Two-wheelers too expensive

Motorcycle industry is also in for shakeup in coming months as more locally-made electric bikes begin to hit market

The impact of inflation and economic disarray on commuters has become even more pronounced as two motorcycle manufacturers have raised their prices, putting even entry models beyond the budget of many people. Manufacturers had already been hiking prices for most of last year, as the crashing rupee pushed up the prices of imported parts. Other factors were also at play, including rising energy costs and erratic market behaviour with regard to supply availability and demand consistency.

Meanwhile, new mid-quality motorcycles, which were often the first bikes purchased by many middle-class youngsters, now cost as much as reliable used cars did a few years back. Import restrictions have also seen sales of Chinese motorcycles wiped out due to lack of supply — about 1.6 million Chinese bikes were sold in the year before Covid-19 hit, or about 60% of total sales, compared to barely 300,000 in the last year. Meanwhile, Japanese-branded bike manufacturers were able to keep sales going, but they have also seen prices rise by as much as 44%.

A positive may be the fact that the motorcycle industry is also in for a significant shakeup in the coming months as more locally-made electric bikes begin to hit the market. Several quality offerings will affect the behaviour of wealthy and middle-class motorcycle enthusiasts. However, only a few offerings are available for the lower end of the market, and while electric bikes have almost no operating cost, the higher purchase price may still put off lower-income shoppers unless the manufacturers and government can arrange for friendly purchase terms.

Shifting to electric bikes may also have significant long-term benefits for the broader economy, as it would reduce demand for petrol and other related running expenses that rely on imported oil. While the government may not appear to have cash to spare, facilitating first-time buyers and transitioning existing bikers to electric options will easily pay for itself in a few years.

Published in The Express Tribune, January 16^th, 2024.

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