KARACHI, June 28: The Chinese bike makers said on Thursday that they were ready to reduce prices of their two-wheelers but the unjustified higher valuation of kits and parts by the Customs Valuation department prevented them to do so.

They alleged that the Japanese bike makers had launched a campaign against them and they were using the directorate of Customs Valuation as a tool for higher valuation of parts and kits used in the manufacturing of Chinese bikes.

They said that the entry of Chinese bikes in Pakistan had broken the cartel of Japanese bike makers, besides forcing the Japanese assemblers to cut prices phenomenally in the last three to four years in order to remain competitive in the market.

“We can also bring down prices by Rs1,000-2,000 but higher valuation has resulted in pushing up the manufacturing cost,” vice-chairman of the Association of Pakistan Motorcycle and Rickshaw Assemblers, Mohammad Sabir Shaikh said adding that Customs has been charging higher valuation on some 14 parts and kits.

He said the people were expecting cut in prices of Chinese bikes following reduction in prices made by the Japanese bike makers this month. But the assemblers cannot increase the price of bikes despite higher valuation of parts and kits as they will lose their market share to the Japanese bike makers.

However, after a cut in price of Honda bike by Rs4,000 in category of 70cc, the gap between the Japanese and the Chinese bikes has shrunk to Rs14,000 as compared to Rs32,500 in May 2003.

He said that the Chinese bikes dominate in Karachi market with 85 per cent share and their market share is gaining in rural areas after improvement in quality. The cut in prices by Japanese bike makers is aimed at maintaining or gaining market share, especially in rural areas.

Sabir said that the association had written a letter to the prime minister and the relevant ministries to take notice of the campaign launched by the Japanese bike makers against the Chinese bike makers in connivance with Customs for issuing unjust valuation advices by fixing exorbitant valuation of Chinese origin kits.

He said the association members were now perturbed over the Customs move and as a result a number of consignments had been stuck-up at different sea ports and dry ports.The Chinese bike industry has created 200,000 jobs directly and indirectly in last four years, besides contributing huge tax revenues. These facts had been admitted by the Minister of State for Finance Omar Ayub Khan in his budget speech.

A recent amendment has been effected in section 25 A of the Customs Act, 1969, whereby the valuation department has been given unbridled powers to fix import values for the purpose of levying Customs duties with retrospective effect. It is apprehended that such powers would be used against its members to their detriment, the association said.

Presently, the transactional values of motorcycle parts being imported from China is not only fair but also supported by various suppliers located in China and this can also be verified from the country of origin.

The association will support any such inquiry so that a rational valuation may be arrived at and the members may carry on their business without any hindrance. Currently, there are 53 bike assembling units in the country (50 Chinese and three Japanese).