Assurances needed: ‘Opening road for India may hit our motorcycle industry’
Atlas Honda GM expresses reservations on liberal trade policy .
There are one hundred motorcycle manufacturers in Pakistan out of which 80 are currently producing the bikes. PHOTO: FILE
LAHORE:
An open-door trade policy with India may hit Pakistan’s motorcycle industry due to the former’s more complex laws for foreign entrants, said Atlas Honda General Manager Research and Development Afaq Ahmed.
Talking to a group of journalists, Ahmed said India’s vehicle emission standards are unique and complex, which most foreign players see as a deliberate attempt to discourage imports and penetration in their market.
He added that Pakistan’s laws for foreign entrants are better in comparison as he voiced concerns amid talks about opening trade with India doing the rounds.
“India’s emission standards are capable of discouraging Pakistan’s motorcycle exports even if both countries open the door for liberal trade and this is our major concern,” said Afaq, while showing different production processes of motorcycle manufacturing at Atlas Honda’s Sheikhupura plant.
The company has another plant in Karachi — the older plant from where the company started assembling its motorcycles in the country in 1963.
While Ahmed added that Pakistan’s motorcycle industry was good enough and ready to compete with India ‘not only here but also in regional markets like Bangladesh and Sri Lanka’, he said the concern was whether the country would get a level playing field in liberal trade with India.
He stressed on the need for the Pakistan government to analyse and determine the reservations of the country’s motorcycle industry.
Use of Chinese parts
When asked about the use of Chinese parts in Atlas Honda motorcycles, Ahmed said the company does import parts from China but only from the approved vendors of Honda Japan.
“We do not compromise on the quality of the parts.”
Atlas Honda also claimed that it is producing up to 94% of motorcycle parts in Pakistan and imported the remaining, which are cheap in other countries owing to their economies of scale.
Chinese motorcycle assemblers in the country say Atlas Honda imports many of its parts from China but criticised them when they do the same to assemble motorcycles.
Big players like Atlas Honda believe that most Chinese motorcycle assemblers smuggle parts or save regular government duties through under invoicing and under malpracticing.
Market share and profit situation
There are a 100 motorcycle makers in Pakistan out of which 80 are currently producing motorcycles. Atlas Honda is the largest motorcycle manufacturer in Pakistan and its current market share is 47%.
Atlas Honda, a part of Atlas Group, is financially sound with maker posting a net profit after tax of Rs1.6 billion during the last fiscal year that ended March 2013. This was in comparison to the Rs1.2 billion it made last year. The sales of the company stood at Rs42.3 billion, up 11.3% in the same period compared to previous year’s Rs38 billion.
The company’s current annual production stands at 630,000 units but it is targeting 1 million per year. It recently invested Rs600 million in its production facilities to raise the installed capacity to 850,000 by June 2015, in an attempt to increase from the current 750,000 units per year.
Published in The Express Tribune, December 5th, 2013.
An open-door trade policy with India may hit Pakistan’s motorcycle industry due to the former’s more complex laws for foreign entrants, said Atlas Honda General Manager Research and Development Afaq Ahmed.
Talking to a group of journalists, Ahmed said India’s vehicle emission standards are unique and complex, which most foreign players see as a deliberate attempt to discourage imports and penetration in their market.
He added that Pakistan’s laws for foreign entrants are better in comparison as he voiced concerns amid talks about opening trade with India doing the rounds.
“India’s emission standards are capable of discouraging Pakistan’s motorcycle exports even if both countries open the door for liberal trade and this is our major concern,” said Afaq, while showing different production processes of motorcycle manufacturing at Atlas Honda’s Sheikhupura plant.
The company has another plant in Karachi — the older plant from where the company started assembling its motorcycles in the country in 1963.
While Ahmed added that Pakistan’s motorcycle industry was good enough and ready to compete with India ‘not only here but also in regional markets like Bangladesh and Sri Lanka’, he said the concern was whether the country would get a level playing field in liberal trade with India.
He stressed on the need for the Pakistan government to analyse and determine the reservations of the country’s motorcycle industry.
Use of Chinese parts
When asked about the use of Chinese parts in Atlas Honda motorcycles, Ahmed said the company does import parts from China but only from the approved vendors of Honda Japan.
“We do not compromise on the quality of the parts.”
Atlas Honda also claimed that it is producing up to 94% of motorcycle parts in Pakistan and imported the remaining, which are cheap in other countries owing to their economies of scale.
Chinese motorcycle assemblers in the country say Atlas Honda imports many of its parts from China but criticised them when they do the same to assemble motorcycles.
Big players like Atlas Honda believe that most Chinese motorcycle assemblers smuggle parts or save regular government duties through under invoicing and under malpracticing.
Market share and profit situation
There are a 100 motorcycle makers in Pakistan out of which 80 are currently producing motorcycles. Atlas Honda is the largest motorcycle manufacturer in Pakistan and its current market share is 47%.
Atlas Honda, a part of Atlas Group, is financially sound with maker posting a net profit after tax of Rs1.6 billion during the last fiscal year that ended March 2013. This was in comparison to the Rs1.2 billion it made last year. The sales of the company stood at Rs42.3 billion, up 11.3% in the same period compared to previous year’s Rs38 billion.
The company’s current annual production stands at 630,000 units but it is targeting 1 million per year. It recently invested Rs600 million in its production facilities to raise the installed capacity to 850,000 by June 2015, in an attempt to increase from the current 750,000 units per year.
Published in The Express Tribune, December 5th, 2013.