Bike manufacturers in Pakistan have started regaining lost ground in international markets. After a steep drop in exports of around 135 percent from a peak of $3.5 million in 2009-10, the industry has registered a remarkable recovery during the four months ending July 2011, according to statistics available here on Monday. Industry sources confirmed that during these four months--April to July 2011--the industry exported in excess of 2,500 units per month.
This was against an average export of around 1,200 units per month last year. If the trend continues, Pakistan may easily be able to double its motorcycle exports this year. High quality and low prices of locally produced bikes have effectively checked imports and now the industry is making its mark in the international markets. Exports picked up appreciably in the last four months to 10,500 units.
Motorcycle exports stood at $786,310 in the year 2009-10 and surged to $3.5 million in the following year on the strength of $50 per unit Research and Development facility provided by the government of Pakistan. The facility was, however, withdrawn in 2010-11, with the result that exports nose-dived by 135 percent to $1.34 million, sources said.
"The decline in exports would have been much higher but for the prudent marketing strategy adopted by large motorcycle players," said Fahad Iqbal, CEO of Ravi Automobile Pvt Ltd, a manufacturer of motorcycles. He said that the exports of motorcycles averaged over 2,500 units during last four month,s which is a good omen for the industry. "This", he added, "is double the monthly export of 1,200 units in 2009-10, when record exports were witnessed." He said that the trend is expected to continue and Pakistan would easily be able to double its motorcycle exports this year.
Last year, exports experienced a steep decline after a major policy shift by the government when the Research & Development (R&D) facility was withdrawn from the motorcycle industry. Experts from the industry said that this massive recovery by motorcycle exports was testament to the resilience of this sector. The progress the sector has made over the last ten years, or so, is proof that Pakistani entrepreneurs can compete with the best in the world, if consistent policies are in place.
Exports from Pakistan are textile-dependent for the most part. Motorcycle industry provides a viable option as the next emerging export from Pakistan. "The industry is aiming to export half a million units annually by 2016," another manufacturer said. "In export markets, success builds on itself, especially motorcycles, where establishment of an after-sale service network and that of a secondary market creates the ground for a successful brand. Growth in sales will multiply as brands get established."
Consistency is the key to success in this industry. ''Now on Now Off"''policy is the most destructive thing that can be done to this nascent but most promising export of the country, he added. Manufacturers pleaded that the current policy regarding motorcycles should not be disturbed as, with its huge forward and backward linkages, the motorcycle industry moves the wheel of the economy. High employment creation and technology transfers make it an ideal sector for a country like Pakistan.
Growth in this sector means that upstream businesses such as parts making in industries like steel, rubber, electronics, plastics, etc also get a boost. Investment comes in, and jobs are created in all these industries. Similarly, this industry pushes up investment and creates additional jobs in downstream avenues like motorcycle dealerships for new and old bikes, repair and maintenance workshops and spare parts businesses. The multiplier effect of this industry is huge.
"Most serious threat to this industry is a sudden policy shift, and threats for that are abundant nowadays," industry sources said. "Talks of commercial imports of motorcycles and change in tariff to suit a certain entity will wreak havoc on this industry" manufacturers say, while demanding of the government not to disturb the growth momentum of the most localised engineering industry in Pakistan.