Motorcycle manufacturers to raise prices to mitigate high input costs

• Motorcycle manufacturers to raise prices to offset high input costs.
• Yamaha, a Japanese motorcycle manufacturer, has raised its prices by up to Rs12,000.
  
• Rising prices are being attributed to rupee depreciation.
  

KARACHI: The motorcycle manufacturers in Pakistan are likely to increase their prices again in the near future to mitigate the impact of high costs of production and a weak rupee, industry officials shared on Thursday.

Yamaha, a Japanese motorcycle manufacturer, has raised its prices by up to Rs12,000, effective February 11, and other manufacturers are expected to follow suit at any time, The News reported.

“We are expecting notification from other bike makers soon,” said Sabir Sheikh, Association of Pakistan Motorcycle Manufacturers (APMA), mentioning, “We get the information from dealers and suppliers, who inform us about potential price hikes.”

According to him, rising prices are being attributed to rupee depreciation, increases in international commodity prices, higher energy costs, and increased freight charges.

The data from the Pakistan Automotive Manufacturers Association (PAMA) showed that bike sales increased significantly from 2016 to 2018, with a slowdown in 2019, a drop in 2020, and a return to normal in the fiscal year 2021.

Except for December, sales increased during the first six months of the fiscal year 2022, which experts attribute to the end-of-the-year phenomenon, in which people delay purchasing in order to purchase a new-year model after the year ends.

Recently, Japanese motorcycle manufacturers – Honda, Yamaha, and Suzuki – have increased their market share against low-cost Chinese motorcycle manufacturers. 

According to PAMA members, the segment has grown over the last 20 years, from 86,000 in the fiscal year 2000 to 1.9 million in the fiscal year 2021. According to government officials, total bike sales in FY2021 will be 2.6 million.

Sheikh added that the data only shows sales of its listed companies and hundreds of small Chinese cheap bikes assemblers weren't listed. “Therefore, the data doesn't fully reflect the actual picture,” he notified, adding that Chinese bikes picked a big pie - of up to 55-60% of the industry till 2020.

However, the rise in motorcycle prices and overall inflation have made it impossible for the income group that previously bought Chinese cheap bikes to do so.

Last year, sales of expensive Japanese brand motorcycles such as Honda, Suzuki, and Yamaha increased, and their market share increased to 60%.

“People, who previously opted for four-wheel, have been forced to go for a two-wheel owing to surging car and fuel prices.”, said Sheikh. He noted that even people who own cars buy motorcycles to reduce their fuel consumption.

“The established companies preempted that sales may go down with increasing prices and rising inflation, which both would reduce buying power,” he added.