By Aamir Shafaat Khan
KARACHI, June 15: Two out of three Japanese bike makers have slashed prices of various models aimed at improving their sales volume, which have been on the decline for the last one year owing to rising competition with their Chinese counterparts.
Honda has decreased the price of CD-70 to Rs49,990 from Rs54,000, while CG-125 is now priced at Rs69,990 as compared with Rs71,000. CG-125 Delux model and CD-100 are now being offered at Rs75,990 and Rs59,990 as compared with Rs76,900 and Rs64,000 earlier. Honda CD-70 was priced at Rs68,500 till May 18, 2003 and currently it is available at Rs49,900 showing a decrease of Rs18,510.
Similarly, Dawood Yamaha Limited (DYL) has announced price reductions on June 13. Yamaha YB-100 Royale’s price has been reduced to Rs55,500 from Rs58,500, while the price of YB-100 Junoon four-stroke bike has been slashed to Rs62,800 from Rs63,300. The price of Yamaha YD-100 four-stroke has been decreased to Rs59,800 from Rs61,300. The circular issued by DYL did not mention the reason for the price cut.
The decline in prices made by the Japanese bike makers has nothing to do with any budget related decisions, although the government has imposed one per cent surcharge on all imports, which will lead to increase in prices.
The actual reason for cut in bike prices is to improve the sales for the new fiscal. According to figures provided by Pakistan Automotive Manufacturers Association (PAMA), Honda had sold 360,110 units in 2005-06 but the July-May 2006-07 figures reveal sale of 301,763 units and it may reach 330,000 by end of the current fiscal.
Similarly, Yamaha’s sales during July-May 2006-07 stood at 52,303 as compared to July-June 2005-06 sales up to 74,293 units.
The makers of Suzuki motorcycles have yet to announce any price reduction but the company has shown an improvement in its sales compared with two other Japanese producers. Suzuki sold 24,755 units in July-May 2006-07 as compared to July-June 2005-06 sales of 17,183 units.
The price cut by Honda in its 70cc category will definitely put a pressure on Chinese bike makers, whose prices have been ranging between Rs34,000-39,000. If an average price of Rs36,000 of a Chinese bike is taken then the price gap between Honda and Chinese 70cc bikes, which used to be Rs32,500 in May 2003, has shrunk to only Rs14,000.
A Chinese bike maker said the share of Chinese bikes in Karachi is 85 per cent, while the rest is enjoyed by the Japanese assemblers. However, Japanese bikes are more popular in rural and urban areas of the country. But market reports suggest that they have been losing their sales to Chinese bikes since they have started improving their quality.
He said it was not clear whether Chinese bike makers will reduce prices or they will keep the rates stable as they are already offering bikes at very competitive rates.
Currently, there are 53 units assembling two wheelers in the country (50 Chinese and three Japanese). Total bike production during July-April 2006-07 went up by 12.30 per cent to 681,752 units as compared with 607,084 in the same period of last fiscal.