There are one hundred motorcycle manufacturers in Pakistan out of which 80 are currently producing the bikes. PHOTO: FILE
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.
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COMMENTS (19)
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in Pakistan atlas honda is producing 6,30,000 bikes per annum but other 80 assembling units producing more than 1.25 million units in a year , Now our new Govt. allowed YAMAHA Japan to start production again in Pakistan . it will encourge new models range in our country . and usefull for entire auto industry
@Naresh: Read the article properly it clearly stated "The company’s current annual production stands at 630,000 units but it is targeting 1 million per year". The total production of two wheelers(including Atlas Honda) in Pakistan in the year 2013 was 2 million(20,000,000) or 20 lakhs, and not the figure you have quoted.
www.motorcycleexport.com kindly read fresh articles on our web site
Atlas Honda has a superior quality compared to all other bike makers in Pakistan. With strong brand name and good financial health, it can compete with any new foreign player of this region.
MFN is not a real problem as it will increase competition in this region. What is important for Government of Pakistan is to at least give a breathing space to local industry so that it can continue to give employement to local people.
@abd: Well I don’t know what policies India adopted to get things right but I do know what policies have failed in Pakistan and protectionism is one of them. You are wrong about imported cars. 90-95% of the cars and motorcycles sold in Pakistan are locally assembled. Our assemblers are backward because of a lack of foreign competition. Protectionism has spoiled them. They need a kick in the pants. . Just Assembling cannot be counted as an "Industry". Assembling is a start of the Industry. In 5-6 Years one should be able to Manufacture at least 50% and may be be up to 90% by the end 10 Years. . General Motors had an Assembling Plant in India. They would not make a start to Manufacture the Parts in India. The Government of India told them where to go and General Motors transferred Assembling Chevrolet Cars Plant to Chittagong. Later on they closed down the Chittagong Assembly Plant. . India on the other hand supported the Progressive Manufactures of Buses, Cars, Motor Cycles-Scooters, Tractors, Trucks etc. . In the Financial Year April 2012 - March 2013 India MANUFACTURE 20,626,227 Automobiles which comprised of 554,686 Cars and 1,960,941 Two Wheelers with a Total Number of Automobile Exports was 2,898,659. PAKISTAN HAS A TOTAL OF ABOUT 11,000,000 AUTOMOBILES ON THE ROAD. Pakistan Assembled about 136,000 Cars, Two Wheelers including Rikshaws, Buses, Trucks, and LCVs in July 2012 - March 2013. Thus the Annual Number of Automobiles Assembled would be about 181,000 Automobiles in a Full Year 12 Months Period. . Cheers
The bikes in the picture remembers us for 1980's in indian road.
@ netizen
What you thought is history now...Thanks to ET you're enlightened now..Cheers!
Sorry Atlas Honda, just for you India is not going to reduce their emission standards. You need to improve your technology. India has real Honda which operates without any partners, you think you can compete with them?
PS. The bikes shown in the article look like they came from 80s. In India those kind of bikes are long gone, you cannot even find pictures of them. Atlas honda makes low quality bikes and charges Pakistani consumers highly for them. No wonder they dont want competition from India
@LaLakiMKaa
Very impressive I must say, your manners of speaking in a public forum are epic!
By the way where did you learn these manners?school or family tradition? I do apologize for being a little curious...
@SK: Well I don't know what policies India adopted to get things right but I do know what policies have failed in Pakistan and protectionism is one of them. You are wrong about imported cars. 90-95% of the cars and motorcycles sold in Pakistan are locally assembled. Our assemblers are backward because of a lack of foreign competition. Protectionism has spoiled them. They need a kick in the pants.
look at motorsycles shown in picture..i wont even spit at them....
come on . Lets stop fighting ,. We export automobile to you and you export your textile here. Let's have a fair business .
Motorcycle market in India is rather huge, with foundations deep rooted in smaller cities compared to metros. Besides the local manufacturers such as Bajaj,Mahindra,TVS,Hero etc. India has hosts of Foreign brands manufacturing selling and exporting motor bikes in india. These include the regular honda, yamaha, suzuki etc. and the new entrants like BMW,ducati,harley and such. Foreign brands have arrived to participate in the lucrative two wheeler sector in india which will reap them huge benefits. In return the govt. of india is right in demanding certain emission standards from them along with other standard such as safety. There are some minimum requisites to be complied with. If these were discouraging in any manner the foreign inflow would not have been so good. As many as 15 foreign brands are operational at the moment. The standards and opportunity are same for atlas as for anyone other brand. IInfact i thought they would appreciate emission standards on millions of bikes as they seem to be so concerned about the environment hazard caused by a few hundred indian soldiers on siachin glaciers.
try to explore new markets in Afghanistan and Africa. surprisingly Indian products are abdundants here and Pakistanis are totally missing except Shan masalas at some places.
Atlas Honda knows where it lacks. Indian Motorcycle industry has a big variety of model present in market and are locally produced, while Atlas Honda has not even introduced new shapes while technology is another question. India has more technology available too, to throw in the market.
With 5 lakh cars and 2 million Motor Cycles and Scooters being exported from India (2012-13) world wide (accept to Pakistan) one can understand the "anxiety" of competition from India to assemblers of CKD and SKD kits in Pakistan. But obviously the Pakistani consumer is being taken for a ride. All through the last six decades Pakistan took the short cut and imported cars and everything else and did not build its manufacturing base. Pakistani roads with imported cars certainly looked more modern than Indian ones with domestically manufactured Ambassadors. But in the interim India built up its domestic industrial and technological base in a protected market. Hence it was prepared for the winds of Globalisation in the '90s and started becoming a powerhouse (still far behind China). If Pakistani manufacturers want protection to build up their R&D and manufacturing then they appear to be 3-4 decades late in waking up. SK Mumbai
Now this is brilliant: Because of Atlas Honda Pakistan should not have friendly relations and free trade with India. Wah Honda Atlas wah
"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." If India applies the same standards to everyone else, including its local manufacturers, there should be no complain. India may be somewhat lenient on older models manufactured by its local companies, but same standards should apply to all others, including newer models manufactured by its local companies.