June 27 - July 3, 20

While spiking food prices, prohibitive electricity tariffs, and unabated rise in prices of petroleum products have conclusively wiped out the disposable income of majority of people, yet growing sale of two-wheelers seems to have defied the inflationary impact. Given the fact that bikes are the vital mode of transportation of inflation-hit masses, the upward trend was perhaps anticipated. The rural population contributed much in the growth of sales of motorcycles during the 11 months of current fiscal year (2010-11). That was somehow unusual in view of the flood devastations that reportedly affected five million persons mainly in rural areas.


Despite arrival of a number of Chinese brands of motorcycles in Pakistan, Japanese bikes continue to posses the major market share in the motorcycle industry. According to the figures by Pakistan Automotive Manufacturers Association (PAMA), Honda produced 517,577 motorcycle units in the 11 months of current fiscal year while it sold 517,163 units. In the comparable period last year, the leading market shareholder produced 438,028 motorcycles and sold 438,069, indicating 18 per cent rise equally in production and sale. Yamaha produced 104,952 and sold 104,252 motorcycles as compared to 113,288 production and 112,666 sale, undergoing 7.4 per cent decline both in production and sale. Suzuki recorded 16 per cent jump in production as its production rose to 19,069 in July-May 2010-11 from 16,465 units in July-May 2009-10. Its sale increased 19 per cent to 18,736 from 15,763. Shorab's production stood at 3,257 and sale at 3,531 units compared to 6,575 and 6,419 units respectively. Chinese Qingqi produced 2,682 and sold 2,592 motorcycles in July-May as compared to 2,207 production and 1,905 sale in the corresponding period last year. Hero, Ravi, and Habib produced 37,367, 24,524, and 19,248 units and sold 37,260, 24,562, and 19,385 units respectively.

The growth is not strange for many reasons, major being necessity that bikes have become for the low- and middle-income groups. Insufficient and inefficient public transport system also encourages people to buy bikes. Prices of bikes are not less than Rs30,000. Chinese motorcycles are price-competitive, yet they are yet to get hold of the major market shares enjoyed by their Japanese rivals at present. Informal financing of motorcycles by roadside dealers negates the impact of prices of both Japanese and Chinese brands. The dealers offer bikes of any brand for affordable upfront cash that sometimes is not more than Rs3,000. Monthly instalment also runs in a or two thousand rupees.


Chinese bikes assemblers have been in a tug of war with stalwart Japanese since the previous government allowed imports. The free market paved the way for low-priced bikes to challenge the monopoly of Japanese high-priced brands in the local market. The market leaders accuse Chinese assemblers of under-invoicing of imported components in connivance with the custom officials. The under-invoicing give them cost advantage over Japanese competitors who have to pass on constantly increasing cost of imported raw materials to the customers, said representatives of Honda Atlas and Pak Suzuki. Chinese assemblers retorted to this accusation in the media reports, saying Honda Atlas and their suppliers were misguiding the custom valuation department to maintain monopoly in the market.


The free market bode well for the engineering industry of Pakistan. Localization is on the rise, though manufacturing of precision components of bikes has yet to be industrialized. Due to lack of government support, local manufacturers mainly from small and medium sector are bootstrapping the production of engine and other sophisticated parts. The progress has at least started because of the rising demand of motorcycles. This should be made sustainable once policy actions are taken to capitalise on the developments and extend helping hands to manufacturers in the informal sector.

Over the years, the industry has reached to the production capacity that now it can export bikes to foreign countries. Around 15 countries including Afghanistan, US, UAE, Germany, UK, China, France, Saudi Arabia, Sudan, Bangladesh, India, Italy, Netherlands, Brazil, and Sri Lanka are top importers of motorcycles from Pakistan.

Pakistan's motorcycle industry is witnessing an exponential growth. According to an estimate, it is seeing a meteoritic double-digit growth per annum. From four local assembling plants in the beginning of this decade, motorcycle industry now boasts of more than 70 assemblers. The industrial growth has already caught the attention of international analysts. Motorcycle industry has already been acclaimed internationally as the fastest growing industry in Pakistan. The sale of motorcycles has been increasing both in urban and rural areas. But, villagers turned up rather hurried in replacing bicycles with motorcycles. Foreign investors are gravitated towards the industry and struck joint ventures with local vendors to introduce their brands in Pakistan. US-funded Competitiveness Support Fund had decided to develop competitiveness of Pakistan's motorcycle industry in the global market.

A senior official CSF said motorcycle industry was the mother of various industries as it drives their wheels. He underscored the reasons behind selection of motorcycle industry as a CSF project in an informative interview with BBC. A car has approximately 5,000 parts and subassemblies. Each job in an automobile assembling plant leads to the employment of 18 persons outside the automobile industry. In case of motorcycle industry, though this ratio is not 1:18, but definitely 1:12. This is a major attraction, he said. CSF's aim was to detect the hindrances removal of which could turbocharge the growth rate of the industry.

International competitiveness of motorcycle industry can be improved if industrial clusters are set up in all the major industrial zones in the country. These clusters will not only improve the standards of production and quality of local bikes but also develop the engineering sector, which is currently underdeveloped and has potential to increase its shares in national exports.