Who buys motorcycles? By Ahmed Iqabalabadi

NOTE: These are not Federal Government Figures. These are released by the Pakistan Auto Manufacturers Association

Who buys a motorcycle in Pakistan? Answer: a common man like a milkman, newspaper vendor, people commuting to their workplace, factory workers, farmers etc

Do banks and financial institutions finance motorcycles? Answer: Yes, but the salary requirements are very high to allow them to finance them. Also, being easily moveable from one place to another, banks remain hesitant to finance motorcycles.

If banks do not finance motorcycles generally, then how does a common man buy a motorcycle? Answer – well by cash.

What are the average prices of motorcycles? Answer – The lowest priced are the Chinese models starting at Rs 35,500 and the more expensive ones are the Japanese models that can be bought at Rs. 90,000.

Pakistan is going through a terrible economic situation, how can motorcycle companies sell more than 1 million motorcycles within 11 months of a year? Answer – beats me!

More than one million motorcycles produced and sold in Pakistan in 11 months - July 2009 to May 2010

These are questions I had in mind when I read the news report titled “Pakistan’s motorcycles output crosses million units in 11 months” in The News. In times of economic hardships, it is comforts and luxuries whose sales suffer. Case in point automobile production in US and Japan has come down in 2008 and 2009.

It is also interesting to note in the news report that Deletion programs (Deletion means that number of parts that are locally manufactured compared to being imported from source country) in motorcycles has facilitated the local entrepreneurs to launch their own brands and that the Chinese manufacturers were more liberal in transfer of technology than the Japanese.

This raises the point that I try to make always: times of difficulty provide an opportunity for businesses and entrepreneurs to shine. Had there been low demand, would we have seen a million motorcycles being produced and sold in the country in 11 months? Pakistan is a goldmine for investors, being the 7th most populous nation in the world having a population of nearly 175 million. Our middle class is close to 45 million which is growing with time. Whatever we may like to say to the contrary, our per capita GDP is growing too. These are signs for the non-believers to begin believing in your own country and promoting this as a destination for investors.

Yes what is needed is sound economic policy that allows for growth to be organic and well organized than herd mentality that we see usually.

Pakistan’s motorcycles output crosses million units in 11 months

By Mansoor Ahmad

The News

26th June, 2010

LAHORE: The production of motorcycles in Pakistan has crossed million units during the first 11 months of the current fiscal year, according to a study conducted by The News.
Pakistan Automobile brand members dominated by Japanese brands accounted for over 670,000 units during the first 11 months of the fiscal year and non-members mostly Chinese models produced over 400,000 units.
Chinese motorcycles are making fast inroads in the local market against the Japanese brands though Honda with sales of over 438,028 units till May this year followed by Yamaha that produced 113,288 units, according to the statistics released by Pakistan Automobiles Manufacturing Association (PAMA).
Even among PAMA members the next three largest producers are local brands using Chinese technology. Each of them produced more units than the Japanese brand of Suzuki. On the top is Hero that has produced 31,210 units till May and enjoys 4.5 per cent share in the PAMA production the data revealed.
The production of the company grew by 69 per cent against 18,388 units produced in 2008/09.
Only eight local, Chinese brands and three Japanese brands are PAMA members. The Chinese motorcycle producers have cumulatively produced over 114,000 motorcycles this year. However, a PAMA member said that around 45 non-PAMA producers are manufacturing around 450,000 motorcycles per annum. He said some of them have larger production than many PAMA members.
This year the total motorcycle production is estimated by the industry circles at around 1.1 million units. It was found that more than 56,750 Japanese motorcycles rolled in during the first 11 months of this fiscal year.
The local brands with the Chinese technology produced 514,000 units, including around 35,000 three wheelers, it said.
“The Chinese brands are increasing their market share rapidly,” said Dr Shahid Zia, a senior market analyst.
The high deletion in motorcycles has facilitated the local entrepreneurs to launch their own brands, he said, adding that the Chinese were more liberal in transfer of technology than the Japanese.
At the start of this century, 99 per cent of the market share was with the Japanese brands. Today, he said, the Japanese share has shrunk to 51.5 per cent, while the local Chinese brands have a share of 48.5 per cent.
He said that by the next year Chinese brands would have larger share in the market.

An industry expert said that Chinese motorcycles initially attracted customers because of lower rates. The Japanese initially ignored the threat from Chinese brands, but were then forced to revise downwards their prices.
The Chinese brands have now proved their reliability and quality as well that has kept check on the rates of Japanese brands, he said.
Localisation of almost all parts has also made the local rates immune from the variations in the currency rates. He said Pakistan now has a reliable vendor base and the country might soon venture into exports of local brands.



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