Saving up on transportation costs |
CORPORATE WINDOW: Saving up on transportation costs
The on-going Middle East crisis coupled with the Pak-Afghan war and an increase in fuel prices is unlikely to give any major hit to the sales of two-wheelers.
As the twin conflicts wage on, auto makers fear disruptions and shipping delays in the arrival of imported parts, logistic congestion, high freight and war risk charges and increased transportation cost owing to the hike in high-speed diesel rate, now fixed at Rs335.86 per litre, as of last Saturday.
The above crisis may push up prices of imported raw material, thus forcing the assemblers to raise prices of two-wheelers. However, market people maintain that despite rising prices, motorcycles may continue to remain an affordable option for the buyers towards fuel and time saving compared to moving into four-wheelers and public and private transport.
In the last few years, car owners have already started keeping a 70–150cc bike in their houses and bungalows. A further rise in petrol price may push more car owners to keep a new or a slightly older model to save the cost of running on higher engine capacity cars and sports utility vehicles.
As fuel costs rise, market personnel believe two-wheeler demand will remain strong as the only form of affordable transport
As fuel costs rise, market personnel believe two-wheeler demand will remain strong as the only form of affordable transport
In this situation, the demand for 70cc bikes may further go up. The prices of second hand bikes are already high due to higher prices of new bikes. After fresh petrol price shocks — the demand for used bikes may further crawl up.
Bike sales also depend a lot on rural buying based on better crops like wheat, cotton, rice and sugarcane. A good crop is enough for the growers to replace an old bike with new one.
Bike sector expert, Mohammad Sabir Sheikh said that there is no denying the fact that the Afghan-Pakistan and Iran-USA-Israel wars have shattered the buyers’ sentiments as the footfall of buyers in the markets has slowed down, leaving traders frustrated........