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Pakistan’s premier magazine on automotive, engineering & energy sector Monthly
AUTOMARK Growth of Small scale industry in Pakistan
Editor M. Hanif Memon
The development strategy followed by Pakistan since independence has been o ne o f im p o r t s u b s t it ut io n in manufactured goods, produced by large Technical Editor s cale (c ap ital intens ive) indu str y. Muhammad Shahzad Ap pa rently this s trate gy achieved Advertising Manager consi derable success in the fi rst two Haider Nawab Tahir Siddi qui Advisor Planning & decades. The growth rate of output (at Develop ment c o ns ta nt pr ic e s ) in lar g e s c al e Circulation Manager Toyota Southern Motors manufacturing, for the period 1949/50 Abdul Khaliq Toyota Defence Motors to 1967/70, exceeded 14% per annum Karachi Computer Operator and its share in GDP increased from lest MurtazaHanif Muhammad Yousuf Shaikh than 3% in 1949/50 to 13% in 1969/70. Founder & Chairman However, there are several di sturbing Pakistan China Motorcycle Web Master Industry Council aspects of the growth pattern. First, Mustafa Hanif Karachi while large sca le indu stry had preAbdul Majeed S heikh em pte d mos t of the dev el op ment CONTRIBUTING IN President, resources in this period it generated very AOTS-ABK Dosokai, THIS ISSUE little employment and even by 1968/70 Karachi Regional Center IHT Farooqui its contribution to total employment and Director Industrial Lesion, Asif M asood NED University, Ali Hassan even by 1969/70 its contribution to total Karachi M. Yousuf Shaikh employment was less the 3% of the Sania Zaib Abbasi labour force. Second, the industry which Engr. I HT Farooqui Abdullah had developed behind tariff walls was General Manager Plant M. Owais K han inefficient and incapable of competing Karakoram Motors (Pvt) Ltd., Meer Ali Buksh Karachi Ali Hassan on its o wn in the wo rl d m ark et s. Therefore, once the dometic demand for J. Pereira Advisors basic consumer good had been meed Senior General Manaer Syed Mansoor Riz vi After Sales Service and Parts the only way by which its further growth Principal Officer Master Motor C orporation Ltd ., could be ensured was by subsidi zing M/s. CNH Services (Pvt) Ltd. Karachi Karachi exports. Third, the industry which was set up was based almost ent irely on imported mach inery and, except for The views expressed by contributing te xt ile s, la rg el y on imp o rted raw m a te ri al s . T hus t he p ro c e ss of writers and comments do not industrialization, instead of reducing the dependence on imports, increased it necessarily reflect the views and even further. policies of the Monthly AutoMark The experience in most other developing magazine's management. countries which had almost followed the same strategy during this period w as AutoMark REGD: SC-1330 also similar, i.e., inability to absorb the Published every month by M. Hanif Memon rapidly increasing labour force, growing Postal Address dependence on imports, diff icul ty in Active Communications exporting manufactured goods and the D-68, Block-9, Clifton,Karachi fa ilure of import su bstitution to go Visit us: www.automark.pk b eyon d the c ons um er go od sta ge. E-mail: magazine@automark.pk automarkpk@gmail.com Assistance Editor Sania Zaib Abbasi
Advisors Imtiaz Rastgar CEO, Rastgar Group & CBI External Expert, Ex-chairman EDB Islamabad
Tel : 021-32218526 Mobile: 0321-2203815
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CONTENTS
Monthly AutoMark
Rastgar & Co and CompAir Focus for Competitive and Progressive Pakistani Foundry Industry
13
Handy Guide for Investment opportunities 14-16-26 in the Auto Industry sector of Pakistan particularly for Chinese investors Exclusive Article by M. Yousuf Shaikh, Founder & Chairman, PCMIC Auto industry cautiously welcomes 2013 17-18 Exclusive Article by M. Owais Khan Pakistan Auto Parts show (PAPS-2011) An Exclusive post event report by M. Owais Khan
20-21
Exclusive Interview with Mr. IHT Farooqui
22-23
Two firms increase tractor prices
24
Problems of Pakistani vendors by Meer Ali Buksh from Toyota Western Motors
25
Importance of Natural Gas in Economic Development of Pakistan Exclusive Article By Asif Masood
31-34
Pak Suzuki Motor Company expanding its Motorcycle operations by Abdullah
37
Local Assembled/Imported car price
36
Trends in Pakistan road freight 40-41 industry 1985-2012 (An Overview Part II) by Sania Zaib Abbasi Battery ….. The Heart of your Electrical System By Mohammad Shahzad from Canada
44
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Monthly AutoMark Magazine
Corporate Event - Update
Energy Efficiency and Heat Recovery Rastgar & Co and CompAir Focus for Competitive and Progressive Pakistani Foundry Industry
Spea kin g a t the 4th In tern at ion a l Foundry Congress and Exhib ition, Chris G old worthy, Co mpAir E xp ert on air com pressors said , en ergy efficiency is the an swe r to the growing d eman d of f oundry m en fo r co st ef fic ie nt,an d pro ductivem etal cast in g o peratio ns. C ompres sed Air Syste ms selected with lif etime o perat in g co sts in m ind an d equipped with heat recovery options can do w onders f or Pak is tan ’ s ener gy s tarve d i ndustry. Ras tgar & C ohas a lign edits vis ion w ith the visio n of Pak istan Found ry Asso ciation fo r an Industrialized Pakistan by making world co m peti tiven es s as the fo cus f o r Pakistan’s Foundry Sector. In o rder to m ake this visio n into a reality Rast gar & Co of fers Comp Air air compres sors, nitrogen generators , filters and dryers. M r. Im tiaz Rast gar CB I C ha irm an , Rastgar & C o, who is h im self a veteran f oundryman and alsoCB I Local Exp ert fo r Engineering Sector in Pakistan,read his p aper on imp ortant ingredients fo r s uccess an d gr owt h in the Foundry T rade. His pap er w as tit le d “K ey to Success in Metal Cas ting Busin ess ”. Co mpAir expert Mr. Chris Goldsworth y read a Te chnical Pap er t itled “En ergy E fficiency in Foundry Comp res sed A ir System s”. Pakistan Foundry Association organized the 4th In ternational Foundry Congress & Exh ibition (IFCE–2 012) o n Dec 05, 06 -201 2 at Pe arl Continental Hotel, Laho re, Pakistan . The PFA has done a
w onderful job of organising the fourth in ternational fou ndry congress within th e f ir s t e ig ht yea r s o f it s li f e. T he 4th IF CE – 2 01 2 pr ovi ded an o ppor tunity to Inves tor s, m ach in ery m an uf a ctu re r s , f o un dr y s u ppl y com pan ie s an d s ervic e pro viders to showcase their products and services to th eir co unte rp a rt s a nd po te ntia l cust om ers an d m ak e allian ces. Th e f orum provid ed a platfo rm to emin ent ac ad emic ians and tech nolo gist f rom w orldw ide to com e to ge ther an d to d is cu ss ad v a nces an d te chni ca l o pportunities. Participation of International guests and speakers from Europe, China, India, UK, Tu rkey, representations from Eu rop ean & Asian Foundry Associations has been e ns ur ed. I FC E – 2 01 2 pro v id e d a networking opportunity for members of f oundry industry, customers, supply as we ll as its s ervice sectors. Pak istan is set to gr ow as a prod ucer a nd exp or ter of cast in gs , o wing to expected high growth in the auto sector, tract or industry, agriculture m achinery, a nd tr uck an d b us secto rs . W it h a population of 180 Million and growing w it h a heal thy , yo ung pop ulatio n, Pakistan is set to grow its industrial base as we ll as h ousing, infra struc ture and a gric ult ural sector s. Th e I ndo-Pak Subcontinent is also being targeted b y engine ering multinationals as t he next , prom ising sou rcin g destination af ter the m aturity of C hina.
Rastgar & Co is sole distributor of energy eff icient Co mpAir air compresso rs in P akist an with full sale, servic e, an d s par es an d aft er sales support . Wit h m ore than 1500 in st allation s all over Pak is tan and mo st m ajor fou ndrie sin P a k i s t an e n j o y R as tg a r & C o s ervic es.Ras tgar & Co st rives hard to m ak e their com pr essed air s yst ems e ner gy e f fi cie n t a nd pr o ductiv e.
Chris Goldworthy of CompAir delivered a Technical Paper on Energy Conservation and Heat Recovery in Compressed Air Installations in Foundries.
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Exclusive Article by M. Yousuf Shaikh
Monthly AutoMark Magazine
Handy Guide for Investment opportunities in the Auto Industry sector of Pakistan particularly for Chinese investors The Pakistan Chinese Motorcycle Industry Council (PCMIC) recommends to Chinese automobile manufacturers to investment in Pakistan’s auto industrial sector as there are numerous investment opportunities in Pakistan. I would like to invite them to take part in the automotive sector.
U nsure ab out wh ere to estab lis h your new engine m an ufac turing fac ilit ie s? W el l, her e is a ha ndy gu i de that s ho wc as es s o me hi gh lig hts o f the b enefits of investing in th e autom otive in dustry in Pakistan. Invitation for Investment Opportunities: The Pakistan China Motorcycle Industry C ouncil (PCM IC) takes ple asu re in p o r tr a y in g s e v er a l i n ve s tm en t o p p o r t u n i t i e s p e r t a i n i n g to r ehab ilit at ion an d m o der niz in g i ts m e m b er ’s s ele cte d f a ctor ie s a nd est ablish ment o f new fact ories in the au to industrial s ectors. The Pakistan China Motorcycle Industry Council is a Pakistan & China Motorcycle trader & Industrial group network for Pakistanis , Chin ese an d their friend s. In addition to being a Pak ist an & Chin a m ot orcycle trade & industry watche r, an invest or, a b usiness consultan t and a n av id fo l lo we r o f the C hin es e Mot orcycle Trade & Industry markets. Specia liz ed In te rnat i ona l/ Ch in es e C o m p a ni e s , B u s i ne s s m e n a n d Fin anciers are invited to particip ate in o ppo rt uni tie s that m ay a chie v e econo mic viab ility an d cr ea te rapid positive reve nues. The concept is that the investors and their supporting teams would rehabilitate and manage the plant o n their ac count aga in st a s hare of
prod uction ach ieve d; fo r a nego tiated period of time. The strong points of these opportunities are: • High loc al demand of the produ cts. • Availab ility of trained and experienced m anpower. • Availab ilit y of loc al r aw m aterials . • A dequate investm ent legislations and f a vo r a b le ter m s f o r a gr ee m en t. • Fast return on invest ment. Th e PCMIC expresses its willingness to ass ist in vest ors with all the neces sary clari fic at ion s as w ell as f ac ilit ati ng es s enti al v isi ts to the fac tor ie s (if required). Interested investors are kindly requested to submit their inquiries to c h airm an PC MIC at pakchina.mic@gmail.com at their earlie st. T h e P C M I C H a nd y G u i de o n Autom ot ive In ve s tment is the o nly consolidated collection of investment in the au to sector in the county wh ic h provides a tim ely and reliable source of i nfor m ati on prim ar ily f or bus in ess (es pecia lly in ve s to rs ), an d als o f or i nv es tm en t pr om ot i o n a ge nci es , gov ernmen t policy makers, academics, a nd r eg i o na l an d in ter na ti o na l o rganiz ations in Pakistan an d o ther r e gi o ns . Th e G ui de w i ll as s i s t e ntr epr en eur s in m ak i ng so u nd
PAKISTAN CHINA MOTORCYCLE INDUSTRY CONCIL
investm ent decisions an d policy m akers in f or m u lat in g c o n s i s te n t a n d co her ent s tra te gy d e ci s i o n s . T h i s ve rsion is composed o f i n f o r m a ti o n co m pil ed b y the P CM IC m a rk etpla ce m em b er s b y r es po n di n g to t h e C o un c i l ’ s q uestion naires. In form atio n of som e m embers was not available at the t im e o f the publication and will b e included in the future edition. In t rodu ction to Inv es tm en t Sectors: T he Pa ki st an Chi nes e Mo to r cy cle Industry Cou ncil (PCMIC) recommends to Chinese au tom ob ile man ufac turers to i nve s tm ent i n P ak is tan ’ s au to in dustrial sector as there are numerous in vestment opportunities in Pakist an. I wo uld like to invite them to take part in the automot ive sect or. The ave nues exist in setting up mot orc ycle engin e m an uf ac tur in g unit s an d fo r their in tegral parts which are presently being im po rted, low pric ed sm all car units, m an ufac tur in g of car sub-as sem b ly com ponents w hic h are also presently b ein g im po rt ed an d setti ng up of a tractor ass embly plant. Th e PCMIC o ffers to assist Chinese manufactu rers in finding local partners for them since the G ov er nm ent is i nter es ted i n pro m ot in g com peti tio n in the au to sector.. Detailed information on the automobile s ector o f Pakis ta n an d the separat e i nve st m en t o ppo rt un it ie s can b e pr o vide d to in ter es ted i nve s to rs . Cu rrently Japanese car manufact urers have 100 percent share in the local car m a rk et a gai nst 45 per cent in the
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Exclusive Article by M. Yousuf Shaikh - continued motorcycle sector, whereas the Chin ese shar e i n the l att er is 55 per cen t. No tab ly , a bo ut 13 3,972 car s w ere man ufac tured durin g 201 0-1 1, wh ile motorcycle production was way b eyond at 1,535 ,427 units. Any man ufactu rer can inves t in Pakistan under the A uto In dust ry Deve lo pm ent Pro gra mm e (AID P) o r the Tarif f B as ed Sys tem (TBS).The government intends to make the existing policy regime more flexible for new ent rants in or der to att ract foreign investment. An ame nded policy is expecte d so on an d it is emphasiz ed that Chinese man ufacturer s would be per suad ed to exp lore the Pak ist an i market. For an y q uery with res pect to this ar tic le or an y o th er co ntent requirem ent, please contact Editor-inchie f at pak chi na. m ic @ gm ai l. com Th e G ov ernm ent s ho uld we l com e foreign investment. It has helped build Pak istan’s econom y and will continue to enhan ce t he we llbeing o f Pakistan is by support in g econom ic grow th an d pros perity. F oreign inve stment brings many benefits. It supports existing job s an d creates new job s, it enco ur ages in n o va ti o n , it i nt ro d uc es ne w technologies and skills, it brings access to overse as m arkets an d it prom ot es co mpetitio n amo ngst our in dust ries. The Government should reviews foreign in ve st m ent pr op o s als ag ain st the natio nal in terest, cas e b y case . Th is fle xi ble a ppro ac h is pref erred o ve r hard an d fast rule s. Th e c ase by case ap p ro a ch m ax im iz es i nve s tm ent fl ow s, w hile pro tecti ng Pak is tan ’ s interests. Th e P ak is ta n C hin es e Mo tor cycle Industry Council (PCMIC) is please d to provide the following services to fore ign or local Investors in the Auto Industrial sector. • Undertake customized market research and statistic al report s o n th e Pakistan Auto Industry market. • Id entify au tom ot ive prod ucts ; bo th vehicles and components for import and export. • Help find distrib utors and suppliers of aut omot ive products.
