Pakistan's Growing Middle Class Drives Motorcycle Sales Boom

[Riaz Haq]

Pakistan's fiscal year 2015-16 saw production of motorcycles soar to a new high of over 2 million units. This represents a 16.5% surge from last year.  At the same time, passenger cars and light trucks sales rose to over 200,000 in fiscal 2016, a 20% jump over the same period last year.

Motorcycle Sales:

Rising motorcycle sales in Asia's developing nations like Pakistan are seen as a barometer of expanding middle class. It is, in part, attributed to rising incomes and availability of bank financing at historic low interest rates in the country.

As many as 2,071,123 motorcycles were manufactured during July-June (2015-16) compared to 1,777,251 units during July-June (2014-15), according to the latest data released by Pakistan Bureau of Statistics (PBS) and reported by Pakistani media.

Pakistan is the World's Sixth Largest Motorcycle Market

Car Sales:

In addition to the double digit increase in motorcycle sales, Pakistan also experienced 20% jump in sales of passengers cars, light commercial vehicles (LCVs), vans and jeeps. The total sales of local vehicles increased by 21% to 216,568 as compared to 179,953 units sold in FY15, according to industry data.

Auto Parts Industry:

Rising auto and motorcycle sales are helping boost Pakistan's auto parts industry as well. “We are getting orders and the pace is increasing,” said Sultan and Kamil International CEO Faisal Mahmood speaking to Pakistani media on the sidelines of the 12th Pakistan Auto Show 2016 held at the Lahore International Expo Centre. Mahmood’s company makes more than 350 automotive parts and exports to all major automobile markets in the world.

Other Growth Industries:

Among other industries seeing significant growth are pharmaceuticals (6.54%), cement (17.01%), chemicals (8.13%), non metallic mineral products (10.02%), fertilizers (13.81%), leather products (7.76%) and rubber products (7.16%), according to media reports.

Summary:

Pakistan's economic recovery is in full swing with double digit growth in multiple industries, including auto, pharma, chemicals, cement, fertilizers, minerals, etc.  It is expected to pick up steam over the next several years with new investments on the back of China-Pakistan Economic Corridor related projects.

Related Links:

Haq's Musings

Growing Middle Class in Pakistan

Rising Energy Consumption

China-Pakistan Economic Corridor

Pakistan's Thar Desert Sees Development Boom

Gwadar vs Chabahar Ports

[Riaz Haq]

Two bike makers of Pakistan, Atlas Honda Limited and United Auto Motorcycle broke all previous production and sales records in August. 187,249 bikes were sold in July-Aug 2017-18 in comparison to 136,476 units in 2016-17 by Atlas Honda Limited.

Similarly, production and sales in May 2017 were 90,800 and 93,060 units while in August 2017 it was 95,200 and 91,599 units.

United Auto Motorcycle also made new records as its production and sales surged to 35,555 and 36,084 in August 2017 in comparison to its previous record in November 2016 of 32,773 units.

In July-Aug 2016-17 the sales by UAM were 49,464 while this year during same period UAM sales increased to 67,023 units.

Moreover, statistics by Pakistan Automotive Manufacturers Association confirmed that Road Prince Bike Assembler also made record production of 23,650 units in Aug 2017 compared to its last record of 19,508 units in October 2016.

Other than this sale of Honda Civic/City, Suzuki Swift and Toyota surged from 5,295, 689 and 8,250 units during July-August 2016 to 7,766, 722 and 8,657 units this August 2017. Sales of Suzuki Cultus and Suzuki WagonR climbed up from 2,190 and 2,352 units to 3,670 and 4,137 units. Similarly, Suzuki Mehran and Suzuki Bolan sales increased from 5,676 and 2,865 units to 6,826 and 3,224 this August 2017.  Trucks, Jeeps, Vans, Tractors sales also showed a considerable rise from the previous year.

CPEC played a significant role in high sales of trucks and other vehicles.

https://www.researchsnipers.com/bike-makers-break-previous-producti...

[Riaz Haq]

#Pakistan large scale manufacturing posts 4 year high growth of 12.98% in July 2017 | http://thenews.com.pk

https://www.thenews.com.pk/print/231581-LSM-posts-four-year-high-gr...

