Feeling the pinch: As trade liberalises, large players look forward, while small players unsure

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pak-idia

KARACHI: It happened slowly without anyone realising it. The influx of Chinese motorcycles that started in 1990s was a boon for customers and allied industry, that made accessories and spare parts for the bikes. But in a matter of years everything changed. Along with the two-wheelers came pistons, gearboxes, plugs, wheels and literally every other part.
Along Karachi’s busiest thoroughfare of MA Jinnah road, hundreds of motorcycle parts’ shops in Akbar Market are crammed with customers. From ‘genuine’ made-in-Taiwan parts to those made locally, all are available here. And the Chinese are the cheapest.
“No one cares about quality. Customer wants a good price and that’s all,” said a long-time trader. “Chinese have completely taken over the market.”
Having advantage of economies of scale, lax labour laws and the ability to mobilise resources for making various products in record time gives the Chinese bike assemblers an edge over Pakistani counterparts.

Industry people say that size does matter! And now with government officials talking about easing trade ties with India, some local manufacturers have become uneasy.
Notwithstanding the absence of direct banking links between New Delhi and Islamabad and all the other trade barriers, Pakistani businessmen insist that the government needs to initiate a cost-benefit analysis immediately.
This would mean strengthening regulatory bodies especially the National Tariff Commission and revisiting the taxation regime for the local industry.
One reason why all the hue and cry surrounding the units, which were succumbing to trade competition, was never noticed is because large industry particularly textiles, chemicals and its raw material makers remained immune.

2013-07-22

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