July 03, 2006	Monday	Jumadi-ul-Sani 6, 1427

IN a market economy, a wide range of goods of different prices and quality produced with the help of low or sophisticated technologies remain in demand. The choice of the product depends on the purchasing power of the buyer and its utility.

Price-conscious consumers in Karachi prefer to buy Chinese motor bikes, cheaper by Rs19,000-20,000 as compared to the highest priced Japanese 70cc bike.

In the rural areas, the newly introduced Chinese bikes have yet to make deeper inroads perhaps for the lack of an adequate market network and rural riders’ preference for well-known brands with assured supplies of spare parts and after sales service.

In Karachi, Chinese bikes run side by side with Japanese old bikes and “not with new bikes which are very fewer in numbers,” say the local motor bike dealers.

Under pressure from growing sales of cheaper Chinese brands, a leading local Japanese bike assembler reduced in September 2004 the price of 70cc bike from Rs68,000 to Rs54,000.

However, the Japanese bike makers dominate the market as bulk of the sales are in the rural areas where farmers usually purchase new bikes when they make good money from a rich harvest.

Akbar Road, a hub of all new and old bikes, now wears a festive look owing to huge presence of buyers in which more than 95 per cent are looking for cheap Chinese bikes.

Three years back, these dealers of second-hand bikes used to do a roaring business when Japanese makes enjoyed a monopoly. They have now acquired authorised dealership of Chinese bikes by renovating their showrooms.

The sale of one of the popular Japanese brands has also been hit in Karachi by bike snatchers for its re-sale value.

Currently, there are now reportedly 41 Chinese bike makers compared to only two to three assemblers three years back. Their share in sales is 290,000 units out of a total of 700,000 units. About 100,000 units are sold in Karachi alone.

Mohamamd Arif, who works in a private office, says he is buying Chinese bike because they are much cheaper. “If a cheap bike gives two years’ service without any wear and tear problem, I will consider that my Rs34,000-35,000 has paid off,” he adds.

Vice Chairman of Association of Pakistan Motorcycle Assemblers (APMA), Mohammad Sabir Shaikh says that he does not agree with the impression about quality of Chinese bikes. Three years back the consumers did complain about low quality parts, leak of engine seals, shock absorbers, engine vibrations, etc. But now the manufacturers have improved the quality a lot and that is why consumers in Karachi have fancy for it. Besides, he says, price difference also lures buyers.

To a query as to why price difference does not attract upcountry and rural area buyers, he says that lack of dealership network and after sales service by Chinese bike makers is an impediment in boosting sales. The Japanese manufacturers have this advantage because of their decades-old presence.

“Things have improved as Chinese bike assemblers as well as their vendors have invested a lot in improving the quality. Consumers are witnessing the difference,” he says claiming that re-sale value of Chinese is getting better with the improvement in quality.

A large number of consumers purchase Chinese bikes through leasing facility being offered by a commercial bank. Besides, authorised dealers also have their own schemes. Bikes are being offered at instalments of Rs1,000 per month on a small amount of down payment.