• Id entif y a nd ev aluat e pot enti al coo perative or joint ve nture part ners. • Help setup dependab le bus in es s networks in Pakistan . • C onduct le g al, fi nan cial, hum an resources, • Technical managem ent and feasibility studies. • Help negot iate au tom ot ive busin ess deals. • Help with liaison and management of b us i ne s s v en tur e s i n P ak i s ta n. • He lp id e ntif y an d l oc a te l o cal executives and emp lo yees. • W alk o ur cust om ers throu gh the Pa k is ta ni m a z e o f b ur ea ucr a cy. • Serv ices o n a retainer b as is are availab le. The PCMIC Investm ent Han dy Gu ide has a major two- fold objec tive . Firstly, Th e P a k is ta n/C h in a Mo to r cyc le Industry has an emerging inve st ment o pp o r tu n i ty i n pu b l i c/ pr i v a te pa rtners hips to set up an in ventive Researc h & D evelop ment Pro duction Facility. Secondly, this is a much needed industr ial pro ject w hic h is profitable and feasible d ue to a big demand in our loc al m arke t. This promp ts me to draw the kin d an d valu ab le at tent io n o f pro spective in ves tors tow ards what I mention below. The Pakistan Auto In dust ry has b een around for m ore than 60 years, an d today is considered to be a sourc e th at is high ly imp ort an t to o ur country’ s eco nom y. Th e m ot or cy cle in dust ry employs an estim ated 100,000 people. O ve r 2 m ill io n m o to rc y cle s a re m an uf ac tured an nua lly. All au to as sem b le rs -cum- ma nuf ac turers at present are Pakis tani. The majority o f the mo torcycles being manufactured in Pakist an are of 70CC cap acity. Most of the parts used in the frame , suspension, engine etc are interchangeable, or can be used with min or adjustm ents. But all Pakistan i motorcycle manufacturers still depend on fore ign technology and the country is st ill unable to design and prod uce its own motorcycle; especially the engin e an d key parts. This makes it difficult for the industry to deve lop and prod uce ne w m odels/design s to fulfill
Monthly AutoMark Magazine the demand of the m arke t. P ak i s t a n’ s C h in e s e do m i na t ed motorcycle assembling continues to see a stron g growth in t erms of produ ction an d m arketin g an d are f orc in g the in dus tr y an d in ve st o rs to exp lo re alternat ive op port unities ; in clu din g working with international partners and ex p a n di n g i nt o r e s e a r ch a nd deve lo pm ent (R&D ) ser vices . Th e Moto rcycle prod uction has in cr eased from 100,000 units at the start of the century, to around two million units per year. Despit e t his fac t, Pakistan still do e s n o t ha ve a n y de di ca ted m an uf ac turer of the ke y par ts o f mo tor cy cles s uch as the C o mple te En gine , Ca rb ur eto r , Dr ive Cha in , Ti m in g /C am Cha in , hun dre ds o f sepa rate engine co mponents (Cylin der Head, R ing/ Pisto n Se t, Ball Bearings, Bushes, Timing Ch ain , C ran kshaft, and man y ot her components ) and also the Han dle Switches, Lock Sets, Wheels Hubs & Bre aks, Com plete Front an d Rear Shoc k-ab sorb ers in dis man tled condition and Speedometer Movements; ther efo re these are 90% im port ed thro ugh different channels. Moreover, there was a time that motorcycle production was as low as 100,000 units per year whereas this figure now stands at two million units per year. This fact makes it economically feasible to produce ancillary items; mainly the motorcycle engines. The engine is a core part of the motorcycle, and the demand for motorcycle engines is directly related to the demand for motorcycles. The m otorcycle engine marke t has great po ten tial as a res ult o f the b oom in g motorcycle demand. Better performance mot orcycle engines are ne ede d due to the d emand of shif ting fro m stan dard tw o- w hee l m o to r cycl es to m or e sophis ticated and technically adva nced models. Motorcycle engines are in the proc ess of upgrading to low emission, low vibration , lo w nois e and low heat loa d engin es with disp laceme nts over 125cc .
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Exclusive Article by M. Yousuf Shaikh - continued Alon g w ith the sales of three-whee led motorcycles (also known as tri-wheelers) in Pakistan , demands fo r their engin es are also growin g fast. The three-wheeled moto rcycle man ufacturers of Pakistan also do not have th e ability to pro duce their req uired engines. Also , the technology to prod uce su ch en gine s is dif ferent f rom those of two -wh eeled motorcycle engines due to their exclusive features . Hence, internat io nal m arket dem an ds will b e s ati sfi ed by thos e manufacturers that have the R & D and man ufactu ring cap abilities for threewheele d m oto rcycle engines as we ll. Our mot orcycle industry is divided into two markets . The main stream m ark et consists of manufacturers who are from overs eas jo in t ve ntures . Th e o ther market is the nic he m ark et, consisting of SMEs producing Chinese motorcycles. These are Pakistani-owned companies that depend on design and prod uction techno logy from abroad. In this market most of the companies are Pakistani and prod ucts are sold dom estically, where there is litt le foreign com petition. Most of the invo lve d part ies have not been utilizing enough technology in terms of design, man ufac ture and en gineerin g. Due to the im po rtanc e of the Pakistan motorcycle industry, the Pakistan China Motorcycle Industry Council (PCMIC) has plann ed t o invite foreign investors to s et up a support pr ogramm e for a Moto rcycles an d Parts Research an d Develo pment In st itu te & Production Facility under the industrial and services clu s te r gr o up. Th is w i ll en ab l e special iz ed i ndustrie s to have the ca pab il it y to desi gn a nd pro duce mo to rcycle eng in es an d o ther parts wh ic h are s ti ll no t in di ge niz ed in Pakistan. It will be a profitable and risk free investment for foreign investors which helps strengthen the niche market in the future and also provide technology for design, production and engineering for Pakistani parts-makers in order to raise their capabilities. The PCMIC seeks a strategic planning alliance in a public/private partnership that should be targeted at stand-alone parts design and manufacturing. The project is intended to create an automobile platform for Pakistan that would be relayed to the private sector. The secon d phase of the project would
ad dr e s s a uto m o b i l e a n d p ar ts manufactu rers, and the PCMIC would collabo rate with various Gover nment Depart ments like the Military V ehicles Research & Development Establishment (M V R D E ) , M o ST , E n g in e er i n g Develop m ent Bo ard (EDB) etc. W ith such a co ordin ated approach it will be possible to include niche areas of interest to specialist Government Organizations in the develop m ent effort , f our areas would be targetab le:• Motorcycle Engine manufacturing units & their integrals parts presently imported • Mul t ipurp ose La rger Siz ed En gi n es (2 0 0c c an d a bove ) •Af t er Sa le s pa r t s ma r ke t •N e w m od e l s / d e s i g n s o f motorcycles This latest expansion & develop ment of Pa k i s ta n C hi n e s e a u to m o b i l e manufactu rers & k een requirements of localiz ation of motorcycle engin es up to 200cc plu s a b ig deman d of an cillary parts, promp ted me to offer my services as Social entrepreneur and Chairman, PCM IC f or Pa kis tan ; as I f eel m y experience co uld m ake an enormo us difference in the Pak istan Motorc ycle Industry, and thus ensure the su ccess of this effort. As a pio neer of the Chinese Motorcycle Trade & Industry businesses in Pakistan an d m y years o f ex per ie nce in the mot orc ycle trade & in dust ry plu s m y contributio n to ward s the flourishin g develop ment and launch ing of several new m o to r cycle s i n P ak is tan m y ex per ie nce in clu des s enior r ole s in prod uct development, mark eting an d business management. I have more than 20 years of experience in the Motorcycle trade & industry. The Pakistan Chin a Motorcycle Industry Council and their assoc iates are committed to supporting foreign investors, esp ecially Chinese & Pakis ta ni entrepreneurs to deve lop emerging technologies that become the driving in dustries of the future. I am loo king for an oppo rtu nity to set-u p a
Monthly AutoMark Magazine fac i lity fo r a P ak is ta n mo tor cycle industry with extensive experienc e of settin g- up f ac il it ie s f or Pa ki st a ni co mpan ie s o n a glo ba l s ourc in g fo r motorcycles and engine manufactu rin g in Pakist an. These efforts are supposed to fac ilit ate the c reation of numerous co m pa nie s an d tho usan ds o f jo bs . Bein g a Founder & C hairm an o f the PCMIC , I am loo kin g fo r in ve st or s, pa rt ic ula rly C hin es e in ve st o rs f o r setting -up a n in ve ntive res earch & develo pment , and pr oduction fac ilit y with us in P ak is tan to D es ign & Manufacture Pakistan’s own motorcycle en g in e s i n t he p ub l i c/ pr i v a te par tne rs hip. I am kno wn to all top Ch in e s e & P ak is ta ni m o tor cycl e ma nufa cture rs w it h all as pects of In te rn at i o na l s a le s & pur cha s e, establish ing new channels, selection of right design vehicles for specific m arkets, dealing with import/export regulations, develop ing new m odels , fin ding real ma nufac turers a s we ll as m aki ng presentation s at trade shows . It is with great op timism and interest that I take it upon myself to prom ote the Pakistan Motorcycle industry sector in China and to invite global Chinese manufact urers to est ab lish joint ventures in Pakistan . I belie ve that there are several areas in wh i ch I co uld he lp P ak i s tan to str engthen the Pak ist ani m oto rcycle In dus tr y an d als o help to exp o rt mot orc ycles m ad e in Pakistan in the Internation al market. The PCMIC prop osed plan of inviting foreign investors to set up an inventive res earch & develo pment f acility an d cen tre of exc ell ence of m o to rc ycle engin es at Sunder In dust rial E st ate, La hore, is m ean t to ens ure that the co u nc i l i s a b l e t o p r o v i de a comprehen sive development capability in thes e im po rt an t an d in terl in ked market sectors. Engineers at the centre wo ul d b e ab le to del iver turn-k ey mo to rcycle pro je cts in clu din g sm all en gi n e p r o gr a m d r a wi n g s an d tech no l o g y f r o m a cr o s s C hi na . The prop osed project will be carried out by Ch ina base d Chinese M anufactu res an d Paki st an ’s C hi nese Mo torc ycle As s em b l er s th ro u gh P CM I C , i n coo perat ion w ith the MVRDE , Loc al parts Vendors and fin ancial institu tes. The project is expected to be co-financed b y all the s tak eho l der s a nd the Governmen t. The Government is b eing requested to kindly provide interest free loans & allow a tax holiday for five years
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Exclusive Article by M. Owais Khan - continued dealers for misusing im port of used cars policy. Overseas Pakistan is be advised to get cleared t heir cars from Cu stom s with clearin g an d forwardin g agents. To disc ourage and avoid m is use of gift, b agga ge a nd tran sf er of r esid ence sc hemes to overs eas Pak ist an is the gov ernment s hould im pos e ba n on trans fer/ sale o f cars/ve hicles to an y other person for one year from the date of im port of ve hic le in the co untry. In truc ks, he sa id at pres ent tru ckin g industry is facin g severe crisis because of av ailab il ity o f larg e q uan tit y o f impo rted u sed t rucks in the market on cheap rates as co mpared to Hin o and N is sa n Tr uck s . U sed tr ucks w ere im po r te d un der va ri o us b ag ga ge schemes and available in the ran ge o f two to Rs 2.5 m illion per tru ck while new truc ks rates are in the range of Rs five t o six million per truck . Besides that, he said, tractor industry would also be facing difficulties in sale of tr act ors due to recen t in creas e in tractor p rices and impo sition of 11 per cent sales tax with effect from Jan uary 01, 2013 an d onward previous ly sales tax at five per cent w as app licable on tr act or s up till 3 1, Decem ber 2 01 2. Therefore, yet we have to see the imp act on sales of tractors in comin g mo nths.
