KARACHI, Aug 8: Motorcycle market is now set to witness a phenomenal change after entry of seven new Chinese bikes, giving consumers a wider choice to own two wheelers at prices ranging between Rs37,000-42,000 as compared to Japanese bikes at Rs70,000-80,000.

Another change in the market is also on the anvil in shape of arrivals of imported bikes as government has cut import duty on completely built up (CBU) bikes to 75 per cent from 105 per cent.

Chinese bikes, namely Hero, Qingqi, Pak Hero and Sohrab have already made inroads in the local markets a few years back. The entrance of new Chinese bikes is expected to further attract people from the middle income group who were forced to take a costly ride by paying huge money to own Japanese bikes.

According to president of Sindh Motorcycle Assemblers Association, Mohammad Sabir Shaikh, out of seven new Chinese bike assemblers three manufacturers have set up plants in Karachi followed by two in Lahore and three in Hyderabad.

The new bikes are Rocket NC-70, Star DS-70, Ginan JS-70, Guangta GT-70, Parwaz BS-70, Imperial IP-70 and Superstar SS-70.

Each unit has been set up at an estimated cost of Rs10-30 million after entering into a technical collaboration agreement with Chinese companies. Around 30-40 persons have got direct employment in each plant besides creating a large number of jobs indirectly.

Sabir said all the relevant documentation process with the government like getting of quality certificate from Pakistan Standard and Quality Control Authority, approval of deletion plan, national tax registration certificate, trade mark certificate, etc., has been completed. Only a a formality of getting licence for manufacturing from the Engineering Development Board (EDB) is required by the assemblers. The new Chinese bikes are being rolled out at 85 per cent deletion.

He said each plant has the capacity to assemble 200-500 bikes per month depending on the market conditions.

On cut in import duty on bikes, he said, some dealers have already opened letters of credit (LCs) to import mainly Chinese bikes. Consumers will soon be on a hunt for a variety of imported bikes of all engine capacities.

He said it will hardly make an impact on new investments as “our prices are already cheaper.”

“Buyers will now be free to select a variety of models at cheaper rates,” he said adding that consumers had a very little choice to purchase a model from costly Japanese bikes.

He said demand of bikes has been picking up as people from the middle class cannot afford to own a car (800cc to 1,000cc) at prices ranging between Rs 350,000 t0 550,000. A person, belonging to a middle class family, still loves to take a ride with his family on a two wheeler to visit his friends and relatives.

On the other hand, Japanese assemblers had a good outgoing fiscal 2001-2002 in terms of sales and production.

Production of bikes (Honda, Yamaha and Suzuki) surged by 11 per cent to 120,627 units in 2001-2002 from 108,850 units in 2000-2001. Sales of these bikes stood at 120,083 units as compared to 108,649 units.

An assembler said that good cotton crop of 10.6 million bales in 2001-2002 followed by satisfactory wheat crop and arrival of various companies in bike leasing played a major role in boosting sales and production.

The entry of Chinese bikes in the local market is expected to give a tough time to Japanese assemblers, thus eroding their market share of already established companies. Chinese and Japanese assemblers are heading for a very tough competition to grab sizable market share.