Motorcycle travails: Buyers unable to register new bikes

Company’s failure to renew Excise licence becomes a buyers’ headeaches.

LAHORE:

The failure of one of the country’s largest motorcycle manufacturers to renew its registration with the Excise and Taxation department has caused the government to stop registering new Honda motorcycles, inconveniencing many of the company’s new customers and likely to be costly for the firm in terms of future sales.

Automobile manufacturers in Pakistan are required to renew their registration with the Excise and Taxation Department every year in order for their vehicles to be legally sold. Atlas Honda had been renewing its licence regularly, but for some reason, was unable to do so this year. The licence expired three days ago, at which point the government stopped accepting applications for new registrations of Honda motorcycles.

“Yes, we have stopped accepting the registration of Hondas because the company’s licence has not been valid for some time. This is all I can share,” said Sarwar Awan, an officer at the Motor Registration Authority.

The failure of the company to register is likely to prove costly, since the pre-Eid season typically constitutes peak time for motorcycle sales.

“This is a big and well-run company. You do not expect such things from them,” said Haneef Ahmad, a salesman for a multinational firm who was told by the Excise Department that they would not register his new motorcycle because of an error made by the manufacturer. When contacted by The Express Tribune, Muhammad Nasrullah, a service engineer at the company, said: “We know the problems faced by our customers but this is an isolated case in our 48-year history. Our senior management has completed the required procedure and the problem should go away in a couple of days or so.”

The company sold over 570,000 motorcycles in the financial year ending June 30, 2011, according to the Pakistan Automotive Manufacturers’ Association. That accounts for over 68% of the total motorcycle market in the country. The company has been doing well in recent years. Revenues were up 27% in the year ending March 31, 2011, to Rs32.5 billion. Profits also grew at a healthy clip of almost 41% to Rs1 billion.

The company’s stock closed at Rs114.30 on Friday on the Karachi Stock Exchange, down 8.5% since the beginning of the calendar year.

Published in The Express Tribune, September 3^rd, 2011.