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Defiant bike assemblers raise prices

September 15, 2011

In the letter, APMA said assemblers were unable to lower the prices due to rising cost of production on account of higher valuation of parts and accessories. - File photo

KARACHI, Sept 15: The defiant bike assemblers have jacked up prices this month instead of passing on the benefit of one per cent cut in general sales tax (GST) to 16 per cent and removal of 2.5 per cent special excise duty (SED) effective from July 1, 2011.

However, the government has yet to take any action against the assemblers for not extending tax benefits to the end-users.

The bike makers in their letters to the authorised dealers had not mentioned any reason for price hike. On September 6, 2011, Atlas Honda had increased the price of its two wheelers by Rs600 to Rs1,100. The CD-70 now costs Rs66,500, CG-125 at Rs91,000, CD-100 at Rs75,000 and CG125 Delux at Rs112,000. In March this year, CD-70, CG-125, CD-100 and CG-125 Delux were available at Rs65,000, Rs89,500, Rs73,500 and Rs111,000 respectively.

Meanwhile, a Honda bike dealer said that the company had increased the prices to offset the impact of rising cost of production on account of falling rupee against yen and other currencies making import of parts costlier. However, it sounds weird when 90 per cent deletion levels have already been achieved in the 70cc bike.

The maker of DYL Motorcycles had raised the prices by Rs1,300 from September 10. The new suggested retail price of YD-70 Dhoom is Rs48,500 followed by YD-100 Junoon at Rs77,600, YD-100 Yama 4 at Rs73,700 and YB-100 Royale at Rs75,200.

In March 2011, YD-70 was available at Rs47,900 while YD-100, YD-100 Yama 4 and YB-100 were selling at Rs75,900, Rs72,000 and Rs72,900 respectively.

Only Pak Suzuki Motor Company Limited had reduced the price in July 2011 by Rs1,900-2,100. However, the company has come out with new prices effective from September 1. The new price of Shogun Deleted, Shogun, Sprinter, Sprinter ECO and GS150 is Rs76,500, Rs82,000, Rs72,900, Rs69,400 and Rs91,000.

The big Japanese bike makers are fully cashing in on the huge demand arising out from rising farm income in rural areas.

Growers usually prefer lifting Japanese bikes irrespective of higher price tags. The share of rural buying in total bike sales stands at 60 per cent.

Honda sale stood at 102,196 units in July-August 2011 as compared to 85,176 units in the same period of last year, while Suzuki sale also surged to 3,722 units as compared to 2,955 units.

Also Chinese bike makers, who enjoy lion’s share in urban areas, have yet not passed on benefit of taxation relief to the consumers blaming high cost of production after increase in valuation rates of parts and accessories by the Customs Department.

The Association of Pakistan Motorcycle Assemblers (APMA) in a letter to the Director General of Customs Valuation earlier this month informed about the problems being faced in clearance of parts through PRAL and PaCCs.

In the letter, APMA said assemblers were unable to lower the prices due to rising cost of production on account of higher valuation of parts and accessories.

The association said that the Customs department was issuing the valuation advice without consulting the stakeholders, market survey and without the origin items and without obtaining quotation from international markets in violation of Section 25 of the Customs Act.