Director Marketing Division, Indus Motor Company (IMC), Ali Asghar Jamali said his company had already observed at least 56 non production days (NPDs) during JulDecember 2012 as used cars arrivals continued to hit the company and other assemblers. He said that in January 2013 the company will observe four to five NPDs and it will hopefully also be undertaken in February 2013 depending on demand. “I thin k tha t the s ales of lo ca l car industry will remain under pressure till June 201 3 owing to arrival o f 6,0007,000 u sed vehicles in Decembe r 2012 an d in pipeline coupled with unsold sto cks of 2 0,000- 25 ,000 units in the co unt ry a t us ed ca r dea le r sh ip
networks,” Jamali said. Usually January to June period of every year has always remained promising in terms of sales but this year the situation will b e different as used cars entr y in the country continues . “Th e loc al car industry will take som e tim e for recovery wh en i nflu x of used car s w ill st op com pletely,” he said. Th e IM C exe cutive said that as per gov ernment’s dec ision the imp ort o f used cars should have be en sto pped by Decemb er 1 5, 2 012 b ut it is going on. Off icial spok esperson of Pak Suzuki Mo to r Co mpan y Lim it ed (P SM CL) Shaf iq Ahmed Shaikh said that the car industry is not highly alarm ed over law and order and political uncert ain ty as peop le buy cars as per their requirement under any circum stances. “We are more concerned over economic indicators and rupee-yen parity,” he said ad ding the ru pee s hould ap preci ate against the Ye n an d o ther currencies this year s o that prices of cars co uld remain stab le. Another concern of the aut o industry is the p rac tical implementat ion of Auto Industry Development Plan (AIDP) II this ye ar an d long term policies to ke ep the industrial production brisk in 2013.
Another leading car assembler said he is cautiously optimistic now but the industry may perform well after the outcome of general elections and complete sell out of used car stocks from the used car dealers.
Monthly AutoMark Magazine The general elections and sale of unsold st ocks of used cars in the next months may hold a lot interest for the in dustry but Yen- Rupee parity is als o very im portan t for consumers’ po int of vie w as it directly make s an adverse imp act on local car prices. Whil e the i ndus tr y claim s that car segme nt has ac hieved 55- 70 per cent deletion depen ding o n v arious en gine po we r cars b ut the assem ble rs have always b een pushing up the prices taking the excuse (whether genuine or artificial) of ru pee devaluatio n again st Ye n and US dollar. Th e gov ernm ent has never seriously inve st igated wh ether the as semblers ’ claim of achieving deletio n le vels ho lds an y reali ty or it is ju st in pap er s. Taking the curre ncy flu ctuation issu e, the Pak Suzuki Motor Company Limited (PSM CL) has raise d the prices of it s various cars by 15 per cent in 2012 while only Cult us prices had been surge d by nine per cent. In dus M ot o r C om pan y (I MC) ha s increase d the prices by six to eight per cen t i n 2 012 wh ile m an ufac turer o f Honda cars have p ushed up price s by six to s eve n per cent in Ho nda Ci ty follo we d by 1 2-17 per cent in Ho nda Civ ic . T he price hik e is high due to complete change in Honda Civic m odel. Rupee has lost its value by eigh t to nine per cent against Dollar in 2 012 while Yen has appreciated against Pak Rupee by nine per cent.
Used car dealers are unhappy over the government’s decision of reducing age limit to three from five year saying it will be tantamount to closure of trade of used car dealers in 2013. They fee l that the government has not realize d that consumers will continue to rely o n co stly Suzuki Mehran of 25 year old model which has not improved over tw o decad es. They said that the gov ernment has actually punished t he mi ddle cla ss co nsum ers . “W e have creat ed a o ne b ra nd m ark et thus creat in g a m ono po ly o f a 800cc car assemble r,” they s aid ad ding that till how long the gov ernment will continue to be blackmailed by the assemblers and are 3 0 years not en ough.
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Automotive - Post event report
by Mohammad Owais Khan
Pakistan Pakistan Auto show (PAPS-2011) (PAPS-2011)
T he Pakistan Auto Pa rts Show (PA PS 2 011 ) organ iz ed in th e co u ntr y’s his to rical cit y an d heart of P unjab -Lahore fr om Oc tober 2 4-26, 2011 by P ak is ta n Assoc iatio n o f Autom otive Part s an d Accessories Man ufact urers (PAAPAM ) – succeeded in pulling up thousands of visitors. For many people, who just drive two to fo ur wh eelers sim ply, the exhib itio n offered an open o pportunity to see the ach ie vem ents of the loc al as semblers and vendors and their huge investments an d their share of op enin g new jo b avenues. The exhibition was also a morale booster for the engineering studen ts who aft er ge ttin g thei r degrees w ould join the vending industries or some local car and bike asse mble rs. Apart from the contribution of local auto in dust ry ma ny vis it ors an d peo ple thought that one of the prim e stuffs was miss ing f ro m the mega show. In other parts of the world such kind of exhibitors definitely off er som e t hing new t o the visitors like new m odels o f cars, bikes and other assembled items bu t in PAPS 201 1, th e visitors were seen sea rching f or in n ov at ive pro ducts a nd new technolo gies f ro m as sem b le rs an d vendors . At least in two wheelers 70cc the buyers looked tired to see the old mod el of both Japan ese an d Chin ese ve rsions with only a difference of petrol tank and side cover st icke rs , speed o m eters, s hock absorb ers, indicators etc. These kinds of exhibitors usually attract
b oth foreign b uye rs and visitors either held in Karac hi o r in Lah ore but the three day mega exh ib ition lacked an y sizable presen ce of foreigners and even by the joint venture partners of the local vendors wh ich was definitely a cause of concern. Law an d ord er was def in itely not a serious issu e in Lahore as com pared to Ka rachi. Ho we ve r , r is in g poli ti ca l tension b etween PM L-N chie f Nawaz Sharif and chief of Pakistan Tehrik -eInsaff Imran Khan in Lahore for holding separa te h uge political gatherin g so on aft er PA PS 2011 had taken L aho re b y s torm . But these po lit ical s hows had no thin g to do w ith the PAP S 2 011 .
Th ese p re-event developments can not b e b lam ed for very thin attendan ce of f ore igners especially in Lah ore but it seemed that the o rganizers of t he sho w -- PAA PA M -- had f oc used m ore to ens ure huge par ti ci pa ti on of lo cal people, students an d general public in ord er to create an awareness abou t the w o rk in g a n d ac hi e ve m e n ts o f a ss em b le rs a nd v endor in dus tries b esid es highligh ting them ab out the dele tio n ta rgets a chie ve d s o far in various vehicle s. P AAPA M m e m b er s hav e al rea dy ac hie ved 70 per cen t loc aliz ation in passenger cars and LCVs, 90 per cent in two wheelers and tractors and 45 per cent in heavy veh icles. In a surprise move the PAAPAM did not ext end an y o ff icial in vita tio n to the engineering universities and institutions of Lahore and surroundin g areas for the part icip ation of their students. Instead, m an y s tuden ts at ten ded the s how on their own w hile many did not bother. Th ere w as als o an online registration f acility at the S how in ord er to avoid people standing in lon g q ueues before entering the exhib ition halls. Howe ver, the PA APA M h ad not forward the on line data to the contractor of the sho w due to ve ndors ’ b usy s chedule. As a result, most of the visitors had to make entry pass. J ust f ew day s b efo re PA PS 2 011 in L ah or e, the Tr ad e D e ve l op m ent Authori ty of Pa kis ta n (TD AP ) had o rganized EXPO 2 011 at Karachi Expo Centre in which the government invited 60 0 fo rei gn dele ga tes o n i ts ow n expenses. P APS 2 01 1 a s per br o chur es an d i nfo rm a ti on a vail ab le wa s m ai nly s uppo rt ed b y Sm al l an d M ediu m
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PAPS-2011 - Post event report
Monthly AutoMark Magazine
The exhibition was also a morale booster for the engineering students who after getting their degrees would join the vending industries or some local car and bike assemblers E nterp ris e D eve lo pment Author it y (SME DA ), E ngin eering D evelop ment B oar d (ED B) etc in s tead of TD AP . Market s ourc es say that there was no contri butio n o f the g over nment i n organizing this event and it was 100 per cent fin an ced b y the PA APA M its elf .
Either the PAAPAM or TDAP did not communicate with each other for some kind of collaboration to sponsor this event or it was because of some other political issues. Many people think that if 25 per cent of foreign delegates, who attended the EXPO 2011 in Karachi, would have arrived in Lahore then the PAPS would have definitely got the boost. No can deny that the Pakistan Auto Parts Show 2 011 has b eco m e the larges t s howc as e o f Pa kis tan ' s engineering export merchandise and services but the go ve rnm ent did not treat it as per potential of local car, bike and vendors’ r eve nue co ntr ib utio n to w ards the nat io nal kit ty an d hug e employ ment b ase. Howe ver, the success of the exhib itio n had enco uraged vendors who prom is e to hold t he PAPS 201 2 in Ka rachi with m ore num ber of stalls set by o ver 120 part s make rs and leading c ar, bike and tr a cto r m ak e r s in PA PS 2 0 1 1 . PAA PAM did m ake hectic effort in last one year for making the exhibition more powerful and a success story but vendors w ere no t s at isf ie d wi th the Tra de D eve lop ment Authority of Pakis tan (TD AP), whose sole task was to arrange such events, as the Authority h ad never b ot hered to s uppo rt in this reg ard. In a pri nt m edia r epor t P AAP AM chairm an Nabeel Hashmi had said that 6,000 invitations were forwarded to the f ore ign co unt erp arts com pan ie s but their thin parti cip atio n im plies that TD AP had no in teres t to at tr act the f o re ig n co m pa ni es or in ve st o r s . He said the TDA P had neve r supported the au to s eminar o r exhib ition in the country. The PAAPAM central chairman
said that his association intended to take part the foreign auto exhibitions, making the arran gem ents for 100 m embers to vis it there, b ut the Authority never pr ovi ded a ny help in this r egar d. N ab eel Hashmi stro ngly deman ded of the gov ernment to ensure adequate and exc lus ive exp ort pr om oti ons fo r the engin eering sect or. H e s ai d tha t G erm a ny, w it h th e collaboration of its government agencies, holds the world’s largest auto exhibition eve ry year. In this exh ibition only 16 com panie s fo rm Pak is tan partic ipate wh ile from India 650 and from China o ve r 1,800 au to fi rms disp lay their produ cts. He claim ed that this was the f irs t exh ibition in the hist ory o f Pak ist an wh ose data base was contro lled by us an d the PA APAM itself has develo ped sof tware in this regard. It would have been a wise decision that both PAPS and EXPO 2011 would be held with a gap of few days in one city either in Karachi or Lahore for bigger participation of foreigners and local guests. O ne o f the r easons fo r not in viting f ore ig ners to PAP S 2 01 1 wa s s hee r absence of new technology. For example, 19 93 design 70cc CDI bike, introduced b y m akers o f Honda bik es, are now b eing rolle d out by the Chin ese bik e makers by changing the stickers of petrol tank and side covers, indicator and back light covers, speedo meter etc. So there was nothing new for consumers to show ext ra enthusia sm w hile s eein g the decades old 70cc bikes. E ven the 100cc bike s bein g prod uced b y Chin ese b ike ma kers, as a lread y produ ced b y Atlas Honda, has n othing new to of fer except fo r a big price difference in bo th 70cc and 100cc bikes am ong Chin ese an d J apanes e m ad e bike s. Same is the case with 125cc bikes. People got fascinated by 125 Euro model of Honda but its price was too high bu t not for pow erful gr owe rs o f various cr op s wh o w ere it s m a in b uye rs . In cas e of car s, the thr ee le ad in g Japanese c ar makers of Toy ota, Suzuki an d Honda -- h ad set u p their stalls at PA PS 201 1. Pe op le we re s een m or e curious at Toyota stall where the Indus Mot or C om pany (IMC ) had parked a
Toy ot a Corolla car showing it s half of it s sid e in a raw fo rm depic tin g the co mple x an d techni ca l pr oc edures in volv ed in its assemblin g. This display was aim ed enough to ju stif y its high price also. Th e manage ment of Pak Suzu ki Motor Com pany Lim ited (PSMCL) was clever enough to hire some dancing girls and boys on rent to shake and drum the hall w it h l oud spe ak er sys tem a s the m an agement knew that PS MCL had been rolling out decade old models and at least dancing of the girls could at least help dive rt the attention of the visitors towards the Suzuki stall. This kind of cheap promotion of vehicles with the help of dancing girls and boys ha d s urp r is ed m an y au to cri tic s . Howe ver, the IM C had also hired som e three to four girls but they were tasked to m ot ivat e the visit ors by provid ing them information about the cars on spot ra ther than entic in g them thro ug h various kinds of act s. Many people think that the PAPS lacked presentatio n o f an y new tech nolog y eith er in cars, motorcycles or any kind of new product by the vendors. Many of seas oned PAAPAM m embers either did not arrive from Karachi o r ot her parts of the country nor did the y set up their st alls. As the Associatio n ran advertisement in U rd u Medi a f o r f re e entr y m an y unin vited gu es ts had thro nge d the exhib ition in larger numb ers and due to security lapses many exhibitors had lost their lap tops, cameras, mobile ph ones etc. T he E xh ib it ion lacked presence of lu b rican t m an ufa cturers an d o ther producers of accessories involved in both car and bike manufacturing wh ile three tir e m a nufa cutrer s we r e pr ese nt. PAAPAM shou ld have allocated one hall to the non m embers of PAAPAM so that they co uld present their it ems fre ely . Som e b ike a ss emb le rs had tri ed to attract a number of visitors by managing daily lucky draw b esides holding concert. Chief Exe cutive E DB A itzaz Niazi gave goo d new s at the exhibition that au to part s export s had reach ed $80 millio n in 201 1 an d it may become double in coming years ......
