KARACHI: In a surprising development, sales of low-priced motorcycles has been declining in recent months but that of locally assembled foreign bikes rising, despite soaring food inflation and utility bills.
Prices of locally assembled Japanese and Chinese bikes have been raised multiple times this year, but it is the low-priced bikes that have taken a hit as sales of costly bikes have remained unaffected.
Atlas Honda Limited (AHL) has been beating its own sales record while many assemblers of Chinese bikes have been struggling hard to regain lost ground.
AHL recorded the highest monthly sales of 128,503 units in November, surpassing its own record of 125,031 units sold in October.
In the July-November period, the AHL sales rose to 563,575 units as compared to 512,010 in the same period last year.
In the five-month period sales of locally assembled Japanese bikes Suzuki and Yamaha rose to 14,915 and 9,962 units from 8,719 and 8,733 units last year, thus recording an increase of 71 per cent and 14pc, respectively.
The sales of Chinese bike assemblers Road Prince and United Auto Motorcycle plunged by 23pc and 20pc to 52,289 and 136,812 units respectively.
The sales of Ravi bikes were 53pc lower with 1,810 units as compared to 3,879 units.
Industry and market stakeholders offer differing views about the changing market trends for the cheap and costly two-wheelers.
Sohail Usman, the group chairman of Road Prince Motorcycles, said a number of buyers of Chinese bikes had certainly shifted towards Honda 70cc motorcycles, which was evident from its record-breaking sales in November.
He said the buyers in urban areas, whose income has shrunk and are getting low salaries, have stayed away from purchasing even low-priced Chinese bikes due to affordability issues.
Also, competition among assemblers of Chinese bikes has intensified because of which quality maintained by them has suffered, he said.
A dealer with outlet on the Akbar Road, Karachi, Mohammad Sabir Sheikh, said soaring food prices and utility bills had hit low-income and middle-class buyers hard, whose first choice used to be locally assembled Chinese bikes owing to their low prices. For the last few months, however, such buyers had slowed down on buying two-wheelers.
He said that growers/farmers in the rural areas prefer buying Honda bikes rather than the Chinese brands. Due to better crops and good crop prices the farming community mainly turned to buying costly Japanese bikes, especially Honda.
Mr Sheikh said the total bike production in FY22 would remain lower in view of the depressed demand for Chinese bikes but the current fiscal year would end with rising production of Japanese bike assemblers.
He was of the opinion that a new trend was emerging under which owners of high-priced car also bought Japanese bikes instead of Chinese ones. This is creating an additional demand for the branded Japanese bikes.
According to data pertaining to Large Scale Manufacturing, the country’s bike production in July-October 2021 fell by 5pc to 769,802 units from 807,230 units in the same period last fiscal. In October 2021, production came down by 13pc to 192,450 units from 221,655 units in October last year.
Mr Sheikh said the Chinese bikes of 70cc capacity had become costlier, rising to Rs69,000 from Rs41,000 two years ago, followed by Honda 70cc bikes to Rs94,500 from Rs65,000.
Honda CG-125 is now available for Rs152,500 as compared to Rs108,000, while Suzuki 150cc sells at Rs232,000 as compared to Rs168,000. Yamaha 125cc bike is sold at Rs190,000 now as compared to Rs132,000 two years back.
Some assemblers of Japanese bikes said that actually the buyers of new Chinese bikes are those people who used to own used motorcycles but who are now trying to turn to new units. However, declining purchasing power is not allowing them to own even a new low-cost bike if compared to Honda CD70cc.
They said the mindset of people had also changed a lot since last year as many people with ample cash in hand prefer costly Japanese bikes.
Benefits offered by a number of dealers of Japanese bikes are also proving to be a factor in the urban areas. The dealers take Rs50,000-70,000 from the buyers in advance and ask them to pay the rest of the money on monthly installments with a small interest, they said.
Buyers interested in long tours also buy power bikes of 125cc-150cc capacity. This trend has gained momentum from Rawalpindi. Buyers in Karachi and Lahore are also purchasing such bikes due to better suspension and engine performance than Chinese heavy bikes, they added.
They said the buyers of Chinese bikes wanted to get a unit for around Rs40,000. Now such buyers are becoming reluctant to invest in them after their prices have surged appreciably.
Published in Dawn, December 19th, 2021