Karachi: Large scale manufacturing sector posted a four-year high growth of 12.98 percent year-on-year in the first month of the current fiscal year on infrastructure-driven boom and growing auto demand.

Pakistan Bureau of Statistics (PBS) data on Thursday showed that iron and steel production climbed 46.36 percent in July over the same month a year ago, followed by automobiles (42.56pc) and non-metallic mineral products (37.95pc).

LSM output increased 12.78 percent in September 2017 over the same month of 2016. PBS statistics revealed that production of billets soared more than 74 percent YoY to 476,000 tonnes in July.

Production of tractors more than doubled to 5,087 units in July 2017 from 2,067 units in July 2016, while output of trucks, jeeps and cars, light commercial vehicles and motorcycles increased 24.4 percent, 55.75 percent, 16.03 percent and 26.46 percent, respectively.

Other sectors that recorded growth in July included engineering products (21.95pc), food, beverages and tobacco (19.02pc), pharmaceuticals (11.14pc), paper and board (11.23pc), wood products (10.95pc), chemicals (5.13pc), coke and petroleum products (4.87pc), rubber products (4.51pc), leather products (2.52pc) and textile (0.43pc).

Fertiliser and electronics sectors, however, recorded a flat production in July over the corresponding month a year ago. Large scale manufacturing grew 4.36 percent in July over June, according to PBS.

Industrial production grew 5.02 percent in the last fiscal year of 2016/17. LSM, accounting for 80 percent of the industrial sector’s 10 percent share in GDP, posted a four-year high growth of 5.6 percent in the fiscal 2016/17. Government set LSM sector’s target at 5.7 percent for FY2018.

Infrastructure development boosted demand of iron and steel products as well as cement, which are the key industries in the country. Auto sales have also been growing in the recent past as demand of heavy vehicles in China-funded development projects, uptake of passenger vehicles and rising sales of tractors for recovering agriculture sector speeded up production in the industry.

The bureau logs trend of industrial sector on the basis of statistics from Oil Companies Advisory Committee (OCAC), ministry of industries and provincial bureaus of statistics. Ministry of industries track production trend of 36 products, Oil Companies Advisory Committee monitors 11 oil, lubricant and petroleum products and provincial authorities measure output of 65 items nationwide.

OCAC registered a 4.87 percent YoY growth in July and edged up 2.51 percent month-on-month. Production of liquefied petroleum gas surged 75.5 percent YoY to 56.29 million litres. Kerosene oil output soared 66.5 percent to 14.78 million litres in July.

Diesel production soared 41.33 percent to 2.15 million litres, while motor spirits output increased 14.6 percent to 237 million litres in July. Ministry of industries recorded a growth of 16.66 percent YoY and 8.09 percent month-on-month, said Pakistan Bureau of Statistics.

[Riaz Haq]

7,500 new #motorcycles hit roads daily in #Pakistan. Production reached 2.3 million motorcycles in 10 months. Up 22.34% in 4 months

https://dailytimes.com.pk/179824/7500-new-motorcycles-hit-roads-dai...

KARACHI: Motorcycles production in Pakistan is reaching to its highest level with 2.3 million quantity of produced during the ten months of 2017 while average 7,408 new motorcycles hit roads daily in the country.
The production of motorcycles increased by 22.34 percent during the first four months of fiscal year 2017-18 (FY18), as compared to the corresponding period of last year, latest data of Pakistan Bureau of Statistics (PBS) revealed.

PBS’s latest data reveals that the motorcycle production including locally assembled Japanese brand and Chinese made imported motorcycles’ brand stood at 2251917 units in the first ten months (January-October) of 2017. It is to be noted that at least 2.5 million motorcycles were manufactured during past year while the number of motorcycles’ production in Pakistan has already crossed the 2 million mark in just ten months of this year.
It has been observed that in the absence of any public transport system in Pakistan, lower middle-income class of the country has been compelled to compromise their safety by choosing the two-wheelers as their conveyance.

Muhammad Zahid Iqbal Malik of Pakistan Bikers Club (PBC) said motorcycle assemblers in Pakistan produce low quality products just to maintain price stability. He said steady prices besides easy installment plans are the main reasons behind rapid growth of two wheelers in Pakistan.