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Monthly AutoMark Magazine
Face to Face - Interview
Exclusive Interview with Mr. IHT Farooqui, General Manager –Plant Operations at Karakoram Motors (Pvt) Ltd. 1. Kindly brief us about Your current Job Profile and the Role you are Playing in your Organization? Sin ce year 2 009, I am w ork in g as Ge neral Manager –Plan t Operations at Karakora m Motors (Pvt) Ltd. (formerly Nay a Daur Mot ors) . This compan y is o wn ed b y M/s AW B r ot her s. Th e company is as sembling a 800 cc Mini Truck, 50 and 70 cc Motor cyc les an d recently entered into a TCA with Chery Auto m ob iles o f C hin a f or the lo cal assembly of Chery QQ cars in Pakistan . The company also bought the total assets o f D yna s ty E le ctric C ar s f ro m a Canadian firm. Reporting d irect ly to Chief Exe cutive , I am re spo ns ib l e f o r ov era ll pla nt o per atio ns, in clu din g Pr oductio n, , Supply Chain, Pro duct Develo pment , Q ual ity C ontro l an d Maintenan ce . Responsibilities in cludes Id entification of new viable project ,project evaluatio n an d fe as ib ili ty an a ly s is , dr af tin g , nego tiation and fin aliz ation of project contract, product costing and approvals from com petent aut horit ies, Planning an d im plementation o f Manufacturing processes o f ne w and exist ing prod uct o pera ti on s ,D eve lop m en t o f in f ra st ruc ture for smo oth prod uction flow , Also responsible for P&L accounts, KPI’s ,Stra tegi c B usi nes s Pla nnin g an d deci si ons , Lo ng a nd Sho rt ter m Planning,, Marketing and Sales Planning and HR issues. My key achievements during this short stay are; - Deve lo ped a le an o rgan iz atio n by reducin g s ignificant num ber of st aff wh ile m ainta inin g prod uctio n le vels through a redesign op erational process, jo b r ot ati on, an d st aff prof ess ion al develop ment. - Imp lem ente d Japan ese p rod uction m etho dologi es to co ntr ol cos ts an d i nv e nto r y b y re du ci ng w a s tes , successfully introduced 5 S, Andon and
Small group activitie s - Fi nal iz ed TC A an d o th er le g al agreements with M/s Chery Automobile of China for local man ufacturing of 800 cc Chery QQ c ars in Pakist an. - Exe cuted, maintained and managed p r o j ec ts f o r w a s te r e d uct i o n , pro ductivity and continuous im pr ovement in it iatives an d quality enhancement opport unities. - Id entif ie d an d exe cuted s olu ti ons related to process flo w within the plan t by applying m anufactu ring engine ering prin cip les to imp rove effic iency such as Pareto , tim e studies an d design e xperiments . 2. Being a leader is not an easy task, what essential leadership skill do you think a person should posses to be a successful leader? Being a leader is re ally not an easy task, every lead er have some followers an d s ub or din at es , all o f the m w o rk ed to gether for achieving the obje ctives of an organ iz ation. The leader is just like an elder brot her to them all he ,plans, o rg an i ze an d co ntro l th e var io us ac tivit ie s to ac hie ve the go als in a planned way . He should be able to solve the difficultie s an d pr oble ms of their subord inates an d should have cou rage to take responsibility of failures (if any). A g ood le ader m ust poss ess a Goo d personality, have Patience and toleranc e qualities, Be able to coach and guide his subord inat es, Sh ould pos ses excellent human, administ rative, innovative and in i ti at ive q ualit ie s an d be ab le to co mmunicate at all le vel. 3. What Are You Doing To Ensure that You Continue to Grow and Develop as a Leader? To become a leader and to maintain this position, demands continuous education ,upda ti ng o f kn ow le dg e an d s k ill developm ent, I daily spare some tim e
t o re a d b ook s, b ulletins, an d new s papers to keep myself upda te i n a ll the importan t issues like F in a n ce and Accounts, Marketing an d sales, Admin is tration , an d HR, G o v e r n m e n t p o l i ci e s , r ec e n t developm ents in related prod ucts an d PR with the competitive indust ries. To upgrade my edu cational q ualific atio n I took admission in the M.Engg program in Engineering Managem ent in N ED Engineering University where I studied industry related subjects like, Op erations Researc h, Total Q uality Management , Strategic Plan ning and dec is io n, Agile an d Lean Manufacturing, Automation an d C ontro l, Fin an ce an d Accounts , Project Planning, Project Evaluation and Feas ibili ty Analysis , Orga ni zat ion al B e h av iou r an d M ain t e n an c e Man agem ent like co ur ses, Th ese all courses help me to manage and achieve my organizational t argets and goals in a s uccessf ul w ay. I als o visit ed m any countries and got train ing in Japan and Maruti India for s ome time. 4. What advice would you may give to upcoming management leader? A good lead er is a prim e asset of any o rgan iz at ion . He s hould be a ble to professionally sou nd in his field be able to demonst rate his skills by doing the process by his o wn hands .H e should be ab le to understand the organization’s lo ng an d s hort term s plans, s hould understand financial , marke ting, sale s, logistics ,and administ rative is sues.. A go od lea der is r equired to contin ue upda te h is ed ucat io n, s k ill s an d k now le dge not only in his rel at ed pro fessio n bu t also in the abo ve stated f ie ld s, He s hould also deve lop his subord inates and help them to updat e their field knowledge by imp arting them trainin g , nom in ating them for s om e certif ic ate co urse s , dele gatin g them
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Monthly AutoMark Magazine
Face to Face - Interview
I started my career as a trainee engineer production in an automobile assembly plant. Mr Akbar Khan was my first boss who always stands with me during the difficult time, he taught me the skills of dealing with the labor, handling CBA, line balancing, developing process sequence and provided all necessary assistance when ever and even today required. Mr Abdul Majeed Sheikh is my alma meter he guided me in planning, project implementation, and project contracts, tendering, writing TOR , managing training and seminars, I am really impress with his way of working, managing difficult situations, imparting responsibilities to subordinates and drafting feasibility reports som e po we r to organ ize an d man age their w or k , ad m i re their s ucces s publically. They should also develop PR in every important se ctor . 5. How do you as a leader make sure you are connecting the right dots? (Avoiding mistakes – both in your personal as well as profession). Decidin g what you want t o becom e in future and then plan the route to achieve it is a to ugh jo b, when y ou make you r rout e th en you should know t hat wh at are the pre-requisites to be on the target in a shor t s pan o f time . Yo u can not reac hed to a top slo t until an d unles s you did not mas ters your self in all the related areas , I can say that I have connected the right dots that’s why I am now at a good po sition and o ff course this is no t the end. 6. Who has most influenced you in your life so for and why. I starte d my career as a trainee engineer prod uction in an autom obile assembly plant. Mr A kbar Khan was m y first boss who always stan ds with me d urin g t he difficult time, he taught me the skills of dealing with the labor, han dling CB A, line b ala nci ng, deve lo pin g pr oc es s sequence an d provid ed all necessary assist an ce wh en e ve r an d eve n today require d. M r Abdul Majeed Sheikh is m y al m a m eter he g uid ed m e in planning, proje ct im plementation, and pro ject contracts , t ende ring, writing TOR , managing training and seminars, I am really im press with his w ay o f working, managing difficult situat ions, i m p a r ti n g r es po n s i b i l i t i es t o subo rdin at es an d drafting feasib ility reports. Mr W as eem Haqqie Managing Director of my first company, he guided me to develop PR, understand Finance,
eva lu a te f eas i b il it y r epo r ts, a nd nego tiate wi th the fo rei gn O EM s. 7. As a leader how do you deal with the gravience of an employee in an organisation and handle the issue appropriately? Alt hough there are set proc edures to ha ndle the gr avie nce o f st aff , but I always prefer to handle and settle the is s ues at m y le ve l, no rm a lly the gravie nce are ab out the w ork loa d, superviso r b ehavior and leave issu es , these iss ues are normally solved at my level by adjust ment, by relocating or by dis cus s in g wi th th e sup erv is o rs . 8. What are the Most Important Career Decisions that You Have Made Along the Way? To take admission in Master programme af ter a gap of 28 years of graduation. It was ve ry di ffi cult but I man ag ed it success fully . The ot her one was a job offer fro m General Motors in US A but I pr eferred to s tay w ith m y fam ily. 9. We have so much technical talent in our country, Then also we don't see any single tech product coming out. Where are we lacking and how can we make significant effort to improve our countries technical aspect. As ians are number o ne, o ur yo uth is capable of doing much better work than the EU countries, Tale nt hunt from t he Universities an d pro fessional co lle ge s is the deman d of the day , every idea should be seriously en tertain, everyone should now where is the platform, where he s hould go to demo nstrate his work, who will provide him necessary fund s to develop his p rod uct, from where he can ge t the tec hnical suppo rt, there should b e clo se liaiso n b etween the
Univers ities an d Industries. We can do the m irac les Scie nce is in ve nted b y Asians not by t he EU. 10. Kindly tell us about your family background. I belon g to Farooq ui f am ily. Farooqu i is a multili ng ual com munity spread across Turkey, R omania, Afghanist an, Pakistan, India and Ban gladesh. Sheikh Ib rah im Bin Adham, wh o was the great gran ds on of U m ar ibn al Khatt ab , traveled up to Afghanistan in his quests. One of his great grandson, Farrukh Shah Kabu li, w as the ru le r of Kabu l an d Ghazni. Farrukh Shah's son died fighting Halaku Khan (the grandson of Genghis Khan). Th e f amily g ot upro oted an d most of them moved to Punjab . The re, on e o f th e g re at gr an ds o n B ab a Farid mad e a nam e as a S ufi Saint and also traveled to Delh i. One o f his great grandson, Naseeruddin Chirag-e-Delhi, also made a name as Sufi S aint, When the Mughals mo ved South, some of Shaikh Naseeruddin' s childr en m oved to the state of Deccan where they got posts as QA ZI. Refer http://en.wikipedia.org/wiki/ Farooqi My fath er (Late) Pro f. M oiz Farooqui wa s a l ead in g pro fes s or of Sin dh Universit y , he was Ge neral Secretary an d than V ice Pr esident of Studen ts Union of Urdu College, he was an active mem ber o f 19 53 st udents mo vem ent regardin g the variou s anti government policies to wards the students we lf are. My mother Syeda Khawaja Beagum was V ic e Pr i nci pal o f FG Scho o l o f Hyderabad, I have two brothers and one siste r.
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Monthly AutoMark Magazine
Automotive Sector - Update
Two firms increase tractor prices Tw o l oc a l tr ac to r m an uf ac turi ng com panie s repor ted ly increas ed the pric e of tractors b y five percent in the wake of the rate of Ge neral Sale s Tax (GST) was raise d to ten percen t fro m five percent effective from January next year. Sources told media that in January last year, the government had reduced GST on tractors to 5 percent, from 16 percent, b ringing do wn tractor prices to Rs 90,000. The move was aim ed at helping the tro ubled local industry but tractor m an ufac tur ers did no t pas s o n the imp ac t to farm ers . "Price of tracto rs should have been reduced to at least Rs 90,000 per tractor b ut man ufactu res did not im plement the d ecision of the ECC in its tru e spirit," said an official w ho did no t w an t to b e n am ed. Accord ing t o a letter of Millat Tract ors Li m i te d s e nt to a l l b a nk s a nd departm ents concerned becau se of the increase in input cost, it is not poss ib le for the co mpany to maintain the price of Massey Ferguson tractors. Hence, the
price of MF-240 has been increas ed by Rs 30 ,500 fr om Rs 610,0 00 to Rs 640,000 f ro m December 12 , 2012 and onward, and price of MF-260 is now Rs 703,000 from Rs 670,000 showing an increase of Rs 33,500 per tractor. The pric e of MF 385 has been raised to Rs 1,533,000 from Rs 1,460,000 showing an in cr ease of 7 3,00 0 per tracto r. Howe ve r, the abov e price will not be applicable to the orders rec eived under the Green Tractor scheme Punjab 2012. Al- Gh azi T racto rs Li mit ed has als o decided to increase pric e of diffe rent models up to Rs 73,000 from January 1, 2013 . The co mpany m ainta ins that inf lat io n rate in the c ountry is s oaring da y b y da y a cc o rd i ng l y r up ee
depreciation is also challe nging the entire manufact uring sector. Th e co m pan y, in i ts le tter to the concerne d ban ks and department s said tha t in vi e w o f pe rs i s ten t a nd unavo idab le demand for price increase of co mponents f rom vendors, s elling pr ices of it ''s produ cts will be revised upw a r d f ro m J an ua r y 1 , 2 01 3 . Th e price o f 480 S(5 5 HP ) will be in crease d b y R s59 ,000 to Rs649,000 from Rs590,000 whereas 480 Power(55 HP ) w il l b e R s 671 , 00 0 ag a in s t Rs6 1 0, 000 sho wing an in crea se o f R s 6 1 ,0 0 0 . T h e n ew pr i c e o f G ha zi(6 5HP ) w i ll be Rs720,000(Rs65,500 increase) followed by 6 40 (75 HP) Rs9 52,500( Rs 86,500 increase), 640 with Dis c brakes(75 HP) Rs 962,500 (Rs87,500 increase), 640 S (8 5 HP ) R s 1 ,0 45 ,0 00 (R s 95, 00 0 in crease ), 640S with Dis c b rake ( 85 HP) Rs 1,056,000( Rs 66,000 increase), 55 -56(5 5 HP) Rs 726 ,000( Rs 66,000 increase and 60-56 (65 HP) Rs808,500 (Rs73,500 increase).
