LAHORE: Regardless of recession or boom, motorcycle production and sales continued its robust growth from around 100,000 bikes in 1999-2000 to 2.6 million in 2021-22. However, 2022-23 could be the first fiscal year since 2000, when bike manufacturing will fall sharply.
Does bike shortage signal Pakistan’s worst recession?
Decline in bike manufacturing and sales may also be due to steep rise in two-wheeler prices.
Since bikes are bought and used by low-income buyers, sales could have been slightly lower if prices had remained stable, however, with current rates and nearly stagnant incomes, people are struggling to make ends meet.
Another reason for the decline could be the decline in agricultural production, as most of the motorcycle sales in the country are in rural areas. The recent floods that affected more than 34 million people are one of the reasons for the decline in sales.
Motorcycle production data is from the Pakistan Automotive Manufacturers Association (PAMA), however, many motorcycle manufacturers are not registered with it, and the Pakistan Bureau of Statistics (PBS) records their production data.
Barring three Japanese manufacturers, most local bike manufacturers produce the 70cc variant. However, there has always been a huge gap between the retail price of a 70cc Japanese bike and local or Chinese models.
But, the Japanese brand’s sales are still almost double the sales of all other brands. Currently, the market leader Japanese 70cc motorcycle is priced at Rs 125,000 while the local 70cc variants are available for Rs 80,000 to 85,000.
However, last year’s data is available which puts the total production of motorbikes at 2.6 million.
As of 2021-22 data, the market leader produced 1.35 million motorcycles, and the remaining 1.25 million units were sold across all other two Japanese brands. However, these Japanese brands produce motorbikes of 100cc or more power.
The PAMA statistics for the first five months of the current financial year give a true picture of the state of the bike industry in the country.
In the period July to November 2022, the bike industry (registered with PAMA) produced 521,643 bikes compared to 797,346 bikes during the same period last year. This is a huge decline of 34% in the first five months of the current financial year.
To get a picture of the turmoil faced by various manufacturers, a further study of PAMA statistics reveals that Honda produced 563,268 bikes in the first five months of last fiscal. Production this year is down 22 percent to 435,390.
United Auto Motorcycle is the next brand with the highest production. It produced 136,720 units from July to November 2021. During the same five months in this financial year, production has declined to 38,957 bikes. That’s a whopping drop of over 300 percent.
It is followed by Road Prince Motorcycles which produced 52,289 motorcycles in the first five months of last fiscal. Its production fell to 14,540 units during the same period of the current fiscal year. This is again a huge downfall in the industry.
The total production of all other motorcycle producers except Honda fell by 73%.
This unexpected decline in motorcycle use has caused industry upheaval and laid off thousands of workers. Some industry experts attribute the decline in motorcycle production to government restrictions on the import of parts.
This may be partially true but we must acknowledge the fact that buyers lack the financial resources to purchase two-wheelers at the current high rates.