He said rapid motorcycle production in Pakistan apparently portrays brighter picture but it is a harsh reality that among 2 millions motorcycles produced in 2017 we didn’t manufacture even a single bike here with 100% Pakistani parts.

“It is true that motorcycle industry is booming and providing opportunities for locals and supporting the economy. But Pakistan is still far behind from its neighbouring country as Indian company Hero started manufacturing with Honda Japan and now it has become a separate entity bigger than Honda”, he added.
Association of Pakistan Motorcycle Assemblers (APMA) Chairman Mohammad Sabir Shaikh said globally, there is an average life of a motorcycle, but in Pakistan with the nonexistence of any such law, the tax departments are allowed to collect lifetime tax at the time of registration of a new bike.
He further added that the situation is really alarming as the authorities don’t follow any standards for motorcycles’ registration which is making the motorcycle as the leading cause of fatalities.

He was off the view that the government should set the effective life limit of a motor cycle for tax reasons since the tax offices use 100 years as their average life at present. He suggests that the tax authorities should register a motorbike only for five years and after that period the registration of the motorbikes should be subjected to fitness tests.

[Riaz Haq]

#Motorcycle production in #Pakistan up 15.44% in FY 2017-18. 2,650,233 motorcycles produced in July-May (2017-18) , up 15.44% from 2,295,846 during July-May (2016-17). #Manufacturing #economy 
https://nation.com.pk/04-Aug-2018/motorcycle-production-up-15-44pc-...

The production of motorcycles during the first eleven months of fiscal year (2017-18) increased by 15.44 per cent as against the corresponding period of last year, Pakistan Bureau of Statistics (PBS) reported.

As many as 2,650,233 motorcycles were manufactured during July-May (2017-18) against the output of 2,295,846 during July-May (2016-17), showing growth of 15.44 per cent, the latest PBS production data revealed.
The production of cars and jeeps witnessed 20.10 per cent increase during the period under review as 214,904 jeeps and cars were manufactured during July-May (2017-18) against the production of 178,944 units during July-May (2016-17).

The production of light commercial vehicles (LCVs) witnessed an increase of 18.54 per cent in production during the period under review by growing from 22,927 units last year to 27,178 million during 2017-18.

The production of tractors also increased from 50,049 units last year to 67,371 units, showing growth of 34.61 per cent while the production of trucks increased by 20.27 per cent, from 7,104 units to 8,544 units.

However, the production of buses during the period under review witnessed the negative growth of 31.54 per cent by going down from the output of 1,043 units to 714 units.

Meanwhile, on the year-on-year basis, the production of motorcycles increased by 14.57 per cent by growing from the output of 231,295 units in May 2017 to 264,984 units in May 2018.

The production of tractors also witnessed an upward growth of 19.56 per cent by growing from 5,746 units in May 2017 to 6,870 units in May 2018.

The production of jeeps and cars increased by 0.74 per cent as the country manufactured 18,227 jeeps and cars during May 2018 against the production of 18,094 units in May 2017, the PBS data revealed.

The production of tractors also witnessed an upward growth of 19.56 per cent by growing from 5,746 units in May 2017 to 6,870 units in May 2018.

The production of LCVs witnessed decrease of 12.96 per cent in production by going down from the output of 2,368 units in May 2017 to 2,061 units in May 2018.

The output of trucks witnessed the negative growth of 7.02 per cent by going down from the output of 869 units in May 2017 to 808 units in May 2018 while the output of buses declined by 19.51 per cent by declining from 82 units to 66 units.

It is pertinent to mention here that the overall 'Large Scale Manufacturing Industries' (LSMI) of the country witnessed the growth of 6 per cent during the first eleven months of the current fiscal year compared to the corresponding period of last year.

The country’s LSMI Quantum Index Numbers (QIM) was recorded at 149.19 points during July-May (2017-18) against 140.75 points during July-May (2016-17), showing growth of 6 per cent.

The highest growth of 3.62 per cent was witnessed in the indices monitored by Ministry of Industries, followed by 1.58 per cent growth in the products monitored by Provincial Bureaus of Statistics (PBOS) and 0.80 growth in the indices of Oil Companies Advisory Committee (OCAC).