Agri sector suffered Rs 219b loss in 2012 The country's agricultural sector suffered Rs 219 billion lo ss in 2012 and Punjab co n tr ib u ted m a j o r s ha r e i n it . Pakistan Agri Forum Chairman Ibrahim Mughal is o f the view that f ailure in ac hie ving the prod uctio n targ ets o f major and small crops led to this huge loss to the national eco nomy. “It (loss) wo uld b ring foo d in security, furt her unem plo yment and threat en already deteriorating law and order situation in the co untry,” he s aid wh ile t alking to reporters here on Thursday. T he dat a r eve a le d tha t P ak is tan produ ces fo od crops o f worth Rs1050 billion per annum includin g wheat, rice, barle y, maiz e and ot hers. Sugarc an e, co tto n a nd to b a cco , w hi ch a re consid ered cash crop s, s hare Rs 750 b il lio n per year to the coun tr y' s eco nom y. Sim ilarly , pulse s wo rth is Rs50 billion per an num, oilseed crop s Rs90 billion , vegetables Rs103 billion, fruits Rs213 billion, m ilk Rs1104 billion, beef Rs513 billion, m utton Rs33 8 billion,
poult ry Rs 126 billion an d eggs worth of Rs131 billion . Th e agriculture sector perform ance d urin g year 2012 showe d tot al prod uctio n of agricultu r e a nd livestock sectors is Rs4469 billion which contr ib uted 2 2.3 4 per cent to the natio nal GDP. Accordin g to figures provided, Ibrahim said, wh eat fell short of its target of 25 million tons by 1.5 million tons in 2012, rice prod uctio n remained 6.1 million to ns against the targe t of 6.5 million tons while c otton's target w as stagnant at 15 million bales since last eleven years. In 2012, the country produced only 13.6 million bales and country had to import 1.4 m illio n b ales to m eet the textile industry needs. About minor crop s, he said gram pulse, wh ic h is cons id ered m eat fo r po or mass es, had lowest ever per acre yield dur in g this year a nd irony was that present agricu lture minister of Punjab province hails from the same area where this crop is cultivated. He said that per
ac re yie ld o f gr am i n 19 48 was six mau nds per acre wh en there were no research facilities like today's but in year 2012 it remained 2.2 m aunds per a cre. He said that f our dist ricts o f Pu njab in cludin g Layy ah, Bhakkar, Mianwali and Khushab suffered Rs 22 billion loss dur in g 2 012 due to decline in gr am production. He regretted that this sector wh ich en sures foo d security, provides raw mat erial f or 73 per cent o f the national expor ts an d livelihood to 65 per cent of the population living in rural areas, is b eing neglected. Punjab was w orst- hit as it suffered Rs 40 billion loss due to decline in wheat pro duction, R s 17 billion in rice, Rs 3 9 billion in cot ton an d Rs 22 b illio n in gram crop due to production decline. In to tal, p rovince suffered Rs 11 8 b illion loss due to decline in these four c rops. “Country failed to achie ve the re quired gr owt h in mutton an d b eef sector. Th ough poultry sector ach ie ved sligh t g ro w th b u t i t w as no t eno ug h.”
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Official Supporting Magazine for Pakistan Auto Parts Show 2013 Karachi - Pakistan
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by Meer Ali Buksh from Toyota Western Motors
Monthly AutoMark Magazine
Problems of Pakistani vendors The automobile sector in Pakistan, was completely dominated by Japanese companies and Japan’s share in car and truck market was almost 100 percent and it had almost 50 percent share in the motorcycle market Th e do mes tic Vendo r in dus try has tremendously developed during the last few year s ma in ly b y in ve st in g huge cap it a l b ut als o wi th the help o f ag reem ents wi th wo rld r eno wn ed eq uip m ent m aker s f or te chno lo gy tr an sfer, wh ich inclu de hund reds o f components such as bumpers, radiators, muffle rs, bat teries, tyres, wh eels, airco nd it i o ne r s , w i r in g ha rn es s es , instrument panels, steering wheels, sunvisors, seats , c arpets , interior pan els, shee t metal and plastic p arts. All of t his is being loc ally produced by more than 400 ve ndin g com pan ie s that entail alm o st 2 .2 m illio n s kill ed wo rk ers directly an d indirectly. Th e domest ic auto parts manufactu rers are feeling the bru nt of this trend as the dem and for loc ally prod uced ve hic les has slo wed down , wh ich is eviden t from the fac t that siz e of local m arke t has shrunk to currently 30. In 2 005 -06 the Go ve rnm ent had allowed import of 10 years old vehicles. But aft er a st rong representation fro m the local asse mblers, the im port s have been co ntinuously f alling s harp ly . In 2006-07, the age limit was reduced t o five year s an d im po rts fell to 42,000 units. In 2 007- 08 , the age lim it was further slashed to three years. In 200809, the gov ernment had im posed 50 per cen t regu lat ory duty f ollowe d b y 12.5 per cent increase in customs duty and cut in depreciation to one per cent from two per cent. But the Federal Board of Revenue (FBR) has not revised the duty structure on im port of used cars for the last six years, as the taxes paid at im port stage are fixed in US dollar which were determined in 2006. The influx of used cars in the count ry has b een tak ing a heavy toll on local auto assemblers wh o purchase 60 percen t of the au to part s f r o m do m es t ic m a n uf a ctu r er s . Hundreds of components such as wheel rims , tyres, batt eries, radiators , ot her
sheet m etal parts an d plast ic parts, wh ich are p rod uced by local ve ndors, are now being im port ed for these used cars , at the co s t pr ecio us f or eign exchange. In previous one year almost 50,000 used vehicles have be en imported, which is the 30 per cen t o f the tot al m ark et demand for automobiles in the country, caus in g a los s of over Rs 1 4 b illion revenue in terms of relaxations allowed pertaining to depreciation allow ance. It was strange that most of the imported cars of 1000cc (or high er) su ch as Vitz, Co ro lla, B el ta, P remi o, Axio , Mira, Prob ox, Lan d C ruis er and Paje ro are bein g s old in the pric e ran ge of Rs 1.1 million t o Rs 3.5 million. The automob ile sector in Pakistan, was com ple tely do min a ted b y Japan ese companies and Japan’s share in car and tru ck market was alm ost 100 percent an d it had almost 50 percent share in the motorcycle market, besides having a m ajor share of the mark et in ot her ve hic les . Howe ve r, the share of lo cal co ntent ne eds to be increase d, as “we st ill imp ort almo st 50 percent o f the a uto m o tiv e par ts ” . T he re i s an op port unity for Japanese inve stors to fill the r emainin g half, as it will cut man ufac turing co sts in Pakistan and enha nce pro fi ta bi lity o f J ap an ese inve stors. The Auto vendin g base is the backbon e of our Engineering sector and warning the dam age to this base wou ld tak e the engineering s ecto r 2 0 years bac k. The quality an d the stan dard of parts and accessories, manufactured by Pakistani vendors, was monito red and approved by the international licensees and principals. It was a matter of pride and prestige for Pakistan that the local tr act or parts we re bein g exp ort ed to E ur op ean an d Amer ic an co un tr ie s b ecau se o f their high q ualit y an d stan dard. But unfortunately vending industry has
started to collapse as mo st of the vendin g un it s h av e b e en forced to close down and many more were at a poin t of s hut do wn due to no n tr a n s pa r e n cy i n Meer Ali Buksh new ly i ntro duced tariff based system by the government. Stated by the Central Vice Chairman of PAAPAM, Malik Mohammad Aslam.The investors are discouraged and no further inve stment in this sector shall be made in the com ing p eriod . The govern ment has to reduce cos ts of im ported inputs for auto component man ufacturing and sough t reduction in Sale s Tax rate from 1 6 per ce nt to 12 perc ent, b esi des prop osing cut in Incom e Tax rat e f ro m 3 5 per cen t to 2 0 per cen t. H e als o disp ell ed the per cep tio n that loc al industry is man ufacturing substandard pro ducts. "W e are makin g p ro ducts as per design specificatio n and q uality as required by our c ustomers ," Necess ary st eps shall also be take n to discou rage im port of used cars which is eating away the Vend ors in Pakis tan," Th e PA AP AM C hai rm an sa id the As sociation has c onclud ed its series of meetings with th e variou s government organizations on the an nual budget and appre ciated Deputy Chairman Planning comm iss ion for unde rst an ding their position on tariffs and his comments to support R&D and a co mpetitive based i ndu s tr ia l c ul tur e i n P ak i s ta n. He welcome d the iss uance of amnesty SRO fo r sales tax defa ult ers b y the Fede ral B oard o f Revenue, but this is not a complete solution to the problem, cit in g, it is ess ent ial that a com plete package including installment plans for pri ncip a l am o unt r epay m ent an d penalty sur cha rge wa ivers b e als o announced.
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Exclusive Article by M. Yousuf Shaikh - continued
Monthly AutoMark Magazine
The motorcycle engine market has great potential as a result of the booming motorcycle demand. Better performance motorcycle engines are needed due to the demand of shifting from standard two-wheel motorcycles to more sophisticated and technically advanced models. Motorcycle engines are in the process of upgrading to low emission, low vibration, low noise and low heat load engines with displacements over 125cc. Along with the sales of three-wheeled motorcycles (also known as tri-wheelers) in Pakistan, demands for their engines are also growing fast. The three-wheeled motorcycle manufacturers of Pakistan also do not have the ability to produce their required engines. to this project. If this h appens, it will be in the in ter ests of a ll to des ign the cle an e s t po s s ib l e e ng in e w it h in rea so nab l e cos t an d pe rf or m an ce cons tr aints w il l r eq uir e a “T eam Approach” and the p roject will require intensive in vest ment & h uge finan cial res ources. Th e s upport an d guid an ce provided by the Government wo uld be a great instrum ent f or the phen omenal gro wth of this sector. Motorc ycle and small engin e p rojects ar e f r eq u entl y ch ar ac ter iz e d b y ap plicat io n-s pecif ic req uir eme nts . Volumes of production in particular can vary widely from nic he ap plicat ion s, through to hand-held tool ap plications for which the qu ant ities pro duced can often vastly exceed those of mainstream au to mo tive prod ucts . D espit e these differences, motorcycle and small engine pr oje cts tend to s hare m an y of the stringent design targets of larger power un i ts s uc h a s o pt im i z e d f ue l co nsum ption , r egu lated em iss io ns, quality and, of course, lifetime cost. The exi st i ng cap ab i lity in m ot o r cycle production & marketing should further enha nce the co m mi s si on in g o f a mo to rcycle r esearch & deve lop m ent facility. Undersc oring the PCMIC’s commitment to the gro wing two- wh eeler sector – from luxury Chinese & Pakistani brands to the value-driven prod ucts popular in Asia – the PCMIC is please d to assist them to est abli sh the w hole pro je ct busin ess s co pe invo lvin g projects o f manufactu re, assembly and processing o f m o to r cy cl e b o dy pa r ts a nd manufactu ring of engines. PCMIC experts prepare expansion plan s for an E ngine Assem bly Plan t w ith a bui lt-i n Q ualit y As sur an ce Sys tem
co nsis ting o f the Lo nge st Conve yo r assisted Motorc ycle Assembly Facilities integrated with “Quality Gates” and Test Eq uipm ent to m eet eve r i ncreas in g market requirem ents. Als o, the exc lus ively negot iated an d fav ora bl e ag reem ents b etw een the Pak ist an go ve r nmen t an d Chin es e man ufac turers b y PCMIC are in place for localization of componen ts through establishment of in-ho use and vendors ’ fac ilit ie s. Deve lop ed par ts o f 70C C, 1 2 5 C C & 2 0 0 C C to e ns u r e t o man ufac ture the m ot orc ycle engines in cl udin g bac k ward in tegrat io n fo r Forgings & Castings and use special steel mat erials f ro m Pak ist an Steel Mi lls (PS M). Pr eparatio n of Te chnical an d Comm ercial
Feasibility for the production of core technology of motorcycle engines and frame components along with project supervision by PCMIC experts. These eff orts are supposed to facilitate nume rou s m otorc ycle com panies and pro tect tho usa nds o f jo bs in thi s au tom o tive se cto r an d to deve l op emerging technologies that becom e the driving industries of the fut ure. If the government works together with PCMIC for m anufac turing of these com m on par ts ; specially m ot orc ycle engines, base d on prod uctio n f igures the to tal OE M m ark et for these par ts can b e determined. In addition the replacement market demand can also be e stimated at various price options. For those parts where critical volumes are available, the
Govern ment & PC MIC should try and foster “embedded” linkage s between the Go ve rn me nt, the Serv ic es C lu s ter Group , Assemblers, Vendors, Importers an d b an ks as a co nsor tiu m that are wi ll in g to m ak e the in v es tm ent. To d o that, Pakistan’ s C hinese vehicle ma nufac turer s need a n eve r m o re strategic, collaborative relationship with the Government and to be workin g with the supply chain and other stakeholders to ach ieve lo ng term goals. I wan t the Council to help make that happ en. The Motorcycle Industry Council will be an op port unit y fo r the in dust ry & the Gove rnment to wo rk to ge ther on the long t erm strategic develop ment of the sector.
About writer-: Muhamm ad Yousuf Shaikh, the Founder & Ch ai r m an o f P a k is ta n Ch in a Motorcycle Industry Council, off ers his an alys is o f the m o to rc ycl e tr ad e & industry trends from Pakistan & China. Th e chairm an PCMIC wo rking w ith mot orc ycle trade & in dust ry fo r over two decades, Yousuf believe that Chinese investment could help Pakistan to design and produce its own automobiles mainly mot orcycles engin es as the Chinese & Indian motorcycle manufactures design & p ro du ce th ei r o w n pr o ducts . Motorcycle Industry Requ ire in tensive invest ment & huge financ ial resources, PC MIC prop osed plan to setting up an inventive research & development and pr o du cti o n f a ci li ty to pr o du ce motorcycles and small engines at Sunder Industrial Es tate Lahore. The result of this developm ent could have profound im pli ca ti o ns o n th e P ak i s ta n’ s mo tor cyc le in dus tr y o ve r the next de ca de . T o r e ac h h i m , em a i l : pakch ina.m ic@gmail.com
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Official Supporting Magazine for Pakistan Auto Parts Show 2013 Karachi - Pakistan
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Exclusive Article By Asif Masood
Monthly AutoMark Magazine
Importance of Natural Gas in Economic Development of Pakistan The Government of Pakistan, recognizing the magnitude of the crisis and its effect on the people and the economy, has undertaken emergency measures to address, manage and reduce the impact of the crisis. The reasons for present crisis in gas sector have both technical & governance aspects. These issues have emerged due to missing link with common citizen. Due to upcom ing of winter season the gas shortages have also in creased, and there is rationing of piped gas. Reliance on imp orted fuels has increase d and is in cr eas in g the co st of e le ctri cit y generation and adding to the co untry's balan ce of pay ments prob le ms . Th e growing energy short ages have m ade life diff icu lt fo r Pakistanis acros s the board. The quality of life of citizens has det erio rated . Ec onom ic gro wth rates have b een st unte d, an d industry and ag r i cul tur e h av e s u f f er ed . T he Gove rnment of Pak is tan , recogn izing the magnitude of the crisis and its effect on the people an d the econom y, has und ert aken emer ge ncy m ea sures to address, manage and reduce the imp act of the c risis. Th e reasons f or present crisis in gas sector have bot h technical & governance aspects. These issues have em erged due to m is sin g li nk with com mon citizen. T h e hy d r o c a r b o n s s e ct o r i s representative of this planned app roach to economic development and its pitfalls. Although the prim ary focus has been on oil, both oil and gas have been subject to sim ilar t ype of policies. Historically, oil was the prim ary fo cus of po licy. However, gas began attracting increased attention after the discovery of Sui fields, from wh ich prod uction began in early 1960.
