Motorcycle industry needs govt support

MUHAMMAD RIAZ

LAHORE: The domestic two-wheeler industry has so far successfully achieved 90 percent localisation of parts but it needs government assistance to produce motorcycles with complete locally-made parts to hit the milestone of achieving 100 percent localisation.

The industry sources said that 100 percent indigenization would fulfil the dream of the local manufacturers to make cheaper motorcycles available for the consumers besides saving billions of rupees foreign exchange of the country which is spent on importing the locally unavailable parts.

The sources were very optimistic about the government's support in terms of continuation of industry-friendly policy, maintaining level-playing field and encouragement of local players to enhance their production through Research and Development (R&D) funds.

They revealed that the local players are trying tooth and nail to manufacture carburettors and hi-tech parts demanding high precision and modern technology. The industry needs government's support in all means to achieve the local production of these parts meeting the international standards.

The demand of the local industry to resume R&D fund is no way unjustified as the industry is progressing by leaps and bounds and any hurdle in its way must be removed. The government has withdrawn the R&D facility, ie US $ 50 per unit in 2010-11, after which the exports nose-dived by 135 percent to $ 1.34 million from $ 3.5 million in 2009-10.

However, the bike manufacturers showed great resilience and started regaining lost grounds in international markets as during the months, April to July 2011, the industry exported in excess of 2,500 units per month. This is against an average export of around 1,200 units per month last year. If R&D fund is resumed, there is no other opinion that Pakistan will easily be able to double its motorcycle exports this year.

The sources further said that this massive recovery by local industry is testament to the resilience of this sector. The progress of this sector has made over the last ten years or so is a proof that Pakistani entrepreneurs can compete with the best in the world if consistent policies are in place. With a view to effectively cope with domestic market of over 1.5 million units and after successful launch of their products in global markets, the local motorcycle producers are now planning further investment of over $ 150 million in their existing units. Almost a dozen motorbike producers having production of 50,000 units or above are now planning to expand their capacities to cope up with the market demands, sources added.

The producers of two wheelers in the country requested the government to continue supporting the local industry with current policies as with its huge forward and backward linkages, the motorcycle industry moves the wheel of the economy.

Pakistani-made motorcycles are now reaching new horizons exploring markets of neighbouring Iran and beyond the shores to the African continent. The Middle Eastern region has also had some exploratory exports.

At least five more years are needed to help the industry to cement its gains. It needs government support and understanding to maintain the growth momentum and reach that critical point where it can stand with the best in the world.