A domestic issue may have less consequences but a global issue damages every run of life and this Covid 19 is a global pandemic sadly. Increasing rapidly this pandemic is disturbing almost every economy and every run of life.
Pakistan is termed to be a developing economy and things were quite promising, at least i would like to little optimistic over here because the increasing number of foreign brands who were interested to invest and perform business operations in Pakistan was looking promising.Brands like VW, RENAULT and numerous chinese manufacturer were deeply interested in manufacturing and selling their vehicles in Pakistan.
Due to lockdown almost every business is at halt and in an economy like Pakistan where growth is very slow and contraction is very rapid, this situation is not good. Specially when motorcycles are not very important to save life and neither they are a fast moving consumer good.
I have some really valid reasons to share with you guys which will help in understanding how our motorcycle industry works and why the prices will increase.
Dependence on Import:
Our majority manufacturers are dependent on importing CKD parts and assembling motorcycles over here. Motorcycles like Suzuki,Honda and Yamaha use this in most of their motorcycles and so do many other chinese manufacturers like SUPER ASIA etc.
The local chinese motorcycle manufacturers mentioned corona virus issue in increase of CKD cost and hence had to increase the prices.
Dealerships Closed Down:
These days majority of dealerships are closed down and because of that their is no business, no transactions and no economic benefit to everyone. After lockdown the combined overheads will act as a burden on heads of dealership owners and they will also face a difficult time in selling motorcycles. We can make exception for small cc motorcycles over here but bikes like CBF,YBR,GR will definitely be a tough sale.
Pakistan is one of those countries where business man conducts major business on credit, be it motorcycles or any other product the company gives credit to the businessman. Businessman sales the product and returns the credit minus his profit. Currently almost all the firms have blocked a lot of their credit in the market and the interest on loans is adding up. For speedy recovery the prices will be revised after the pandemic ends.
So what to do? The good way to handle this situation will be encouraging leasing facilities and promoting easier ways to get motorcycles like buy back or exchange facility. Its about time that companies have to go a little further and facilitate the consumers to make some money.
The automotive sector of our country is very immature and had very odd response behavior, its expansion is very slow and contraction is very rapid.This pandemic will effect badly on the slowly thriving market. I guess its going to be same old 70cc’s for a longer time period now!