Issues & Challenges Th e gl o b e ab o un ds wi th di sm a l exam ples of how o il an d gas reve nue s have disru pted peace, stability and t he gov ernan ce in fr ast ru ctur e in m an y countri es. Th e dis cov ery o f o il in com m er cial q uan tit i es places the country at risk o f the ‘res our ce curse ’ sy ndro me a nd co uld threa ten the
consolidatio n of the democ ratic gains. It’s a dire need to engage/support local natural resourc e ‘watch dog’ groups in on go in g le g is lati ve /po li cy re fo rm initiatives to ensure the development of ap prop r iate, ac ceptab le , equit ab le , progressive and transparent frame work for the merging o il and gas sector of the eco nom y an d wor k to fa cilit at e the involvement of host communities in the fu ll s tr etch o f na tu ra l r es o urc e s exp lo ratio n an d tra ck ap pro priat e tra ns pa re ncy a nd a cco unta b il it y mechan isms within the m ach in ery o f government and public adm inistration to ensure adequate allocations for their peculiar developm ent and protection of their envir onment. Th e fundam ental aim is to suppo rt ac tive co mm unity participation (grassroots / local voic es) in lo cal gov ernment decisio n m akin g and for the effective im plementation of loc al deve lop m ent plans . Th e o nly purpo se is to build on its support f or ongoing ad voc acy for t he prom ulgation of a righ t to in for mat ion le gislation wh ic h is an es sential par t o f a we ll fun cti o nin g dem o cr ac y a nd g o od governan ce. Po li cy pr o ce s s e s es ta b l i s h t he par am eter s f or the f unctio n an d perform anc e of the sector an d are t he key to the governance of the sector. The quality of po lic y pro cess es will affect
r e g u l a t o r y processes as well as soci al a nd envi ro nm ent al a s pe ct s o f t he natu ral gas s ect or performance.
Political Asif Masood Economy and the Development of the Hydrocarbons Sector Until 1 999, the go ve rnm ent tightly controlled the oil and gas industries o f Pakistan . No dec ision co uld be m ade without referring to the higher instances, and wh en dec isions w ere m ade, they were often based on political as op posed to econom ic considerations. Since early 2000, an ambitious, pro-market, reform pr ogram is b ein g im ple mented , an d gradually, the straightjacket under wh ich the industry used to operate is bein g dismantled. Substantial progress has been made in the restruc turing and reform of the oil and gas sectors, deregulation of prices, and privatiz ation of sele cted assets. The ref orms have e nhanced transparency, makin g dec ision makers aware of the va ri ous as pects of the b us in e ss .
Supply and Demand Of fic ial for ecas ts of gas supply an d demand have been carried out mainly for the short term period much of this forecasting has b een carried out in five year plans. Put simply, the conventional process of central planning begins with a quantity based, for example, o n likely domestic prod uction . This quant ity is then allocated am ongst diffe rent users and then ‘priced’ by planners. In the event of a sh ort age , the pric e of gas is to be revised, but the quantit y may be
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Exclusive Article By Asif Masood - continued
Monthly AutoMark Magazine
Government should provide commercial guarantees only in exceptional circumstances and if so, in a transparent manner. An inventory of the contingent liabilities to date should be developed together with an assessment of the corresponding financial commitments. Wherever possible, attempts should be made to dispose of these liabilities through negotiations in creas ed in other ways by exploration & pr oductio n. Plan ned fore cast s are therefore bas ed on k ey ass umption s ab out availability in th e official supply f ore cast ; it is assum ed that f ore cast s upply w ill b e utiliz ed. Similarly, in off icial demand forecasts, it is assumed that prices will be set at levels that allow gas to com pet e w ith alternative fuels an d that the in frast ru cture netw orks n eces sa ry fo r deli ve r y w il l ex is t. W ith reserves on the ord er of 27 TCF, nat ur al gas consum ption is grow in g rapidly. The intensification of the use of natural gas will co ntribute to economic growth, increase access for the poor and rich will help subst itute dom estic gas f o r i m po r ted fu el o il i n po w er ge neratio n, while keeping p ower tariffs l ow er an d mo re s ta bl e. P res entl y, indigenous natural gas accounts for only 40 percent of mo dern energy use, so that sign ifican t quant ities of cru de oil an d petroleum produ cts are imp orted at a cost of ab out US$12 billion per year. Fort unately, an amb itious inve stm ent program in the gas sector over the past f ew years should le ad to a significan t (app roxim ately a 30% ) increase in gas availab ility s ince 2006/07. If Pak is tan could harness the full potential of its gas res ources , fuel oil imp or ts wou ld b e reduced by 5 m illio n t ons per an num for an annual savin gs of about US$900 m illion. Unfortunately, the full potential of Pakist an's gas resources has not been realize d in the past due to in adequate s ector po licie s f or ex am ple g ivin g in suffic ient priority to exp andin g the gas m arket, allocating of reserves to lowvalue uses, uneco nomic tariff p olicies, promot ing a public sector app roach to commercial and competitive operations a nd exc lu di ng the pri vate s ector .
Summary of Analysis • Natural Gas is produced by the pub lic s ecto r i n Pa k is tan . O i l an d G as Regulatory Authority (OGRA) has been m a nda te d to fo s ter co m petit i o n, i ncr eas e pr iv at e in ve s tm en t a nd o w ners hi p in the mi ds tr eam a nd downstream petroleum industry, protect
the pub lic in terest w hi le res pec tin g in dividual right s an d pro vid e ef fective an d efficient regu lations. Under Section 2 1 o f O GR A O rd in an ce the Feder al G overnm ent is only entitled to give “ Pol ic y G ui delines ” to O GR A. T he regulator needs to take all stakeholders on board and is mandated to ensu re the willingness and ability of the consumers to pay b efore an nouncing the price. • In the case of the fertilize r sector, the gas subsidy has benefited the indust ry m uch more than farmers, given that the dom estic pric e of f ertilize rs has eve n been abov e world market prices at tim es. Th e powe r an d industrial consumers essentially bear the costs, as well as the State (through foregone fiscal incom e). I ncreas in g the pr ic e of gas to it s o p po rt uni ty co s t w o ul d h av e a consid erable im pact on the fertiliz er in dustry. • Natural Gas is extensively used in the Energy, Agriculture and Transportation sectors in addition to its wide use in the households . Howe ver there is a wide varianc e in the Pric e of Natu ral Gas in all these sectors. Som e sec tors are sold gas at highly subsidized rates while the s am e gas is so ld to ot her at hi gh ly d ete rm in ed ra te s . F o r e xa m pl e acc ordin g to the feed stoc k tariff of the f ertiliz er secto r is Rs. 60.67/ mm btu wh ereas the CN G is sold at a rate of Rs. 61 8/m m b tu to the C N G s tat io ns .
Production & Distribution Network of Natural Gas Th e federal cabin et in his recently held m eetin g has given fre e hand to SNGPL an d SSGC L to impro ve their re turn on assets which have dropp ed from 17.5%
to belo w 3% due to strict benchmark of l os se s b y Oi l an d Gas Regu l at or y Authority (OGR A). Bo th SN GPL an d SSG C L ar e purc ha s in g ga s f ro m E xp lo ratio n & Pro ductio n (E & P) co m pan i es a nd sel ling to v ari ous categories of consumers. The companies are operatin g on cos t plu s return o n assets form ula under license from OGRA wh ich is em powered to determ ine the revenue requirement s of the companies under OGRA O rd inan ce, 200 2. Th is in cludes we llhead gas price (cost of gas pa id to g as pr oducer s/s uppli ers ), tr an s m i ss io n & dis tri b utio n cos t (operating expenses), and profit margin (presently 1 7- 17.5% return on as sets b efo re f in an cial char ge s an d taxes). O ffic ial doc uments reve al that o ut of total pro ductio n of 4,000 m mcfd, the compan ies are supplying abou t 2,9 00 m m cf d t hr o ugh th ei r ex ten s iv e transmission and distribution network of some 140,000 kilometers and serving 6.3 million consumers in their respective franchise areas. Du ring its transmission a certain p ercen tage of gas was bound to be lost during the operations referred to as un-accounted For Gas (UFG). This is becau se of s everal fact ors, so me of w hic h are beyond the co ntro l of gas c o m pa ni e s . O G RA h a s f i x ed a b enchmark for the compan ies according to w hic h cos t o f U FG beyond a fixed percentage is born e by the c ompanie s, ad vers ely affecting t heir profitab ility. Th e erosion of this p rofit is so high that sin ce the introd uction of benchmark b y O GRA the 17-17.5 % return on assets allowed to these companies has dropped to less than 3 %.
Production & Distribution Challenges The companies are m aking all out efforts fo r UFG reduction, b ut their efforts towards; • D etec tion o f pi lfe r age f rom no nconsumers • Gas pilferage in law and order affected areas • Lim it at io n o f in her ent is sues in do mes tic gas m eter s have not b een
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Exclusive Article By Asif Masood - continued recognize d with the res ult that the companies may not b e able to carry out m ajor future developm ents or eff ective ly maintain pres en t sy st e m. Kee pin g in vie w fi na ncia l con dit i on s o f b o th ga s co m pa ni es , P etr o l eum M in is tr y recomm ended to the Fe deral Cabin et to issue a directive to OGR A under Section21 of the O GR A O rdin an ce to enable them to allow following items as deemed gas sale volum e fo r the purpose of UFG calculations: • Volume pilfered by non consumers but detected an d d eter m in ed b y the com panie s in acco rdan ce with OG RA procedure • V o lum e ag ainst m in im um bi llin g am ount charged to domestic consumers • Vo lume co nsumed in law an d or der af fected areas Es tim ated fin a nci al i mpac t o f thi s pro po sal fo r FY 2 011-12 wo uld b e as follows : • Volu me of gas pilferage detec ted for non consumers for SNGPL will be 11172 MM C F an d SSG C L 2 0 59 M MC F • V o lum e ag ainst m in im um bi llin g SN GPL 7 ,541 MMC F, SSGC L 3,987 MMCF • Vo lume co nsumed in law an d or der areas, SNGPL-3,377 MM CF & SSGCL1,286 MMCF. Total volume fo r SNGPL will be 22,086 MMCF and SSGCL-7,332 MMCF. Average cost of purchase rupees per million cubic feet will be Rs 288 .19 for SN GPL an d Rs 289.87 fo r S SGCL . Value o f abov e gas volu me will be Rs 6.366 million for SN GPL and Rs 2.215 million for S SGCL The Regulatory Framework Until 2000, the government, thro ugh the D irector Ge neral Gas (DGG) , was regu lating the sec tor. In 2000, the Gas Regulatory Authority was created, and in 2002, the mandate to regulate the oil sector w as ad ded to its pr ero gatives, renam ing it the Oil and Gas R egulatory Authority (OGRA). Subsequently, OGRA was mad e res ponsib le fo r the saf ety
Monthly AutoMark Magazine
standards and enforcement of prod ucts specifications, and more recently, it was made responsible for the enf orcement of com petition an d an titr ust. Th ese function s are no t usually within the sc o pe o f secto r regu la to ry b odi es.
UFG in Pakistan means loss of $2 billion a year at the im port price of furnace oil. It s ay s that large s cale o perat ion s o f SN GP L a nd SSG C L ha ve le d to inefficiency and lo ss of competition in ga s d is tri b uti o n an d m ar ke tin g.
Non-Customer gas theft in unaccounted for Gas (UFG)
Gas Pilferage by NonConsumers
Powe r theft is a norm al routine and unchecked by concerned authorities. "It doesn't make sense that consu mers s hould pay fo r covering up thef t losse s of CNG particularly in the absence of an y developm ent or welfare schem es." Gas line losses were reduced gradually aft er financial year 2002. Th is revealed that in order to recover the losses, OGRA increas ed tariff charges for SNGPL and SSGPL, which badly affected consumers.
The trend of the gas pilferage by nonconsum ers was increasing with every passing day because of the restrictions on new gas connections, rapidly growing distribution network due to GoP's socio pol it ic al a ge nda a nd exis tin g gap b e tw e e n de m a n d a n d s u pp ly . Co mpa nie s are m ak in g s ub st an tial efforts to control the m enace w hich is refle cted thro ugh their surveillance, detection and disconnection efforts. So far the com panies have identified and dis co nnected hundr eds o f il le g al networks supplying gas to thousands of non c onsumers through direct tappin g of mainlines, exte nsion through rubber pip es an d ot her no n co nve ntio nal m ethods . T here ar e a num b er o f ob stac le s in the le gal pro cess b efore recovery can b e e nsured from the gas pilferers. As far as crimin al proceedings are con cerned, the c om panies have so far lodged 395 FIRs/applications across their franchise areas o n account of gas pilf erage , s ince the prom ulgatio n o f am endments in PPC in Decemb er 2011. The vo lum etric imp act of these nonconsumer cases during fiscal ye ar 201112 is 11,172 MM CF and 2,059 MMCF for SN G PL a nd SSG C r e s pect iv el y.
