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Two wheelers a hedge against inflation

LAHORE:

Stakeholders of the two-wheeler industry have stressed that the government should focus on deepening economic relations with other countries through effective and efficient diplomatic policies.
They were of the view that positive developments on the diplomatic front would encourage local businesses to export their products to potential foreign markets, creating a win-win situation.
“It is unfortunate that India is much more active in this regard,” said an official of Atlas Honda while speaking to The Express Tribune on Saturday. “The neighbouring country offers several incentives to its export industries to lift the economy.”
He lamented that India had captured Pakistan’s share in the export market of two wheelers in Africa solely through its diplomatic measures.
“India has imposed lower duties on export-oriented industries whereas Pakistani firms are paying higher taxes,” he said.
He announced that his company was currently involved in negotiations with African countries, which could enable it to export at least 40,000 bikes over the next three years.
According to the official, Pakistan needs to make a lot of efforts to reduce the cost of doing business for industries.
“The government should realise that this factor has a direct impact on exports,” he said, adding that the cost to run business should decline drastically to allow the country to compete in export markets.
The official clarified that the increase in production and sales of bikes was due to the contraction in per capita income of Pakistan as the public was shifting from four wheelers to two wheelers.
Although the two-wheeler segment was starkly different from the vehicle industry, still bike sales were an important indicator of the economy, he said.
“People are investing in two wheelers as a hedge against inflation,” he noted. “The rise in bike sales is due to this phenomenon and currently we are unable to meet market demand.”
Terming the present situation complex for businesses, he regretted that post-Covid inflation had substantially increased the cost of raw material.
“The two-wheeler segment possesses a huge potential at local and international levels and the government should aid the industry by resolving its issues and providing a helping hand,” the official added.
Published in The Express Tribune, November 7th, 2021.
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