2004-05.