On yearly basis, the industrial growth increased by 2.76 per cent during May 2018 as compared to same month of last year, however, on month-to-month basis, the industrial growth decreased by 11.63 per cent in May 2018 when compared to growth of April 2018, the PBS data revealed.

[Riaz Haq]

50 Auto Factories' Production Improved With JICA Support

https://www.urdupoint.com/en/business/50-auto-factories-production-...

Small and Medium Enterprises Development Authority (SMEDA) has improved production systems of 50 Auto Factories with the support of Japan International Cooperation Agency (JICA).

Small and Medium Enterprises Development Authority (SMEDA) has improved production systems of 50 Auto Factories with the support of Japan International Cooperation Agency (JICA).

SMEDA Chief Executive Officer Sher Ayub disclosed this here Wednesday while commenting on second term of SMEDA-JICA joint project being run for technical support of auto parts manufacturing industry in Pakistan.

The project, he said, was being conducted in coordination with Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM).

He acknowledged services of the Provincial Chief SMEDA-Sindh Mukesh Kumar to make this project successful in close coordination with PAAPAM.

He said that Auto sector was one of the rapidly growing sectors in Pakistan. Its contribution towards the national economy in the form of technology transfer, employment and revenue generation is visible, he said and pointed out that the sector had a significant room to further improve quality, bring innovation and flexibility of manufacturing system which is being addressed with the support of JICA. He observed that Japan's technical support had helped the local auto parts manufacturers to get prepared for export market by improving quality and productivity of their products, as per world's requirements.

Earlier, at a ceremony held at PAAPAM Office, the SMEDA (Sindh) Provincial Chief Mukesh Kumar gave a briefing on the activities to be conducted under second term of SMEDA-JICA joint project for technical support of Auto sector in the country.

Yoshihisa Onoe - senior representative of JICA Pakistan Office, Hiroshi KANEKI - Chief of JICA Technical Team, Hiroshi SASAKI-Deputy Chief of JICA Team, Ikuta, Ishitaki, Sato (JICA Experts) and Muhammad Ashraf Sheikh, Senior Vice Chairman PAAPAM also spoke on this occasion.

Yoshihisa Onoe-the Senior Representative of JICA, in his address, assured to continue the technical support for Pakistan's industry to compete in the world market in terms of technical know-how and the modern manufacturing techniques.

He acknowledged that JICA's collaboration with SMEDA and PAAPAM had proved to be very useful for the local auto parts' manufacturing industry in Pakistan.

He was glad to note that productivity of the sector had increased to an optimal level, whereas, the rejection rates to be witnessed in the manufacturing processes had reduced to the lowest possible level. He said that the SMEs, engaged in auto parts manufacturing, had a great potential to compete the world market and assured to extend fullest technical support of JICA to impart the best practices being exercised in auto sector of the developed world.

Muhammad Ashraf Sheikh, Senior Vice Chairman (PAAPAM) appreciated SMEDA initiatives to get JICA's technical cooperation for auto parts industry.

He said that PAAPAM members had greatly availed of the assistance to increase their productivity and reduce rejection rates in their manufacturing processes. He urged SMEDA and JICA to continue the program even after completion of the set period. 

[Riaz Haq]

Kumho to supply tech to new #Pakistani tire player. #SouthKorea company signed a 10-year #technology-transfer agreement with #Pakistan #battery maker Century Engineering for manufacturing 28 tire products for passenger, commercial vehicles." #automobile
http://disq.us/t/36u4mye

SEOUL, South Korea—Kumho Tire Co. Inc. has agreed to provide tire manufacturing technology to a Pakistani battery producer that is planning to branch into tire production.

At a Sept. 27 ceremony in Seoul, Kumho signed a 10-year technology-transfer agreement with Century Engineering Industries (Pvt.) Ltd. covering technologies "required to manufacture 28 tire products for passenger and commercial vehicles."

Based in Karachi, Pakistan, Century Engineering—d.b.a Phoenix Batteries—is a car-battery manufacturer that aims to build a tire plant with a capacity of 5 million units.

