KARACHI: Some hot selling locally assembled two and four wheelers cannot be searched on worldwide web for their counter price check as they exist only in Pakistan.

This is perhaps because of non-existence of any model phase out policy adopted by the car and bike assemblers and complete ignorance by the government.

Consumers have been buying more than two decades old models.

Many brand names still exist but their models, body shapes and engines have been completely changed decades back by manufacturers in Japan to beat competition, match technological leaps and meet emission standards.

Today people use internet to find the right price for the product they intend to purchase. In auto sector, internet search results for Honda CD 70cc bike, Honda CG-125 bike, Suzuki Mehran 800cc, Suzuki Cultus 1,000cc, Suzuki Bolan van, Suzuki Ravi pickup etc prove futile.

There is no Honda CD-70cc in the world as Pakistan is the sole assembler. India is producing over 100cc bikes of Euro III and Euro IV fuel efficient engines while in Pakistan the manufacture of Honda 70cc had introduced Euro II bike in 2012.

The price of CD 70cc produced by Atlas Honda Pakistan is about Rs70,000, while CG-125 sells at Rs102,500. Honda CD-70 model had inspired Chinese bike assemblers to introduce the same model at a price of Rs42,000-44,000.

It is not clear why the Japanese bike assembler chooses to keep redundant 70cc model in Pakistan or the formula used to determine its price.

The assembler claim to have achieved over 94 per cent indigenisation including engine parts in CD-70cc bike.

Same is the case with a particular model of Honda CG-125cc. By 2002, the deletion level reached 87 and 80pc in CD-70 and CG-125.

Honda CD-70cc bike has been in production since 1973. The company made overall change in model in 1993 and introduced its Euro II model in 2012. The local production of CG-125 got underway in 1981-1982 followed by a big engine change in same model in 1993 and then it was transformed into Euro II in 2012, an official of Atlas Honda told Dawn.

In over 20 years this bike should have been “Made in Pakistan bike” but this has not happened as its price is jacked up when yen gains value nullifying the claim of localisation. Atlas Honda produced overall 68,637 bikes in 1996-1997 and its production swelled to 639,066 units in 2013-14.

Honda Japan has given exclusive rights to Atlas Honda for manufacturing of CD-70cc and CG-125 in Pakistan and also for their exports to various countries like Sri Lanka, Bangladesh, Afghanistan etc, the official added.

He did not agree that the company had kept the model unchanged. The company now offers six models ­— two 70cc models, three 125cc models and one 100cc model as compared to only two models few years back.

He said there was no formula to phase out the model. “As long as there is demand we do not feel the need for change in the model,” he asserted.

A dealer at Akbar Road, the main market of motorcycles, said 70cc and 125cc bikes from China can be imported at $250 and $350, respectively. But they cost dearly here after paying duties and taxes.

In car sector, the production of India’s iconic Maruti Suzuki 800cc was suspended this year. More than two million Marutis had been sold in India since 1983. In Pakistan, however, Suzuki Mehran 800cc still rules the roads. With no major change in its exterior and interior, the company made some cosmetic changes.

Pak Suzuki Motor Company Limited (PSMCL) must have also recovered its investment but does not feel pressure to introduce new models.

Vendors of Mehran must be praised for making its parts for almost 25 years with same designs and specifications.

Two different models of Suzuki Mehran are sold at Rs625,000-678,000 but buyers cannot compare price as it is not in production outside Pakistan.

Suzuki Cultus is also over a decade old model that sells for Rs1,034,000 in Pakistan so there is no scope for price comparison.

Suzuki Bolan, priced at Rs695,000, was introduced in the 80s and has not changed since. Same is the case with Suzuki Ravi which costs Rs637,000.

Auto assemblers blame low production volumes for lack of investment in new models. What is the benchmark of volume that would make investment viable has not been mentioned.

Despite the fact that the local assembly of many models of cars and bikes started in the 1980s, the website of Pakistan Automotive Manufacturers (PAMA) provides archive data starting from 1995-1996.

Production of Suzuki Bolan was 3,200 units in 1995-1996 which swelled to 15,520 in 2006-07 and 17,250 in 2007-08 and then came down to 14,000 units in 2013-14.

Mehran’s production was 8,986 units in 1995-1996 which peaked to 36,988 in 2006-2006 and fell to 28,485 units in 2013-2014. Suzuki Khyber/Cultus production was 5,720 units in 1995-96 which hit to 29,880 in 2006-07 and dropped to 14,467 units in 2013-14.

Pak Suzuki remained a favourite of the Punjab government of getting order for taxi scheme that helped raised the company’s production.

Car assemblers enjoyed boom period (2006-08) due to over 70pc per cent sales of vehicles through bank and leasing finance which now has plunged to 15-20pc due to rising interest rates.

For some reason no government over the past three decades took assemblers to task for taking car/bike buyers for a ride. “How assemblers managed this? Your guess is as good as mine,” a market watcher commented.

“It is an open secret that auto makers do not provide fair value for the price they charge,” he added. It is the duty of the government to defend people’s interest and force special interest through greater competition to improve their products and keep price within fare range.

“In the UAE cars are tax-free, therefore they are cheaper. If you deduct taxes on an apple-to-apple basis, cars in Pakistan are cheaper than the UAE. Similarly in India and Thailand, a locally manufactured variant is more expensive as compared to those made in Pakistan, he claimed.

An official in Pak Suzuki admitted that Ravi, Bolan, Mehran and Cultus are not produced outside Pakistan and informed that the company has no plan to change models that sell well. “When sale is brisk there is no logic to replace or introduce costly versions.”

Another problem is low volume. In Pakistan the ratio is one car per 1,000 people. At this ratio no business will risk investing in new jigs, fixtures, tooling etc. Besides arrival of used cars haunts investors, he said.

For bringing the cost down, the company has asked the government to allow import of six items, by removing them from the negative list of items importable from India. It could facilitate low costs of CKD, introduction of new models, technology transfer/joint ventures in parts manufacturing and possibility for exports, he added.

Published in Dawn, November 9th, 2014