During 2009, chairman OGRA has issued as many as 460 marketing licenses to set up CNG stations in the country during his tenure, which led to an acute gas shortfall and an alarming rise in incidents of gas theft. Presently, line losses are 8-10 per cent as compared to one or two per cent worldwide. To recover previous losses, the present regime has been increasing tariff. SSGC has moved a summary stated that, the non-customer gas theft should be allowed in the UFG calculation as the same had already been allowed to Sui Northern Gas Pipelines (SNGPL), which was approved. The SSGC has also been allowed average billing, synchronized with nearby areas, for the localities where the meter readers could not enter due to law and ord er situation. The volum e of gas theft by the SSGC customers was taken into the UFG calculation but the volumes theft by noncustom ers by t ampering pip elines was excluded. “We have been allowed to add non-cust omer theft in UFG; howe ver, this wou ld definitely have direct impact on pricing for customers. The expansion in sub-urb an areas, the n on-cu st omer gas theft had increase d s ignif icantly, ad ve rse ly i mpac tin g the com pan y’ s prof itability. “Balance sheet is already under pres sure due t o non-ava ilability of gas so the distrib ution company may also be give n the benefit against gas thef t”. T he wo r ki ng o f P la nni ng Comm is sio n unfolds that 10 percent o f
Proposed Solution Histo rically , s tudies we re conducted w i t h r e f e r e n ce t o m i n i m um co ns um pti on w hi ch a do m e s tic consumer would require for its coo king requirement. The st udies revealed that a s ingle burner w ith the consumption
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Exclusive Article By Asif Masood - continued
The trend of the gas pilferage by non-consumers was increasing with every passing day because of the restrictions on new gas connections, rapidly growing distribution network due to GoP's socio political agenda and existing gap between demand and supply. rate of 12 cft per hour if used for f our ho urs a day w ould req uire 40 cubic m eters of gas per m onth. That is wh y co ncer ned au th or it i es hav e b e en notifying m inimu m charges eq uivale nt to 40 cubic m ete rs consum ption per m onth in case o f domestic consumers. The compan ies are supplying gas to more than 6 .3 million consume rs.
Detailed analysis show that in case of SNGPL around 35-40% consumers are billed on minimum basis in summer and around 25-30% in winter months. In case of SSGC around 31% consumers are billed in summer on minimum basis and around 21% in winter months. Unprecedented load management in recent years has taken its toll on the measurement capabilities of gas meters. It ca n s afe ly b e conclu ded that an y v olu m e o ve r an d ab ove the ac tua l m etere d vo lume up to 40 cubic m eters per month fo r whic h the co nsumer is b ound to pay is a ''deem ed sale volume''. Th e governm ent has d irected OGRA to a ll o w tha t vo l um e o f m i ni m um consumption upto 4 0 cubic m eters per m onth fo r domestic co nsumers as an adjustment in sales volumes. This would not have any bearing on the consumers'' m onthly gas b ills as they ar e alread y payin g fo r the minimu m consumption volu me of 40 cubic meters per month.
Sectoral Gas Consumption T he sector wis e gas consum ption in m illion cubic feet per day (MMC FD) along with percentage during 201 0-11 is appended b elow; U nit: MMCFD
New Connections W ith the in tention to benefit maxim um hous eholds, gas utility companie s have set their objective to enhance consume r b ase. The company-wise and categoryw ise new gas co nnection s pr ovid ed during Fiscal Year (FY) 2009-10, 20101 1 and its acc umulative st atu s as o n 3 0.06.2011 is given b elow.
Recommendations Fo llowing are few r ecom mendations des erve s erio us at tentio n in po licy reforms: • E ner gy s ub sid ie s (eco nom ic an d b udgetary) are significant . Sub sid ies s hould , in the sho rt term, b e funded throu gh the national b udge t (so that they are tr ans pare nt), and gr adu ally phased out. The affected parties should b e not ifie d well in ad van ce so t hat they h av e a de q ua te ti m e to pr ep ar e themselves fo r the new environ m ent • G o v er n m e nt s ho ul d p r o v id e c o m m er ci al g ua r an tee s o n ly i n exceptional circu mst ances and if so, in a transparen t manner. A n in ventory of the contingent liabilities to date should b e d ev el op ed to g ethe r w it h a n a s ses s m ent o f the co r res po ndin g f in a ncial co m mi tmen ts . W hereve r poss ible, attempts should b e m ade to dis pos e of thes e liab ilit ie s thro ugh nego tiatio ns • OGDCL, PPL , and Gas T& D entit ies s hould b e pr ivat iz ed aft er suit ab le r epac kagi ng/ unbundli ng, targ eti ng do m est ic an d f ore ig n m ediu m siz e in stitutional investor consortiums (with s tr on g o pera to rs ), an d a ft e r the co m pl eti on of pr ic e/tar if f ref or ms curre ntly underway • Refo rm in g the oil a nd g as s ecto r constit utes a signif ican t challenge , as m an y d ecisions have b een m ade over
New Connections by SSGCL
the years on the basis of considerations that were not purely economic. They did no t nece s sari ly refle ct the nat io nal in terest so that ill advised investm ents we re made, powerful lobbies developed an d more generally, th e sec tor b ecame a bu rden to the government, as even the s mallest decision had to be mad e in a centralize d manner. This, however, did not prevent the oil and gas industry from deve lo ping rapid ly , but oft en for the b e nef it of pro vi der s r at her tha n c o ns um er s . Mo r e o ve r, v a lu a b l e gov ernment resources were used in the sector that could have otherwise attained h ig her s o ci al re turn s el se w her e • The u ltimate purpose of the reforms w ill be to ensure that the benefits of competition and efficiency gains which s hould be pas sed o n t o co nsumers in terms of pric e, quality of service, safet y an d supply reliability. The new po lic y environment will also foster financially v iab l e an d econ om ic a lly ef fi ci ent s y s tem s f o r the tr an s po rt a ti on , proc essing, storage , and m arketing of natu ral gas.
In the petroleum downstream sector, the long-term objective is that a competitive structure evolves, refineries compete among themselves and with product importers under a deregulated price regime, the terminals and main depots operate as regulated common carriers and the government effectively enforces compliance with standards and regulations by all firms to ensure a level playing field and acts upon anti competitive behavior.
New Connections by SNGPL
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Car / Light Vehicle Price List
SUZUKI
HONDA
Model Model M EHRA N VX 80 0c c Eu ro II M EHRA N VXR 8 00 cc Eu ro I I SUZUKI SWIFT 1.3L DX SUZ UKI SWIFT 1.3L DLX SUZ UKI SWIFT 1.3L Automatic CU LTUS E fi VXRI E uro I I LIAN A 1.3 L RX I MT P ETRO L LIAN A 1.3 L RX I MT (CN G) BOLAN VAN VX Pe trol Eu ro II S UZ UKI VAN CARGO Eu ro II AP V 1.5 L GLX M T (Pet rol) AP V 1.5 L GLX M T (CNG ) JIM NY JL S X M T JIM NY JL D X M T)
Price Price R s. 5 75,0 00 R s. 6 32,0 00 Rs . 1,1 51,0 00 Rs . 1,2 31 ,00 0 R s. 1 ,36 6,00 0 Rs . 98 5,0 00 Rs . 1,3 82 ,00 0 Rs . 1,4 61 ,00 0 Rs . 65 4,0 00 Rs . 63 0,0 00 Rs . 2,0 99 ,00 0 Rs . 2,1 74 ,00 0 Rs . 1,0 74 ,00 0 Rs . 2,2 23 ,00 0
Karakoram Motors Model Chery S tan dard P etrol Chery S tan dard CNG Chery Delu xe Petrol Chery Delu xe CNG Go now Victor Go now Troy St an dard Go now Troy Delu xe Gilgit (Doub le Ca bin) Pet . Gilgit (Doub le Ca bin) CNG Kaghan X L Pe trol Kaghan X L CNG
Price R s. 7,20 ,000 R s. 7,70,000 R s. 7,70,000 R s. 8,2 0,0 00 R s. 1,4 99 ,000 R s. 9,9 9,0 00 R s. 1,0 49 ,000 R s. 3,8 5,0 00 R s. 4,2 0,0 00 R s. 1,2 85 ,000 R s. 1,3 75 ,000
MASTER MOTORS DAIHATSU Model Model
Price
Price
Model Honda CRV Automatic 2400cc Japan Honda Accord Automatic 2400cc Japan Honda City Manual 1300cc Honda City Prosmatec 1300cc HYUNDAI Honda Civic VTI Manual 1800cc Honda Civic VTI Manual SR (Oriel) Honda Civic VTI Prosmatec 1800cc Honda Civic VTI Prosmatec SR (Oriel)
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Price 7,517,000 7,017,000 1,507,000 1,648,000 1,982,000 2,212,000 2,102,000 2,332,000
TOYOTA COROLLA Model Model XLI VVT-i 1.3 M /T 129 9c c Pet rol G LI VVT-i 1.3 M /T 1 29 9c c P etr ol G LI VVT-i 1.6 A/T 15 99c c Pet rol XLI VVT-i 12 99 cc E COTEC G LI VVT-i 12 99 cc E COTE C 2 .OD STD 20 00 cc 2 .OD SALOON M T 2 .OD SALOON SU N RO OF ALTI S 1.6 L Du al VVT-i M T ALTI S 1.6 L Du al VVT-i M T SU NR OOF ALTI S 1.6 L Du al VVT-i AT Cruiset ronic ALTI S 1.6 L Du al VVT-i AT S U NRO O F Toyota Ava nz a ( St and ar d)
Rs . Rs . Rs . Rs . Rs . Rs . Rs . Rs . Rs . Rs . Rs . Rs . Rs .
Toyota Ava nz a ( Up Sp ec fic at ion )
Rs. 2 ,16 0,0 00
Price Price 1,5 37,5 00 1,6 72 ,50 0 1,8 27,5 00 1,6 02 ,50 0 1,73 2,5 00 1,6 07,5 00 1,8 09 ,00 0 1,9 14 ,00 0 1,9 02 ,50 0 1,9 97,5 00 1,9 97,5 00 2,0 87,5 00 1,9 60 ,00 0
Hilux Pickup 4x sc Model
Price
Brand New Toyota Hilux Pickup, 4x2, Single Cabin, (Local Assembled)
Rs. 1 ,76 3,50 0
Hilux Pickup 4x4 D/C Model Toyota HILUX 2494cc, Dies el Turbo Charger Common Rail Engine, 4x4 Double Cabin - Standard Model
Price Rs . 2,8 78 ,50 0
M aster High land M -260 Rs. 1,188 ,000 TOYOTA VIGO M aster Forland M-3 30 SUP Rs. 1,235 ,000 M aster Grand M-4 10 SU P Rs. 1,720,00 0 Model Price Price Model Price Model Master Grande Bus Chassis YL41B Rs. 1,625,000 Vigo Champ M/T Rs. 3,178,500 DEFENDER Fu so can ter (Japan) Bus Chass is Rs. 2,950 ,000 (WHITE ,BLACK,STRONG BLUE & SILVER ) STATION WAGON 90 Rs. 3,560,000 Fu so can ter (Japan) Rs. 3,025 ,000 Vigo Champ A/T Rs. 3,378,500 STATION W AGON 110 Rs. 4,260,000 Fu so Pr ime Mover (Japan) Rs. 9,450 ,000 (N/A) Unit Price without Deck (WHITE ,BLACK,STRONG BLUE & SILVER )
DAIHATSU
LAND ROVER
Price updated Jan- 2013
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Article by Abdullah from Pak Suzuki
Monthly AutoMark Magazine
Pak Suzuki Motor Company expanding its Motorcycle operations This initiative by Pak Suzuki Motor Company is not only going to help into the expansion of its Motorcycle business but will also help the customers with new solutions and will improve the existing practices in the industry by introducing State of the art infrastructure, latest tools & techniques and a well trained human resource. Th e la st decad e has w it nes s ed a quan tum leap in Mot orcycle Industry of Pakis tan . Wit h the gr owt h rate o f around 1 6% f rom pas t few years and in dust ry s ize of 1 .8 M illio n U nit s, Motorcycle sector is certainly a growing one in the country with GDP growth rate of 3.7% and a population of 118 Million. D e s pi te the f a ct th a t C hi n es e Mot or cyc le s has certa in ly creat ed a m as siv e im pac t in the Mo torc ycle industry of Pakist an yet their Japanese co unt erparts are not lead in g b ehind. J ust r ecen tly P ak Suz uk i Mo to r Com pany, Mark et leader in the Mo tor Car s egment of au tom obile indust ry is expanding its operations in the booming Motorcycle sector by carrying out active Market pen etration act ivities; o ne of such is expansion of dealership network. Th e s m art m ove b y Suzuk i is the in trod uction of its gigantic exis ting Mo to r Car dea le rsh ip networ k in to Motorcycle busin ess where a number of existing Motor Car dealers have opened up their dealerships country wide along w it h r epor ts of o peni ng of m o re deale rs hip outle ts in near future. Th is in iti ative by Pak Suzuki Mot or Com pany is not only going to help into the expansion of its Motorcycle business but w ill also help the c ustom ers with new so lut ion s and will im prove the
exist in g practic es in the in dustry by i n tr o d uc i n g Sta t e o f th e a r t infrastructure, latest tools & techniques and a well trained human resource. The new deale rsh ip s are design ed on the Suzuki st andards and can be compared w it h a ny in ter nat i o nal st a nda rd Mo to rc ycl e de ale rs hip . Suz uk i i s certain ly taking a positive initiative, not only for customers, but for industry and is certainly s ettin g a b enc hmark f or others
Alon g with the in tro ductio n o f New deale rsh ip s, Suzuki has als o recen tly in trod uced its new 11 0CC Mot orcycle with the nam e of Suzuki Raider and there are reports of introduction of few new m odel s i n near futur e. Such aggres sive in itiat ives by Pak Suzuki Mo tor C om pan y depic ts a vib ra nt Marketing pen etration strategy and is certainly going to m ark few good results for S uzuki in days to come.
