The bike is a staple mode of transportation in Pakistan because it is much more affordable and economical than cars for the public. They choose to travel on bikes for shorter distances than dealing with heavy traffic in cars. However, the situations are not quite impressive lately. Bike customers are suffering from a loss of purchasing power due to continuously increasing prices. Expectedly, there may be an increase in bike prices in May following numerous price hikes this year.
In Pakistan, there are several bike manufacturers like Honda, Yamaha, Suzuki, Road Prince, and United. All these have raised the prices to a significant extent since the last year. Still, the economic situation doe snot seem to be in control. So, customers have to be ready for another increase in bike prices in Pakistan.
Causes of Increase in Bike Prices
The manufacturers are not hiking up the prices to expand their profit margin. There are several reasons that contribute to the bike prices rise in Pakistan and profit margin is not among those. Check out why the prices continuously rise every month.
Rising Fuel Prices in the Global Market
The price of petrol is increasing in the global market and Pakistan has to depend on imported fuel. Therefore, the cost of transportation is high for the manufacturers. Therefore, they have to increase the prices to meet the costs of production.
Currency devaluation is the biggest cause of the increase in bike prices. The Pakistani Rupee is depreciating against the US Dollar which is adding up to the costs of production. Because the manufacturers have to import parts from other countries to assemble them. Since the payments have to be made in USD, more has to be paid for the parts.
Non-Issuance of LCs to Control Imports
Another major reason is the shortage of parts in the country. As most of the bike manufacturers rely on imported parts, the State Bank of Pakistan is the biggest hindrance. Pakistan is one of the highest debt-to-GDP countries where Government is worried about controlling imports. As a result, there are import restrictions and the State Bank of Pakistan is not issuing LCs (Letters of Credit) to the importers. Therefore, the existing parts in the market are being sold at a high rate in the market. So, the manufacturers are forced to increase bike prices.
Due to all these factors, many companies are forced to shut down their operations temporarily because the demand is low. At the same time, the customers are worse affected by this situation. Moreover, due to the worsening economic conditions, it is expected that we see another increase in the bike prices of Honda, Yamaha, and Suzuki in May 2023. Hence, they are shifting to instalment plans because transportation is a necessity for all.