KARACHI: Indian auto products are likely to hit the local market earlier next year when the Indian giant Bajaj Auto starts assembling motorcycles and rickshaws in Lahore in a joint venture with a local partner.
An auto industry source said Pakistan’s Saigol Group has finalised almost all formalities of the agreement, which is expected to be signed January next year.
“According to the deal Saigol will start assembling Bajaj products in February,” said a source privy to the deal between the two auto groups. “By the end of March or early April most probably you would get Indian bikes in the markets.”
He said the Saigol Group would initially assemble completely-knocked-down kits imported from India and later, as political relations improve, the Indian Bajaj would set up a manufacturing facility in Pakistan. “But it is too early to comment about the set up of the plant,” the source said. “It is not part of the agreement. It totally depends on political and regional situation.”
Bajaj Group is amongst the top 10 business houses in India. The group’s operations stretch over a wide range of industries, spanning automobiles (two-wheelers and three-wheelers), home appliances, lighting, iron and steel, insurance, travel and finance.
The group’s flagship company, Bajaj Auto, is ranked as the world’s fourth largest two and three-wheeler manufacturer and the brand is known in over a dozen countries in Europe, Latin America, the United States and Asia. Both partners, Bajaj and Saigol, have initially agreed to assemble two and three wheelers vehicles in the country but plan to expand operations as the venture grows.
Big demand: “Currently, there is a big demand of both two-wheelers and three-wheelers in Pakistan,” said the source. “If all goes well, it is estimated that the Saigol will be able to sell 20,000 to 30,000 three-wheelers vehicles in two to three years.”
Similarly, he said that two-wheeler sales’ range may touch between 50,000 to 100,000 units in two to three years.
The Saigol Group is currently in a joint venture with Chinese firm Qingqi to make two and four stroke motorcycles and three-wheelers rickshaws. For the last three years the group involved in producing QM 125, CD 100, Crown Open Trolley, Crown Kinetic, Spider Chassis and Qingqi Rock and Rickshaw Millennium.
Market players said the entry of Indian product would further cut prices of motorcycles, which fell by over 25 percent in the last one and a half year. “Currently Chinese bikes are used to sell maximum at Rs 35,000 to Rs 40,000,” said Muhammad Sabir Sheikh, chairman All Pakistan Motorcycles Dealers Association. “The Indian Bajaj we hope would demand prices at the same level or may be even lower.” But he said the Indian products are much better in quality compared to the Chinese as they are produced at almost the same Japanese technology.
The industry source said recent development between two groups emerged after the Indian industry last month showed interest to strike deals with Pakistani auto firms to initiate joint ventures.
“India’s SIAM (Society of Indian Automobile Manufacturers) last month sent a letter to PAMA (Pakistan Automobile Manufac-turers Association),” the source said. “Currently Indian industry plans to hold auto exhibition in Pakistan and wants to keep the things moving in positive way.”
He said PAMA is actively considering the SIAM’s proposal to organise a joint automobile show in Lahore in December, which would feature display of all ranges of vehicles and products, alternative fuel and technologies.