CHINESE MOTORCYCLES

S.KAMAL HAYDER KAZMI,
(feedback@pgeconomist.com)
Research Analyst
, PAGE
Jan 17 - 23, 2011

Motorcycle is a main means of private transportation in many parts of the world. Due to its size and complicated maneuvers, however, it is often neglected by engineers or planners in the planning and management of urban streets.

The development of China as the major player in the global motorcycle industry has been achieved by linking its strong domestic demand to the abundance of low technology dependent manufacturing or cloning.

Pakistan is the only country where there has been no follow up strict checking on the quality by the government on the products after they come out from the factories in the markets and some low-priced Chinese cum Pakistani motorcycles also fall in the same category.

Currently, there are hardly three Chinese cum Pakistani bikes, which enjoy large sales because of brand name and after sales value otherwise majority of the assemblers are just still rolling out their models in very low numbers just to stay in the market. Because they have invested millions of rupees on the projects for motorcycle assembling, if they close there business then they lose huge amount in shape of investment in the factories. Many after failing to survive because of their poor quality and high cost of production have packed up their business.

Despite achieving a towering success of producing 1.38 million bikes in 2009-2010 as compared to 917,628 bikes in 2008-09 (both Chinese and Japanese), no serious efforts have been made to maintain and check the quality.

However, the price of Chinese bikes has been not been increased the way the Japanese bike makers have been pushing up prices on the back of falling rupee value of the rupee against various currencies.

Consumers appear satisfied in purchasing good quality low priced motorcycles in different areas of the country from the different assemblers.

In Pakistan, usually a product is launched without any planning but after sales service and quality issues are literally ignored by the producers despite achieving volumes. The increase in volumes of sales of Chinese bikes does not mean that bike sales have swelled because of quality but actually, the low price as compared to Japanese bike Honda 70cc is the main reason.

Chinese bikes are not popular in rural areas because so many companies do not have after sales service all over Pakistan and also lack quality and durability as compared to Japanese bikes.

Growers usually purchase costly Japanese bikes before and after harvesting good crops, but they put any trust on Chinese bikes, as they need tough bikes to run at the dilapidated roads and passages in the rural and around crop producing areas.

Japanese bikes have attained a deletion level of 65-75 per cent while two leading companies claim to have been producing engine locally comprising of 60-75 per cent locally produced parts. However, Chinese bike makers did not agree with this.

IMPORT PAYMENTS BY TRANSPORT GROUP (THOUSAND US DOLLAR)

COMMODITY NOV 2009 OCT 2010 NOV 2010 JULY-NOV
2009-10 2010-11
C. Transport Group 96,044 141,799 118,539 446,715 633,432
Completely Built Unit (CBU) 5,661 6,771 6,562 32,716 39,095
Motorcycles 97 96 94 306 824
Completely Knocked Down (CKD) 49,837 65,883 57,021 220,002 294,406
Motorcycles 4,077 6,551 8,833 31,540 40,073
Parts 6,362 11,041 16,726 28,851 63,919

Many customers feel that if they could run the Chinese bike for four to five years without any problem, then they would be happy enough. However, these low priced bikes cannot be used roughly as compared to Japanese bikes. Many customers, having cash problems, try to maintain bike by continuously spending money on its maintenance or removing the problem while others after losing hope switch over to used Honda CD 70 or try other Chinese brands.

Contrary to the after sale and quality problems faced by the customers after purchasing Chinese bike, one thing is certain that the entry of Chinese bike makers has opened new job venues besides expanding the vendors' base and investment in the country. One can say that bikes population sometimes look more than human and car population especially on the Karachi roads. Now a day, the minimum cost of Chinese 70cc motorcycle in Pakistan is Rs35000.

Chinese motorcycles are making inroads in the local market, though Japanese brand Honda recorded sales of over 438,028 units till May last fiscal year. Chinese motorcycle producers have cumulatively produced over 114,000 motorcycles. The local brands with the Chinese technology produced 514,000 units, including around 35,000 three wheelers. Although, the Japanese share has shrunk more than 50 per cent, while the local Chinese brands have a share of 48.5 per cent.

CONCLUSION

Everybody knows that China is seeking to become the most powerful economy in the world. The government of Pakistan especially Engineering Development Board, PSQCA, and FBR should initiate an enquiry over the falling quality of bikes and restrict issuing fresh assembly licences to the new entrants as over 60 bike makers are enough for the limited population if compared with China and India.