Motorcycle dealers demand price cuts

Fight for survival as inflation soars, urge immediate action from assemblers

KARACHI:

Motorcycle dealers claim that sales of motorbikes have fallen by 90% in the local market due to skyrocketing inflation following higher prices of motorbikes. They are demanding that assemblers scale down prices to restore and stabilise sales.

They state that a dealer, who used to sell 100 units, now sells only 10 units. The expenses of his shop, which were Rs200,000, have soared to Rs250,000 per month, including utility bills, wages of workers, transportation fare, rent of shops, and the like.

Dealers are calling for a decrease in Japanese and Chinese motorbike prices to Rs40,000 and Rs20,000 per unit immediately so that dealers can continue running their businesses in the market. Otherwise, showrooms will be shut down in the days to come, they said.

Sharing current prices of motorbikes, they said Japanese brands are being sold at between Rs158,000 and Rs547,000, while Chinese brands also vary from Rs10,5000 to 175,000 for a single unit.

Read: Bike dealers demand price cut as sales slump

“We are tired of urging assemblers to reduce prices to bring buyers into the market. They seem unwilling and attribute higher prices to costly spare parts being supplied and imported by vendors. Despite local currency [rupee] appreciation and a substantial reduction in steel pipes and rebar prices, there is no fall in rates of motorcycles in the market. Today is December 7, and not a single motorbike has been sold since November 30 at my shop. Overall, sales have abruptly decreased by 90% in the market, prompting and discouraging dealers to close down businesses. We are not able to incur expenses for our showrooms even in Karachi, where 30,000 motorbikes were sold per month, and now only 2,000 bikes with all brands, including Japanese and Chinese ones, are being sold these days,” says Karachi Motorcycle Dealers Association Chairman Mohammad Ahsan Gujjar, talking to the Express Tribune.

Motorbike assemblers mention that, giving an example, an assembling company was preparing 100,000 units, and expenditures were Rs100,000 two years back. Each unit used to cost Rs1. The same factory is now assembling 10,000 units after a decline of 90%, and its expenses are Rs100,000. The overhead cost per unit has risen to Rs100.

Expenditures impact the cost of production, they admit, and a 70% decline is being witnessed in the market. They say that maximum volume scales down prices and makes offers, but when the volume is low, the production cost rises. In the current economic situation, there is no possibility of a reduction in prices due to economic and political instability in the country.

Published in The Express Tribune, December 8th, 2023.

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