Under the deal, Kumho Tire will receive $5 million for the supplied technology as well as royalties equal to 2.5 percent of Century's annual sales for 10 years, the South Korean company said in a statement.

The scope of the agreement covers design, quality control, training as well as manufacturing process.

Century Engineering has as yet not disclosed other details about its plans for tire production, including the site and timetable.

[Riaz Haq]

#Tractors production in #Pakistan up 33.20%. During the period from July-June, 2017-18 about 71,894 tractors were manufactured as compared to the 53,975 tractors of same period of last year. #agriculture https://pakobserver.net/tractors-production-up-33-20pc/ via @pakobserver

The domestic production of tractors during fiscal year 2017-18 witnessed growth of 33.20 percent as compared the production of the corresponding period of last year.
During the period from July-June, 2017-18 about 71,894 tractors were manufactured as compared to the 53,975 tractors of same period of last year.
On month on month basis, the local production of tractors also grew by 15.21 percent as it was recorded at 3,926 units in June 2017 to 4,523 units in June 2018. according the Quantum Index Number of Large Scale Manufacturing.
It may be recalled that the overall Large Scale Manufacturing Industries (LSMI) of the country witnessed growth of 5.38 percent during the year 2017-18 compared to last year.The LSMI Quantum Index Numbers (QIM) was recorded at 147.07 points during July-June (2017-18) against 139.55 points during July-June (2016-17), showing growth of over 5.38 percent.
Meanwhile the production of trucks witnessed growth of 5.76 percent by going up from the output of 608 units in June 2017 to 643 units in June 2018.
The production of trucks also increased from 7,712 units last year to 9,187 units, showing growth of 19.13 percent while the production of tractors increased by 33.20 percent, from 53,975units to 71,894 units.
On year-on-year basis, the production of jeeps and cars increased by 40.90 percent during the month of June 2018 against the output of June 2017. During the period under review, Pakistan manufactured 16,234 jeeps and cars during June 2018 against the production of 11,522 units during June 2017.
During last financial year, the production of light commercial vehicles (LCVs) witnessed an increase of 19.74 percent in production during the period under review by growing from 24,265 units last year to 29,055 LCVs during 2017-18.

[Riaz Haq]

Iron, steel output swells to 4.7m tonnes

https://www.dawn.com/news/1646475

KARACHI: The production of iron and steel, with billets/ingots mainly used in the construction industry, in the last 10 years swelled by 196 per cent to 4.777 million tonnes in FY21 from 1.616m tonnes in FY12.

H/CR sheets/strips, coils/plates, also known as flat steel products for production of electronics, surged to 3.296m tonnes in FY21 from 1.850m tonnes in FY12, Pakistan Bureau of Statistics (PBS) data of Large-Scale Manufacturing (LSM) showed.

Rising production of steel related products has led to higher imports of raw materials. For making steel bars, the country’s iron and steel scrap imports in FY21 rose to 4.719m tonnes costing $1.86bn from 1.568m tonnes valuing $538m in 2011-12, the PBS figures showed.

Besides, iron and steel imports swelled to 2.992m tonnes amounting to $1.959bn in FY21 from 1.755m tonnes ($1.4bn) in 2011-12.


Commenting on rising demand for steel bars, Pakistan Association of Large Steel Producers Secretary General Syed Wajid Bukhari said steel bar production till 2011-12 was about three to 3.5m tonnes while the current demand now hovers between 6.5m tonnes to 7m tonnes.

He attributed increase in steel bar prices to soaring scrap prices in the world market to $550 per tonne from $300 per tonne while one dollar is now equal to 168 as compared to Rs85 in 2011-12.

He said gas price increased to Rs97 per unit from Rs15 per unit in the last 10 years followed by power tariff to Rs21 per unit from Rs6 per unit. Freight charges are 100 per high now.

Mr Bukhari was of the view that steel bar demand would soar to nine to 10 million tonnes by 2023-24 in view of rising construction activities.

Private sector consumes 80pc of total steel bar production as compared to 20pc by the public sector, he added.

Hassan Bakhshi, former chairman Association of Builders and Developers (ABAD), said a multi-storey high project to be built on 1,000 yards plot with three floors for car parking requires around 1,100 tonnes of steel bars.

