Motorcycle exporters seeks government support for R&D

Motorcycle exports took a nosedive after withdrawal of R&D support facility during the previous fiscal year. The government withdrew $50 per unit research and development support from domestic manufacturers in 2010-11, which shrank two-wheelers exports by 135 per cent.
Export statistics indicate that Pakistan exported $3.5 million worth motorcycles in FY2009-10, but after removal of R&D facility in 2010-11, two-wheeler exports witnessed a sharp decline and settled at $1.34 million. Figures show that despite all odds energy crisis, high cost of capital and poor law and order situation, domestic motorcycle industry showed great resilience by exporting 2,500 units per month during April-July 2011.
Industry experts underscore that local manufacturers have achieved over 90 per cent localisation and eying towards 100 per cent indigenisation, but it might not be possible without the government’s patronage. They urge the government to restore much needed R&D support facility in order to boost two-wheeler exports from Pakistan. They ask the government to provide local manufacturers a level playing field by formulating consistence policies. Currently, Pakistan is exporting two-wheelers to Afghanistan and Bangladesh, and local manufacturers are now trying to enter in the untapped markets of Iran and Africa.
They pointed out that a Japanese manufacturer in Pakistan has already got global exporting rights for locally manufactured motorbikes and with little support from the government of Pakistan could easily double its motorcycles exports. It will help in saving the precious foreign exchange and will create thousands of jobs in the country, they added. In addition they said that only carburetor and a couple of high-tech assembling parts are still being imported from different countries. But if the government provides industry-friendly policies and restores R&D facility the industry is ready to make more investment in high-precision and modern technology to make these components in the country. It will help in reducing prices for domestic consumers and boosting exports from Pakistan, they underlined.
They highlighted that currently, around 90 motorcycle manufacturing units are operating in the country of which around a dozen have production capacity of over 50,000 units per annum are planning further investment of around $150 million to cater the domestic and international demand. Industry leaders also underlined that motorcycle industry is among the few industries in the country that has backward and forward linkages and providing jobs to a large number of workforce. In addition, it has developed huge vendor base over a period of five decades and now it is the time to look beyond borders and reap benefits of its huge potentials. They agreed that despite tremendous development in the industry, it still lacks innovation in technology and design. However, they pointed out, it is mainly because of consumer adaptability to new products, price consciousness and long gestation period in the auto industry.