Sources said that some 30 out of 38 units have been compelled to shrink their business volumes in the wake of rising competition, non-implementation of Tariff Based System (TBS) and largely provided credit facility by the big manufacturers to the dealers. They said that these bike makers across the country had formally come into the market two or three years back, are now facing adverse conditions in running their business.
"Whatever the circumstances we will face, we will not shut down our business," said a local bike manufacturer with a hope that the ultimate beneficiary would be those who would pass these sweltering days.
Nevertheless, industry sources said that most of the companies have cut down the size of their employees and have fired 70 percent of the staff members as these units are small in size and could not spend too much on employees salaries.
"In fact, we are now producing few units, sell those to our dealers and halt production process until we get new orders," said a manufacturer and added that in this way most of the motor bike assemblers and manufacturers avoid making unnecessary expenditures.
When asked, a manufacturer replied, "We could not afford permanent staff, therefore, for the past few months we have been hiring staff on daily wages for a specific time period." Another bike manufacturer informed that to run any factory properly, the manufacturer has to make 300 units on a monthly basis, while around 30 manufacturers stand below this graph.
"Giant-sized companies manufacture their motor bikes in bulk quantity and engage in offloading their stocks aggressively into the markets besides offering special and attractive packages to their dealers, which we could not," said a Karachi-based bike maker.
"How could we offer attractive packages to our dealers or customers in such a condition where we are striving hard to maintain our break-even level," he added.
"Large companies are throwing their units into the market and have conveyed to their dealers to sell their products either on full cash or through leasing," said an assembler on the condition of anonymity.
The small-sized motorcycle manufacturers are perplexed over the situation in which big companies are launching new models and designs, while, they (small-sized manufacturers) are fighting for their source of revenue. "On the one hand, we are competing with big companies by improving our product's quality and design, while on the other hand, the prices of our products have also declined significantly by some Rs6,000 per unit during the past six to eight months due to stiff competition," said an assembler.
"In these circumstances TBS is coming and we fear that the big companies would slash their products prices more significantly this time, consequently we could be deprived of our current market share," manufacturers said while commenting on TBS implementation. It may be mentioned here that the aggregate investment in the motorcycle industry of the country has reached to Rs5 billion, while the units which are nearing closure at this point in time, got the licenses and had invested approximately Rs50 million each some three years back.