He claimed that steel bar demand has been on the rise due to 80pc construction work on highrise projects in Punjab while the Sindh Building Control Authority (SBCA) has been creating problems in clearing new projects.

“Only 91 projects have been cleared by the SBCA in the last two years in Karachi as compared to 500-7,000 projects a year some 10 years back,” he said.

The projects being promoted on the social, print and electronic media belong to Punjab while in Karachi, advertisement campaigns have been running for old projects which had been approved very late.

Pakistan Association of Parts and Accessories Manufacturers Association chairman Abdul Rehman Aizaz was of the view that auto assemblers and their vendors consume 15,000-20,000 tonnes per month of iron and steel in different forms which are used in making different parts by the vendors and the assemblers.

Bike production swelled to 2.475m units from 1.645m units in FY12, while jeeps/cars production rose to 163,122 units from 154,706 units in FY12.

Trucks and buses production in FY21 jumped to 3,808 and 570 units from 2,597 and 568 units FY12.

Domestic appliances and electronic products have shown phenomenal growth in the last 10 years. For example, production of refrigerators, deep freezers and air conditioners has swelled to 1.337m units, 109,029 units and 505,493 units from 1.062m units, 56,313 units and 240,338 units in FY12. Electric fans production rose to 2.498m units from 1.908m units.

[Riaz Haq]

Pakistan becomes the fourth largest bike manufacturer country in the world

https://www.edgedandtaken.com/pakistan-becomes-the-fourth-largest-b...

Prime Minister Imran Khan met yesterday with prominent industrialists and businessmen in Islamabad. During the meeting, the Prime Minister Imran Khan stated that Pakistan has become the fourth largest producer of bike in the world. Discussing the automotive sector, Imran Khan said tractor exports increased by 10% while the country produced 90% of its parts.

This is not the first time the Prime Minister has cited the bike industry and its apparent success. Last year, the Prime Minister stated that in the fiscal year 2020-2021, Pakistan recorded the largest number of motorcycle sales in the history of the country. He said record motorcycle sales show that the country’s low-income class is making progress. Given that motorcycles are known as the journey of an ordinary person, “aam admi ki sawari”, the Prime Minister Imran Khan says that the increase in motorcycle sales means the strengthening of “aam admi”.

Meanwhile, prices as well as bikes sales speak differently. During 2021, motorcycle companies gradually increased prices. According to our research, Honda has increased the rates by 7 times, Yamaha 5 times, while Suzuki has revised its rates 4 times.

The figures show that the price of the most famous Honda CD70 has risen by Rs. 14,800 last year, while the Honda CG 125 saw a total increase of Rs. 21 000. Meanwhile, Yamaha’s well-known YBR bikes have noticed a price increase of Rs. 30,500 during 2021.

And Suzuki motorcycle prices have risen to Rs. 25,000 last year. It shows how much prices have risen. Surprisingly, despite this repeated increase in prices, sales figures in 2021 continued to show upward trajectories, leading the country into a massive motorcycle manufacturer in the world.

According to the data, sales of Honda, Yamaha and Suzuki motorcycles increased in the period July-November 2021, as well as from month to month. The PAMA report showed that Atlas Honda Limited broke its sales record. In November, the company sold its highest number of bikes at 128,503 units, beating its October sales record when 125,031 bikes were sold.

Honda sales, meanwhile, rose to 563,575 units in July-November from 512,010 in the same period last year. Other Japanese motorcycle companies, Suzuki and Yamaha, also recorded high sales during this 5-month period.

The data showed that Suzuki sold 14,915 bikes in those five months compared to 8,719 in the same period last year. This means that its sales increased by 71%. Meanwhile, Yamaha sales rose to 9,962 units from 8,733 last year, a jump of 14%.

[Riaz Haq]

Bilal I Gilani
@bilalgilani
From just 3 million motorcycles 15 year ago , we now have over 22 million motorcycles

Ppl had disposable income to afford this

Much of these motorcycle are used for rural to urban mobility

Motorcycles r environmentally less harmful than cars ( ideal is public transport)

https://twitter.com/bilalgilani/status/1496406817794056194?s=20&...