First bike sales slump in 25 years

LAHORE: Recession or boom, motorcycles continued their robust growth starting from around 100,000 bikes in 1999-2000 to 2.6 million in 2021-22. Current fiscal year is the first since 2000 when this manufacturing is expected to post a steep decline.

Is this a sign of the deepest recession that the country has ever faced? This may also be due to the steep increase in the price of three wheelers.

Since bikes are purchased and used by low income consumers, the sales might have slowed a bit had the prices remained at previous level, but at current prices and with almost stagnant incomes, most are finding it hard to cover even their recurring monthly expenses.

Declining agricultural productivity might be another reason for low sales as rural areas account for the bulk of motorcycle sales in Pakistan. The floods that uprooted 34 million people from their homes is definitely a reason for subdued sales.

The data of motorcycle production comes mainly from the statistics released by the Pakistan Automotive Manufacturers Association (PAMA). However there are a large number of motor bike manufacturers that are not registered with PAMA, and their production is recorded by the Pakistan Bureau of Statistics which is released late.

Barring three Japanese manufacturers, most of the local bike manufacturers produce the 70cc variant. There has always been a huge price difference in the retail price of the 70cc Japanese bike and the local or Chinese similar strength bikes.

Still, the Japanese brand sales are almost double the sales of all other brands. Currently, the market leader Japanese 70cc bike is priced at Rs125,000 and the other 70cc variants are available at Rs80,000 to Rs85,000.

However, the statistics for last year are available that put the total motorbike production at 2.6 million. According to that data in 2021-22, the market leader produced 1.35 million motorcycles, and the rest 1.25 million units were sold by all others, including two other Japanese brands. These Japanese brands, however, produced motorbikes of 100cc or above power. The PAMA statistics for the first five months of this fiscal give a true picture of the state of the bike industry in the country.

In the July-November 2022 period, the bike industry (registered with PAMA) produced 521,643 bikes against 797,346 produced during the same period of last year. This is a massive decline of 34 percent in the first five months of this fiscal.

To get a picture of the turmoil faced by different manufacturers, a further study of PAMA statistics revealed that Honda produced 563,268 bikes in the first five months of the last fiscal. This year the production has declined to 435,390 a decline of over 22 percent.

United Auto Motorcycle is the next brand with the highest production. It produced 136,720 units during July-November 2021. This fiscal year during the same five months, the production has dropped to 38,957 bikes. This is a massive decline of over 300 percent.

Next comes Road Prince Motorcycle that produced 52,289 motorcycles in the first five months of last fiscal. During the same period this fiscal, its production has declined to 14,540 units. This again is a similar huge decline. Overall the production of all other motorcycle producers except Honda declined by 73 percent.

This unexpected decline in motorcycle uptake has created turmoil in the industry and thousands of workers have been laid off. Some industry experts attribute the decline in bike production to the restrictions on import of components imposed by the government.

This may be partially true but we must recognise the fact that the buyers lack finances to buy two wheelers at current high rates.