72 companies assembling motorcycles

Friday, March 11, 2011

72 companies assembling motorcycles

KARACHI: The number of motorcycle assemblers has almost tripled to 72 companies in the country during the last 10 years.

According to the statistics of Association of Pakistan Motorcycle Assemblers (APMA), presently 72 registered companies were involved in the manufacture, import and assembling of the two-wheelers 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,” Pakistan’s motorcycle industry representative and Chairman APMA Mr. Muhammad Sabir Shaikh said on Thursday.

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, and additional duty on deleted parts (Manufactured in Pakistan) is 32.5% it means the to total cumulative duty on CKD parts is 47.50%. Statistics show that during calendar year 2010, the production of motorcycles stood at 1.5 million. Assembly lines rolled out 0.121 million units in January and 0.146 million in December.

The assembling companies are based in Karachi, Hyderabad, Gujranwala, Gujrat, Lahore and Hub, Balochistan. “The cost of production in Karachi is too high as compared with that in the province of Balochistan, Punjab and even interior of Sindh province where cheap labour is available,” Shaikh said.

At least 50,000 direct and 150,000 indirect skilled and semi skilled workers were employed in this business. “We can do attract more business if the government announces uniform duty for CKD and CBU kits,” he pointed out.

A motorcycle assembling unit is set up with an investment ranging Rs30 to 40 million depending on the real estate and the infrastructure. “Presently we are facing tough competition because of the large number of assemblers of Chinese motorcycles,” said a Lahore based entrepreneur engaged in motorcycle business.

Besides, the local market, the assemblers are also taking the Afghanis and the Sri Lankans for a ride. “Due to our cheap cost of production, we are exporting motorcycles to Afghanistan and Sri Lanka,” said the assembler. Unlike the past when only Japanese motorcycles were in demand, the Chinese models were also popular nowadays.

A 70cc motorcycle assembled with imported Chinese components is available in the range of Rs38,000 to Rs41,000 while a locally manufactured Japanese model may cost Rs65,000 per unit.

“I would prefer an economically priced Chinese motorcycle as compared with other established Japanese brands, which are costly but the quality is almost the same, so is the fuel consumption and availability of spare parts,” said a customer Ali Hussain, in the busy Akbar Market the hub of bike trade in Karachi. Copyright APP (Associated Press of Pakistan), 2011

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