12 May 2004	Wednesday	21 Rabi-ul-Awwal 1425

KARACHI, May 11: Many business houses and investors are now making a bee line to get approval from the Engineering Development Board (EDB) for setting up of Chinese bike assembly plant.

Currently, 15 Chinese bike makers, approved by the EDB, are making all out efforts to break the dominance of three Japanese bikes assemblers which have virtually ruled the Pakistani roads one and a half years back.

Market sources said that around 30-35 business houses and investors have knocked the EDB doors to roll out cheaper bikes in a market which is fast heading towards a major change in favour of consumers. However, Patron-in-chief of Sindh Motorcycle Manufacturers Association (SMMA), Anwar Iqbal confirms that around 15-20 new investors are definitely waiting for the green signal from the EDB.

The strong point of the Chinese bike assemblers is the difference of Rs20,000-25,000 as compared to Japanese bike makers coupled with attractive colours, extra features and galore of new designs.

Because of these factors, Chinese assembled bikes are now running side by side today with the Japanese counterparts on the roads. Even the imported Chinese bikes are also racing neck-to-neck with Japanese bikes.

The scenario in the next one year would change in favour of consumers in case more companies take plunge in bike assembling. Local Chinese bike makers and around 15-20 importers of bikes have now set their eyes on the 2004-05 budget, to be announced in June, in which importers are lobbying for further cut in import duties on bikes, while the local Chinese bike assemblers are looking forward for cut in import duties on completely knocked down (CKD) kits.

In the last budget, the government had cut the import duty on bikes to 75 per cent from 105 per cent but on Japanese makers hue and cry the duty was reverted to 90 per cent. Currently the import duty on CKD kits is 30 per cent besides 15 per cent sales tax.

Market people are anticipating changes in duty structure of imported bike and locally assembled bike kits. Besides, the markets are also abuzz with the reports regarding cut in sales tax to 12.5 per cent, which had also been hinted by top government officials in various forums.

Mr Iqbal thinks that if the government is thinking for a cut in import duty on bikes - then this decision should also be followed by cut in import duty on CKD kits otherwise assemblers would be the sheer losers if only import duty on CBU bikes are cut.

Besides, report of cut in sales tax would prove beneficial for the consumers as it would result in price cut of bikes. He says that the combined bike sales of Japanese, Chinese and imported is expected to touch 500,000 units by June this year, if compared with total sales of bike up to 250,000 units in June 2003.

Bike sales are likely to touch one million mark in the next two years, he adds. He said in the last nine to 10 months - around 80,000-90,000 imported bikes found way into Pakistan. He added that his company Dewan Motorcycles alone sold 35,000 bikes in the last 15 months.

He said that around 25,000 new jobs have been created with the commencement of 15 new Chinese bike assembly plants in the country. Currently, the 70cc Chinese assembled bikes are selling in the range of Rs36,000-40,000, while imported bikes prices range between Rs40,000-41,000, and Japanese assembled motorcycles are available at Rs58,000-62,000.

He said only two banks - Khadim Ali Shah Bukhari (KASB) and Askari - are offering bike financing packages. Production and sales could further boost if more banks and leasing companies offer bike financing. Besides, authorized dealers are also offering various instalment packages for bike buyers.

Chinese assembled bikes like Sohrab, Pak Hero, Super Star, Metro, Star, United, Excel, Guangta, Qinqi, Super Asia, Hero, Hawk, Ginan, New Asia and Jinhao are competing with Japanese bikes like Honda, Suzuki and Yamaha.

Akbar Road, the main hub of all the motorcycles, has been bustling with middle income buyers where majority of second-hand bike dealers have got the dealership of Chinese bike companies. Besides, the rate of shops at the Akbar Road are also flying high.

However, Japanese bike assemblers had yet to receive any major blow in their sales because of timely cut in prices by Rs7,000- Rs10,000 in order to remain competitive in the market.

Consumers, irrespective of the fact that the Chinese technology does not stand stall against the Japanese, are still not bothered about the quality of Chinese bikes as they are more interested in the price difference of Rs20,000-25,000 as compared to costly Japanese assembled bikes.