December 21, 2003	Sunday	Shawwal 26, 1424

KARACHI, Dec 20: Competition between Chinese and Japanese bike makers is likely to further intensify from next year as four new entrants are set to roll out their 70cc two wheelers after getting the approval from the Engineering Development Board (EDB) and Pakistan Standard and Quality Control Authority (PSQCA).

United Sales Lahore, Excel Industries Lahore, Sitara Auto Impex Karachi and Super Asia Motors Gujranwala will introduce 70cc bikes, thus joining the Chinese bike assemblers club from early next year, making a total representation of 11 Chinese bike makers in the country.

Currently seven units (two in Hyderabad, three in Lahore and one each in Karachi and Gujrat) are busy in the manufacturing of cheaper bikes namely Superstar, Metro, Hero, Star, Pak Hero, Qingqi and Sohrab in 70cc to 100cc versions. They are offering price ranging between Rs39,000-41,000 mainly in 70cc bikes.

Chinese bike makers have invested around Rs40-50 million each by giving direct job opportunities to at least 100 persons in each units besides creating jobs for vendors, a senior member of Sindh Motorcycles Manufacturers Association (SMMA) told Dawn on Saturday.

The Chinese bikes are still Rs20,000-25,000 cheaper despite a cut of Rs7,000-10,000 made by Japanese bike assemblers a few months back, he said.

Besides the availability of locally produced bikes, the Akbar Road, main hub of all varieties of two wheelers, also witnesses the presence of Chinese imported bikes like Jialing, Guangta, Kington, Moon Star, Zmco, Road Star and the Korean Hyundai bike. These bikes are available from 50cc-125cc engine capacities at a price ranging between Rs36,000-70,000.

Easy availability of Chinese bikes at instalments by the dealers coupled with leasing facility on some bikes have lured the customers in a big way.

However, consumers used to complain to the dealers about vibration in engine, low quality and problems in jumps and low quality of colour. Chinese bike manufacturers were also using low quality spare parts in the bikes.

But, a spokesman of SMMA said, these problems had now resolved and assemblers are now producing quality bikes. On the other hand, consumers hardly complain about the imported Chinese bikes. Its quality and durability enjoy an edge over locally assembled bikes.

He said that the 2003 was likely to mark the bike sales of both Chinese and Japanese brands to touch around 400,000 units in which Honda taking the lead of around 200,000 units followed by 48,000 units of Yamaha, 35,000 units of Suzuki, around 100,000 units of Chinese bike makers and 17,000 units of imported Chinese bikes.

Consumers, who had previously only three costlier Japanese bikes on their selection list, have now got a wide range of choice owing to entry of cheaper Chinese bikes. Low prices and attractive designs of Chinese bikes have so far succeeded in catering to the demand of lower and middle income group buyers.

With the entry of Chinese bikes, the business of second-hand bike dealers have touched the bottom rock. Akbar Road, now wearing a festive look, had 125 dealers two years back out of which 100 dealing in used bikes. Today, more than 70 out of 125 are selling Chinese bikes as used bike dealers had shifted to Chinese bike business.

Market scenario in the middle of 2004 is expected to change in case the government cuts the import duty of 90 per cent on import of completely built up (CBU) bikes in 2004-05 budget under WTO obligation. The duty cut will further result in price cut of imported Chinese bikes, thus forcing the local Chinese and Japanese bike makers to revise their prices in order to stay in the market.

Meanwhile, one of the leading Japanese bike makers had put up a case of tax evasion in the 73rd indigenization committee meeting held on November 17 in Islamabad.

The assembler said that the none of the new entrants have fulfilled the terms and conditions of localization of parts and components. All of them are assembling through import of spare parts where the customs duty is 25 per cent as against 30 per cent on completely knocked down (CKD) kits. He claimed that import of assemblies and sub-assemblies at ridiculously high under invoicing, frame body and fuel tank being imported at less than a dollar each.