Sales of cheap bikes drop, but sales of expensive bikes increase – Journal
KARACHI: Surprisingly, sales of cheap motorcycles have declined in recent months, but sales of locally assembled foreign motorcycles have increased, despite soaring food inflation and utility bills.
Prices for locally assembled Japanese and Chinese bikes have been hiked several times this year, but it is the low-cost bikes that have been hit as sales of expensive bikes have not been affected.
Atlas Honda Limited (AHL) broke its own sales record as many Chinese motorcycle assemblers struggle to regain lost ground.
AHL recorded the highest monthly sales of 128,503 units in November, surpassing its own record of 125,031 units sold in October.
During the July-November period, AHL sales reached 563,575 units compared to 512,010 in the same period last year.
During the five-month period, sales of locally assembled Japanese Suzuki and Yamaha bikes reached 14,915 and 9,962 units compared to 8,719 and 8,733 units last year, registering an increase of 71% and 14%, respectively.
Sales of Chinese bicycle assemblers Road Prince and United Auto Motorcycle plunged 23% and 20% to 52,289 and 136,812 units, respectively.
Sales of Ravi bicycles fell 53% to 1,810 units compared to 3,879 units.
Industry and market players have different views on the changing trends in the cheap and expensive two-wheeler market.
Sohail Usman, Chairman of Road Prince Motorcycles Group, said a number of Chinese motorcycle buyers have certainly turned to Honda 70cc motorcycles, as evidenced by their record sales in November.
He said buyers in urban areas, whose incomes have declined and are receiving low wages, have stayed away from buying Chinese bicycles even at low prices due to affordability concerns.
In addition, the competition among Chinese bicycle assemblers has intensified due to which the quality maintained by them has suffered, he said.
Mohammad Sabir Sheikh, a reseller on Akbar Road in Karachi, said soaring food prices and utility bills had hit low-income and middle-class buyers hard, whose first choice was consumers. Chinese bikes assembled locally due to their low prices. In recent months, however, these buyers have slowed down the purchase of two-wheelers.
He said producers / farmers in rural areas prefer to buy Honda bikes rather than Chinese brands. Due to better crops and good crop prices, the farming community mainly turned to buying expensive Japanese bikes, especially Honda.
Mr Sheikh said total bicycle production in FY 22 will remain lower given declining demand for Chinese bicycles, but the current fiscal year will end with increased production of assemblers. of Japanese bikes.
He believed that a new trend was emerging where owners of expensive cars also bought Japanese bikes instead of Chinese bikes. This creates additional demand for Japanese branded bikes.
According to large-scale manufacturing data, the country’s bicycle production in July-October 2021 fell 5% to 769,802 units from 807,230 units in the same period of the previous fiscal year. In October 2021, production fell 13% to 192,450 units from 221,655 units in October last year.
Mr Sheikh said Chinese bikes with a capacity of 70cc have become more expensive, dropping from Rs 41,000 to Rs 69,000 two years ago, followed by Honda 70cc bikes at Rs 94,500 against Rs 65,000.
The Honda CG-125 is now available for Rs 152,500 against Rs 108,000, while the Suzuki 150cc sells for Rs 232,000 against Rs 168,000. The Yamaha 125cc motorcycle is sold at Rs 190,000 now, against Rs 132,000 there two years ago.
Some Japanese bicycle assemblers have said that in reality buyers of new Chinese bikes are people who owned used motorcycles but are now trying to switch to new units. However, the decline in purchasing power does not allow them to own even a new motorcycle at a low price compared to the Honda CD70cc.
They said that people’s mindsets have also changed a lot since last year, as many people with enough cash on hand prefer expensive Japanese bikes.
The benefits offered by a number of Japanese bicycle dealers are also proving to be a factor in urban areas. Dealers charge buyers 50,000 to 70,000 rupees in advance and ask them to pay the rest of the money in monthly installments with a small interest, they said.
Buyers interested in long tours also buy 125cc-150cc electric motorcycles. This trend gained momentum from Rawalpindi. Buyers in Karachi and Lahore also buy such bikes because of better suspension and engine performance than Chinese heavy bikes, they added.
They said Chinese bicycle buyers wanted a unit for around Rs 40,000. Today, these buyers are reluctant to invest in it after their prices have risen significantly.
Posted in Dawn, le 19 December 2021