KARACHI: The import of completely and semi knocked down (CKD/SKD) kits for locally assembled cars has risen substantially in the last two months amid shutdown of assembling units due to coronavirus.

Assemblers imported $62 million worth of CKDs/SKDs in April, as compared to $43m in March and $39m in February, in anticipation of good sales ahead of Eid but now they are sitting with huge parts inventory at plants, which have been closed since the last week of March.

A vendor linked one of the reasons for rising imports of parts and accessories to the introduction of locally assembled Toyota Yaris just ahead of lockdown, followed by Suzuki Alto and other new vehicles as their assemblers must have imported kits in bulk quantities to cater huge expected demand from April onwards.

He said the manufacturers usually give orders for imported parts, raw material and kits 2-3 months earlier, keeping in view 30 days for arrival of shipments at the port followed by at least 10 days in clearance of goods and advance booking orders from the customers.

According to him, the manufacturers made higher imports but did not expect two-month closure under the lockdown.

With no sales and production from April to date and over 50 per cent decline in 10MFY20, Indus Motor Company (IMC) has raised prices of vehicles by Rs 110,000-500,000 on exchange rate parity, followed by Honda Atlas Cars by Rs60,000-120,000.

The rupee fell to Rs164 against the dollar in April, from Rs158.4 in March.

However, the auto sector has now taken a sigh of relief, especially in Punjab where the provincial government allowed opening of plants from Monday while confusion still grips in Sindh particularly Karachi.

BIKES: The two-wheeler retail markets had resumed their operations from Monday to Thursday but authorised dealers ran out of stocks of CD-70cc and CG125cc.

Association of Pakistan Motorcycle Assemblers (APMA) Chairman Mohammad Sabir Sheikh said a number of cash-rich growers from rural areas thronged the Karachi markets to lift bikes from money earned through wheat harvesting, which had started in Sindh and Punjab during March-May followed by arrival of mango crop.

He said the vegetable and fruit growers purchased two-wheelers after making good money due to skyrocketing demand and prices during Ramazan.

Growers had paid Rs5,000-6,000 extra to buy Honda 70cc at Rs81,000. They did not hesitate in giving over Rs140,000, instead of the actual price of Rs126,500 for CG-125cc.

Due to thin demand in Karachi, authorised dealers of Honda also diverted their sales towards rural buyers, he said.

One dealer said the maker of Honda bikes also provides two-wheelers to some big super stores from where non-authorised dealers purchase bikes as individual buyers and sell them on Akbar Road.

Authorised dealers had already asked the company to stop this practice and provide bikes to only them and not the non-authorised ones who are overcharging consumers.

The import of CKD/SKD kits for two-wheelers plunged to $2.6m in April, from $7m in same month last year and $4.7mn in March.

Published in Dawn, May 17th, 2020