Setting up a motorcycle assembling plant: Yamaha set to announce $150 million investment today

The world renowned Yamaha Motorcycle Japan is set to announce making an investment of $150 million in Pakistan on Thursday (today) as all technical bottlenecks have been cleared with the help of the new Finance Minister, Salim Mandviwala. Honorary Technical Adviser of the Board of Investment (BoI) Syed Feroz Shah said that a delegation of the company was reaching the federal capital to make the long-awaited announcement in this regard.
The company had submitted their project proposal in October 2009 to establish a state-of-the-art motorcycle assembling / manufacturing plant at National Industrial Park in Bin Qasim, Karachi on 50 acres of land. This modern plant would assemble / manufacture the globally acceptable models with Euro-II & Euro-III compliant which were not yet being manufactured in Pakistan.
Federal Board of Revenue (FBR) has recently amended the Statutory Regulatory Order (SRO) after seeking necessary clarifications from the Cabinet Division on the decision of Economic Co-ordination Committee (ECC) of the Cabinet. The company would manufacture motorcycles with engine capacity of 125cc and above as well as offer electronic fuel injection (EFI) along with automatic transmission and environment-friendly exhaust systems consistent with the European standards.
The investment is expected to create 45,000 jobs and promote ancillary industries. The project would lead to transfer of technology in manufacturing of motorcycles and the company would establish exclusive training institute for developing skills and capacity of the vendors.
The sources said that rationalised tariff structure would provide equal opportunities to existing motorcycle plants and new entrants. Yamaha, which was looking for space to enter the motorcycle industry in Pakistan, would now be able to make the ground with the government's decision on tariff rationalisation. The company has already purchased land in National Industrial Park (NIP), Bin Qasim Karachi.
The sources said there were only nine two-wheeler manufacturers in the organised sector while 68 remain unregulated. With the introduction of rationalised tariff structure, all unregulated units would come under the organised sector. According to sources manufacturing facility would not only meet the demand of Pakistani market but would also enable them to export the product to the neighbouring countries.
It is pertinent to mention here that Pakistan is manufacturing motorcycles mostly of 70 cc and the industry is producing 1970 models based on old technology which were not being used even in the third world. However, M/s Honda has upgraded its 70 cc motorcycle in accordance with of Euro-II technology.
The government has reduced duty on CKD of motorcycles from 15 per cent to 5 per cent during the first five years of their operation. The annual production of motorcycle is around 1.8 m in Pakistan but almost all domestic models and export is negligible. This plant would bring the opportunity not only for the export motorcycles but also vendors would be able to export their parts as well. The Board of Investment (BoI), being the facilitator of investment, made it possible with their utmost efforts that the Yamaha of Japan was going to announce on February 28 this year for the establishment of YMPK (Yamaha Motor Pakistan Limited). The construction of the plant would commence within a shortest possible time. This is a big achievement of BoI, Feroz Shah said.