Pakistan heading towards self-reliance in motorcycle parts

Government-run organisations, related to heavy engineering, have started work on the project of manufacturing parts previously imported at the local level to bail out the motorcycle industry from crisis. Under the plan at an initial level, spare parts, including engine, gear and clutch of 70cc motorcycles, will be manufactured. This will not only help save more than Rs1 billion in foreign exchange that is spent on the import of motorcycle parts from Japan and China every year, it will also help Pakistan export these parts by reducing manufacturing cost to third-world countries especially those in Africa. Work on the project is being launched with the consultation and cooperation of the motorcycle industry to achieve the target of 100 per cent production of motorcycles inside the country so as to do away with the dependence on imported parts for Chinese technology-based motorcycles. With the cooperation of the Engineering Development Board working under the Ministry of Industries and Production, work on production of motorcycle parts including engine, gear and clutch has started at the plants of Pakistan Engineering Company in Lahore and that of Pakistan Tools Factory in Karachi. At an initial level, parts of 70cc motorcycles like crank cases, crank shaft, covers and gears have been made, whereas piston and clutch are also being manufactured. Taking benefit of the technical expertise of the heavy engineering organisations of the country supply of 30 per cent parts of the engine has also been started. Whereas 70cc engine for the motorcycles will be supplied to the market after being improved. For the success of the project and for achieving the desired results, the process of consultation and decision-making has completed between the heads of the two heavy engineering organisations and the motorcycle industry. Members of the motorcycling industry, while expressing interest in the project, have also assured the two organisations that the industry will purchase locally-manufactured parts even if they are costly. According to experts in the motorcycle industry, at present 70 per cent body parts of Chinese-manufactured motorcycles are available in the country, whereas 30 per cent of the engine and the other parts are being imported. The production of engines at the local level will reduce the import bill besides ensure supply to the local industry. Those associated with the motorcycle industry are of the view that in spite of the presence of engineering organisations in the country the industry was comparatively lagging behind as compared to other nations in the region. All over the world more than 100 different models of motorcycles are available. Only in India 50 different models of motorcycles are being manufactured. In Pakistan, on the other hand, only three models are assembled and sold. The 70cc motorcycle that is the most popular in Pakistan is not in use in the rest of the world so it cannot be exported to any country. The start of production of parts in the government engineering organisations will also help in the production of newer models of motorcycles. This will in turn help Pakistan find a place in the motorcycle industry in the international market. According to those associated with the motorcycle industry the motorcycle assemblers import parts and engines from China to fulfill the requirements for a three-month period. This also blocks their working capital for a period of three months. With the production of engine and other parts at the local level the shortage of capital will also reduce. Those associated with the industry said last year one million motorcycle parts and 0.6 million complete engines were imported at a cost of more than Rs1 billion. Sources say that an increase in prices of Chinese and Japanese motorcycles is being noticed because of increase in taxes on the raw material, gas and electricity. According to motorcycle assemblers at the local as well as international level, the production cost of motorcycles has increased by some 50 per cent due to increase in prices of raw material, steel, rubber; gas, power and charge of other utilities. According to the Chinese-manufactured motorcycle assemblers the motorcycle industry is passing through the worst kind of crisis in the last eight years and that a clear decrease in the sale of motorcycles was recorded. The main reason was the decline in the purchasing power of consumers. During the last fiscal year, 2007-08, 1.058,339 million motorcycles were produced. But during the current financial year a decrease of 30 per cent was observed. According to an estimate the sale of motorcycles is expected to stay around 0.8 million units by the end of current year. By starting complete production of motorcycles at the local level Pakistan can export these motorcycles to countries like South Africa, Bangladesh, Sri Lanka, etc. and earn valuable foreign exchange.

source: http://www.weeklypulse.org/pulse/article/2891.html