Bike exports poised to open new revenue stream

Pakistan’s motorcycle industry is standing at a point where a significant breakthrough in global markets could open a new export revenue stream for the country, which is starving for dollars.

As per market experts, the two-wheeler industry is now strong enough, with consistently improving quality, added features and models introduced over the past few years as well as competitive pricing, that it could easily make inroads into regional markets, at least.

“By strategically targeting emerging markets and addressing key challenges, Pakistan can establish itself as a remarkable player in the international arena,” said an industry expert.

Pakistan’s motorcycle manufacturing sector has experienced substantial growth over the past decade. Local companies such as Atlas Honda, Pak Suzuki, Yamaha and United Motorcycles have ramped up production to meet domestic demand, which now exceeds two million units annually.

This expansion has positioned the country as a potential exporter, ready to tap into international markets.

At present, exports of two-wheelers are insignificant and to expand the international footprint measures like enhancing brand recognition, ensuring compliance with varying international regulations and establishing robust distribution networks are essential. Furthermore, competition with established international brands requires continuous innovation and improvement in product offerings.

Currently, Atlas Honda is leading exports of motorcycles, but they constitute only around 1% of its total production.

The domestic market too is confronting challenges where bike sales are declining, thanks to the persistently high inflation.

The farming community, which is the largest buyer of motorcycles in Pakistan, has been under pressure since it has not been able to fetch a good return for wheat harvest. This has hurt domestic sales of motorcycles, experts said.

According to the Pakistan Automotive Manufacturers Association, in first nine months of financial year 2023-24, sales of two and three-wheelers came in at 1.06 million units, nearly 4% less than the corresponding period of last year, when sales stood at 1.104 million units. In this backdrop, the industry needs to enhance exports of motorcycles, which requires the attention and support of the government.

“India is a much bigger economy than us, but we should learn how its government is supporting the industry by offering special rebates. This has resulted in exports of 3.458 million two-wheelers from India in FY24. These shipments constitute nearly 1.5 million units more than the installed capacity in Pakistan,” the expert revealed.

Currently, nearly half of Pakistan’s installed production capacity for two-wheelers is standing idle because the country is not even exporting 1% of India’s export volumes.

Experts termed export volumes too low keeping in view the capacity and production quality of Pakistani motorcycles and scooters.

They pointed out that several regions were presenting lucrative opportunities for motorcycle exports from Pakistan. In Africa, countries like Nigeria, Kenya and Tanzania are seeing rapidly growing motorcycle markets due to increasing urbanisation and a rising middle class.

Similarly, in the Middle East, Iran and Iraq have significant demand for affordable and durable motorcycles. South Asian nations, including Bangladesh and Sri Lanka, also represent potential markets owing to cultural and economic similarities.

The experts asked the government of Pakistan to play a pivotal role in promoting motorcycle exports by giving priority to policies aimed at encouraging manufacturing such as tax incentives, subsidies, reducing the cost of doing business and rationalising energy tariffs.

Additionally, initiatives like the “Look Africa” policy should promote the deepening of trade relations with African states, which are also potential markets for Pakistani motorcycles.