BUYERS of Chinese assembled motorcycles are now at the mercy of Sindh’s Excise and Taxation Department to get the registration of their newly purchased bikes — but the department is continuously rejecting the applications of bike owners.

The department has put on hold the registration of Chinese assembled motorcycles since July, saying that the local assemblers have not obtained deletion programme for their products from the Engineering Development Board (EDB).

Local assemblers say that the relevant documentation process with the government like getting of quality certificate from the Pakistan Standard and Quality Control Authority, the approval of the deletion plan, the national tax registration certificate, the trade mark certificate etc., has been completed. Only a a formality of getting licence for manufacturing from the EDB is required by the assemblers.

All assemblers have approached the Governor Sindh and Industries Department with documentary proof, saying the EDB is now using delaying tactics which is a sheer wastage of time. But the matter is still not resolved.

As a result of the dilly-dallying tactics by the EDB and the non-registration of bikes by the department, the Chinese bike assemblers have virtually stopped production. Besides, the authorized dealers of these manufacturers have now got built up stocks of unsold bikes at their showrooms.

Customers walk into showrooms but they cannot buy cheap chinese bikes due to the non-registration by the Excise and Taxation Department.

“We are now thinking to start discharging our staff and workers at the plants and the showrooms in case the matter is not resolved on urgent basis,” President of Sindh Motorcycle Assemblers Association Mohammad Sabir Shaikh says.

The Sindh Industries and Commerce Department on September 14 had asked the EDB to finalize the cases of these Chinese bike assemblers at the earliest as these units have made sizable investment, providing employment to local people and contributing to national exchequer.

The Sindh province has witnessed arrival of five assemblers — the Delta Innovations Limited (Star DS-70), the National Corporation (Rocket NC-70), the Sitara Auto Impex (Guangta GT-70), Shafique Sons (Jinan JN-70) and the Memon Associates (Super Star SS-70), while two plants, the Parwaz BS-70 and the Imperial IP-70 bikes, are based in Punjab.

Out of the seven new Chinese bike assemblers — three have set up their plants in Karachi and three in Hyderabad. Each unit has been set up at an estimated cost of Rs10-30 million after entering into a technical collaboration agreement with the Chinese companies. Around 30-40 persons got direct employment in each plant, besides creating a large number of jobs indirectly.

Each plant has the capacity to assemble 200-500 bikes per month depending on market conditions. Assemblers claim that the bikes contain 85 per cent local parts.

The Chinese bikes, namely Hero, Qingqi, Pak Hero and Sohrab have already made inroads in local markets few years back.

These manufacturers are offering a wide range of choice for consumers to own two-wheelers at prices ranging between Rs38,000 and 42,000 as compared to the Japanese assembled bikes at Rs70,000-Rs80,000.

The entrance of new Chinese bikes is expected to further attract people from the middle income group who were previously bound to take a costly ride by paying huge money to purchase costlier Japanese bikes.

“Buyers do not have a free choice to select a variety of models at cheap rates but it is possible only when the pressing problems at the EDB and the excise department were resolved,” Sabir says. The 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 Rs350,000 and Rs550,000. 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.

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

Sabir Shaikh is of the view that some influential Japanese assemblers are outrightly using their influence on the EDB not to approve deletion programme of the Chinese assemblers as they are fearing loss of market share and sales.

“The ban on bike registration has been imposed only to please and safeguard the vested interest of a few manufacturers who are enjoying monopoly and selling motorcycles at high prices,” says a letter of the association addressed to President Pervez Musharraf.