Motorcycle assemblers triple in a decade

KARACHI – The number of motorcycle assemblers has almost tripled in the country during the last decade as presently 72 registered companies are engaged in assembling of Chinese made two wheelers.
According to statistics issued by Motorcycle Assemblers Association of Pakistan (MAAP), presently 72 registered private companies are involved in the manufacture, import and assembling of motorcycles in major cities of the country.
“Over a decade back the number of assemblers was dismal but after the ending of the deletion programme by the government, the number of assemblers has jumped significantly,” said Sabir Shaikh, representative of the dealers and assemblers of motorcycles. The existing customs duty on import of CBU (Completely Built Unit) of two-wheelers stands at 65 percent while that on CKD (Completely Knocked Down) kits is 15 percent. Statistics further showed that during January-December 2010, the production of motorcycles stood at 1.5 million. It rose from 121,000 in January 2010 to 146,000 in December 2011.
The assembling companies are based in Karachi, Hyderabad, Gujranwala, Gujrat, Lahore and Hub. “The cost of production in Karachi is relatively high compared to that in Balochistan, Punjab and even in interior Sindh province where cheap labour is available,” said Shaikh. He asserted that least 50,000 direct and 150,000 indirect jobs are created by the business. “We can do more to attract business if the government announces uniformed duty for CKD and CBU kits,” he pointed out. The units are set up with an investment ranging Rs 30 to 40 million to a maximum depending on the real estate, the labour and other miscellaneous costs.
“Presently we are facing tough competition because of the large number of assemblers of Chinese make motorcycles,” said a Lahore based entrepreneur engaged in motorcycle business. Besides, the local market, the assemblers are also catering to the demand of Afghanistan and Sri Lanka.
“Due to our cheap cost of production, we are exporting the motorcycles to Afghanistan and Sri Lanka,” said the assembler and added unlike the past when only Japanese motorcycles were demanded, the Chinese have made solid inroads. The 70cc assembled and imported Chinese make are available in the range of Rs 38,000 to Rs 41,000 per unit while Japanese made units are generally priced at Rs 65,000 per unit in the local market. “I would prefer cheaply available Chinese motorcycles as compared to others which are very costly and the quality is almost same as compared to fuel consumption and parts are concerned,” a customer said in the busy Akbar Market in Saddar area.