The industry wide lull that has settled in the automotive industry has now spread to its two and three wheeler counterparts as well, with sales sliding down by 7 percent for motorcycles and by a good 16 percent for rickshaws and Qingqis, going back two years when the sector first started to take off. In fact, the growth in the motorcycle segment really kicked in on the entry of three new players—Road Prince, United Motors, Yamaha—during FY15 together grabbing a substantial market share since their launch. Other players, aside from Honda, slipped into the background while Hero Motors and Habib exited the market.

Entries and exits notwithstanding, by FY17, over 4200 new two-wheelers were hitting the roads of Pakistan daily which grew to 5100 by FY18. Still today, new motorcycles sold on daily average are 4700 units which are still significant. These numbers are still separate from the motorcycles sold in the secondary market. The ratio of new to old bikes bought by consumers is 60:40 and the recent decline is likely to have impacted both markets.

Because of their ability to maneuver large traffic and terrains, motorcycle demand has been strong in the rural and the growing urban areas alike, especially during times when incomes for individuals were rising and inflation was at bay. However, the trend is solely reversing for multiple reasons. The first is increase in prices. Though locally assembled motorcycles are significantly localized, rupee devaluation has hit them as well as some parts and commodities are imported by both motorcycle makers and domestic parts makers. This has propelled motorcycle makers to raise prices.

Despite the fact that many players offer options at easy installments and zero mark-ups, the incremental monthly burden may be too much to absorb for folks with already tightening purse strings and reducing purchasing power. Motorcycles are usually bought by the low income to mid income consumers who feel the brunt of higher inflation and economic slowdown the most.

The decline in rickshaw sales has been similar, if not worst. In the upcoming months, it is possible that rickshaw and motorcycle drivers will delay their decisions to replace their vehicles if they were planning, and new buyers will likely hold onto their savings for a rainy day.