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Monthly AutoMark Magazine
4th International Foundry Congress & Exhibition (IFCE 2012 ) - Lahore
IFCE Inaugural Committee with the Chief Guest, Mr. RazzakDawood, Chairman DESCON Group and Ex Minister for Industries & Commerce.
Mr. Im tiaz Rastgar CBI local expert for engin eering sect or in Pakistan described im portan t ingred ients for su ccess and growth in wo rld market. He gave detail presentation on “K ey to Success in Me tal Casting Business”.
CBI experts for engin eering sector Mr. Staaf Henderieckx highlighted the imp ortant of “Process Control in Foundries” wh ile sp eakin g on the 4th Intern ational Foundry C ongre ss & Exh ib ition (IFCE)
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Monthly AutoMark Magazine
Exclusive Article by Sania Zaib Abbasi
Trends in Pakistan road freight industry 1985-2012 (An Overview Part II)
The past five years have been an eventful ride for the Global Heavy Duty Truck Manufacturing Industry. IBIS World estimated that industry revenue grow by just 0.9% annually during the five years through 2012. While Western economies were struggling to keep their economies afloat.
This overview is based on study of the oversea unit of the transport and Road Research Laboratory and the National Transport Research centre, Islamabad. The basic purpose of this overview is to highlight key considered aspects of the industry to analyze and enhance industry growth; as road freight is the three quarter of inland freight in Pakistan.
VEH ICLE VALUE & AGE STRUCTURE Data collected by the Roadside Interview Survey suggested t hat the me an age of Pakistan ’s fre ight ve hicle f leet was 9 years at the time of the su rve y, This is higher than might be normally expected but it can be explained by the decline in freight vehicle sales that oc curred during the 19 70s and early 1980.By comparing the age spectru m o f Bedfo rd tru ck s know n to have been assem ble d each year, it is possib le to make an estimate of ve hic le survival rates. The B edford assemble d in 1984, nine per c ent were seen in the Roadsid e In terview Survey,
but this dim inis hed to o nly three per cen t for those assembled in 1973, The change in this percentage from year to year was not uniform p art ly because of sales to the military and the NLC (whose ve hic le s we re no t re co rd ed in the Survey). A life exp ectancy of 15years could well be a better estim ate; Hundai (1985b) fou nd a mean expect ed life of 9 years in a st udy of the survival, ates of 81 tr ucks fir st regist ered in 1 961. Hundai’s survey related to a wide variety of tr uck s an d in view o f the later stan dard ization on the Be dford model
MA J O R HEA V Y V EHI CL E MANUFACTURES IN PAKISTAN
Vehicle Makes bedford hino isuzu nissan other
a n d t h e consequent i m p r o v e d a va il ab il it y o f cheap spare parts it is reasonable to b el ie ve that the exp ected lif e of the lat er Bedford Sa nia Zaib Abb asi tr ucks wou ld b e higher. The mean age o f B edford tru cks f ound in the Survey was ten years, Howe ve r sin ce 1982 Bedford registrations have declined while Japanese truck registrations have in crease d, Over three quarters of the Hines were less than two years old and the mean ages of the Nissans and Isuz us were between three an d four years, The old est tru cks in use we re fou nd to be the Afghan-run Me rcedes with a mean age of i 5 years. Mo st o f these tru cks w er e b ro ug ht s eco nd ha nd I nto Afghanistan; the data collected from the R o a d s i d e I n t e r v i e w Su r v e y demo nst rated a s tro ng relation s hip betw een the d river’ s estimate c urre nt valu e an d vehic le age.
VE HIC LE OPE RA TING COST ELEMENTS The data from roadside interview relates only to vehicles traveling on paved roads in flat terrain (i.e data relating to vehicles trave lin g in the mounta inous north or on rou gh r oads In the Mekr an are omitted),Loading Labour Rs/km.Diaries Vehicle information on vehicle operating cos ts and revenues was collected fro m three different surveys, There were some degree of variation in the results fro m the diff erent dat a s our ces is to be expected, Differences in vehicle age help to explain so me of the diffe rences in m a i n te n a nc e a n d t yr e C O S I S ,O c tr o i .T h ei r is a f ai r l y c lo s e co rresponden ce b etween the diff eren t surveys In crew cost s, loading Iab our,
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Monthly AutoMark Magazine
Exclusive Article - continued
Pakistan road freight industry sets the best example of entrepreneurship with least government interactions. Heavy duty vehicles of Pakistan are a part of tradition due to its colorful decoration and art work. Apart from it, they are playing major role in the economic development of Pakistan. It’s a cultural heritage. gratuities paid to the police and oil and greas e co st s, Ex penditu r e o n tires recorded by the Drivers’ Diaries appears to below In relation to the apparent tire replaceme nt rate. Howe ver a variety of repairs is m ade to extend tire life and much use is mad e of r emold ed tires. Large differences were record ed in the payments mad e for the local t ax levied on loa ding an d unloa ding fre ight and for agents’ commission, for t hese items diff eren t op erators will face dif ferent costs ac cording to the journey and type of loa d carried. It is poss ib le that the surveys capt ured dif ferent pat terns of vehicle operation.
KE Y P OINT S OF THE RESEARCH • Commercial Freight transpo rt in Pakistan Is organize d on a free market basis. Freight tariffs are determined by supply an d dem an d. Entry In to the industry is cheap and easy, and apart fro m the op eration o f the Na tio nal Logi st ic s C ell, there i s li ttle dir ect government intervention. • T he p r ed om ina n t f o r m o f o w n e r s h i p i s b y i n di v i d u a l entrepreneurs wh o provid e a “hire and rew ar d” s ervic e. There is a very high turno ver in ve hicle own er-s hip. Over half of the Be dfo r d tr uck s w or e purchased by their current owner during the previous two years. • “Own account” op erat ions tend to be co nfin ed to urb an collectio n an d deliv ery w or k ; the y a re vir tual ly none xist ent in long dist anc e trans port operation s. Th e prob lem s as soc iated with man aging st aff and vehicles were id e nti f i ed b y in dus t ri al f r e ig ht consign ors as the main re as ons against developing the use of their own vehicles. The “lore hire ” sector is readily able to provide transport cheaply and quickly an d there is ve ry little dem an d fo r
p u rp o s e b u i l t sp e c ia l l i z e d vehiclesx) Vehicle iinanc e is provided thro ugh an i nfor m alsys tem o f hi re purchase arrangements between owners and mid dle men, man y of wh om are freight agents. Ban k fin ance is very rare, A w ide range 01 effect ive interest rates is paid for truc k purchase through these agreements. The m odal rate of interest charge d is ab out 20 percent. On the whole, owners of the large r an d newer tru cks fi nd i t eas ie s t to meet thei r financ ial commitm ents. • Trip lengths In Pakistan are long; the ave rage loaded t rip length for B edford tru cks was 5 00 km s. Furt her lar ge r capacity Japanese trucks It ranged from 650 t o ove r 1000 km s. Empty running accounted for abo ut 16per cent of total ve hic le ki lo me te rs , Annual trav el appears to be in excess of 100,000 kms for those tru ck s regu larly e ngaged on long haul transport. • Overall journey speeds (including rest slops) are lo w at ab out 2 3 kp h. Th e typ ical patt ern of op eratio ns usually involves two d rivers and on e assistan t, They travel night and day going from job to job for up to two we eks at a time before returning to base, The principal driver is responsible fo r fin ding work, collectin g revenue, keeping ac counts and maintaining the vehicle . • Most Industrial freight consignors were fou nd to favo r ro ad transport in co mparis on with rai l in view of the former’s flexibility, spee d, convenience and greater acc ountab ility in the case of damage. • The widespread network of f reight age nts was fou nd to play a ke y role in the operations of the industry. Over 60 per cent o f loa ds are placed throu gh age nts, Over 90 per cent of age nts were fou nd to have ac cess to a wo rki ng telephone an d 90 per cent o f agents claimed that an ave rage they could find a ve hic le to consign a lo ad within one
hour. • The national im balan ce in fre ight flows was found to be reflected in fre ight tarif fs. On average, fre ight ra tes fo r goods tr ave llin g inland from Karach i were about 35por cent higher than rates for the reverse direct io n. • Fr eight tariff s per kilo meter we re fo un d to de clin e m ar k edl y w it h increasing jou rney distance. Trac to r traile rs and thre e-axle t rucks provided transport at tariff rates that were broadly com pet itive w ith Pakistan Rail-w ays : these rat es were rou ghly equivalent to ab out 65per cent of the tariffs charged by th e two . Axl e B edfo rd tr ucks .
WR ITE R’ S OVER VE IW Pakist an ro ad freight industry sets the best exam ple of entrepreneurship with least go vern m ent in teract ion s. He avy duty vehicles of Pakistan are a part of tradition due t o its colorf ul decoration and art w ork. Apart from it, they are playin g m ajo r role in the econom ic deve lop ment of Pakis tan. It’s a cultural he ritage. Ro ad fre i gh t i ndustry of Pakistan em phas ize g reatly on in ter rela ted eco nom i c el em ents o f the country so a better fleet can provide a better turn over to raise eco nomy with greater margin. The past five years have been an eventful ride for the Glo bal Heavy Duty Tru ck Manufac turing Indust ry. IB IS W orld estimated that industry reve nue grow by just 0. 9% an nually d uring the five year s thro ug h 2 012 . W hile W est ern economies were struggling to keep their eco nom ie s af loa t, C hin a an d ot her developing countries bucked trends by posting healthy increases in demand. In 2009, China was the only country in the world to increase its tru ck o utpu t. A n in-de pth re vie w of the Pakist an freight industry can lead China to explore b etter ways to s erve P akis tan heavy duty vehicle industry.
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Internationa Automotive Industry - Update
Tata Motors unveiled its first 5-axle rigid truck At the 2 012 D el hi Auto E xpo , Tata Moto rs unve iled it s f irst 5-axle rigid truck . Tata Motors has also displayed the Tata Indigo Manza diesel-electric hybrid car, Tat a Magic Iris CNG, Tata N ano CN G and Tata Starbu s Fuel Cell (hydrogen). With a maxim um payload of 25 to nes, the com mercial vehicle will get its power from a Cumm ins 6BT 5. 9L engin e (154 kW power at 2500 rpm) matted to a 9speed gearbo x. The Tata LPT 3723 co mes with 10R20 – 16 PR (Rim s 7.50X 20.00) tires and a minimum turning circle diameter of 21.9 meter making it easily m aneuverable as compared to tractor-traile rs. The Tata LPT 372 3 has a new-look cabin with styliz ed h eadlamp s, new bumper, air defle ctor s at the s ides an d ot her feat ures , w hich le nd i t a refr eshin g external appearance. The air-conditioned cabin, e rgonomic dashboard and stylish interior trims give drivers the com fort.
Chinese automobile imports fall 26% in November C hin a im po rt ed a to ta l of 79 ,800 vehicles in November. The figure, which comes from Ch ina Automobile Trading, i s 2 6 .1 per cen t lo w er tha n la s t November's import am ount. Passenger au to mob iles acco unted for 78 ,800 of those imp orts , also over 25 percent less than last November. Among them, total monthly imp orts o f sedans, SUV s an d m in ivan s to talle d 45 ,600 un it s, 5 6 ,5 0 0 an d 4,3 0 0 u ni ts r es pe ctiv el y. O nce a ga i n, SU V s acc ount ed for the m ajo rit y of im po rts over the m onth. Imp orts in each of the abov e three segme nts decrease d fro m la st N ove mber to this N o ve m b er. B MW r emained the m o st im po rt ed automobile brand, followe d by VW, Audi an d Lan d Rover . O ut o f the to p 15 imp ort ed automo bile b rands, To yota was the only Japanese o ne. CATC attributes the decline in imp orts in November to decreasing consumer demand. A total of 1.02 million autom obiles have b ee n im po r ted f ro m J an u ar y to No vem ber, representing year-on- year gr o wt h of 12 .4 per ce nt. 999, 650 pass enger aut omob iles we re impo rted over the 11 month period,.
Ashok Leyland Launches India’s Most Efficient 5-Axle Rigid Truck Ashok Leyland, the Hin duja Gro up flagsh ip, today commercially launch ed the 5-axle 3718il, offering a payloa d of up to 25 tonnes that is the high est in rigid trucks thereby making it one of the mo st efficient vehicles in its cat ego ry. Feat ur e-rich, the 3 71 8il, in a 1 0× 2 co nfi gu r at i on , pr o m is es s uper io r perf orm anc e, durab ilit y an d best -inclass operational efficiency. A remarkable fe ature of the 371 8il is its five axles – two st eera b le fro nt axles, two rear a xles a nd a sel f-st eerab le pusher lift axle at the m iddle that gives the vehic le better b alance and gre ater efficiency in carrying more loa ds. The lift axle au to mat ically lif ts wh en the ve hic le is ru nnin g in an unloa ded co ndi ti on w hic h tr an sl at e s in to additional fuel saving and enhanced tyre life. Th e 3718il is also equipped with a user-friendly in-line fuel injection pump f o r h ig h er m i l ea g e an d lo w e r mainten an ce co st, a 9-spee d gearb ox an d i s po we r ed b y a pr oven, fueleff ic ie nt 180 HP ‘ H’ s eries engine.
General Motors to recall 77,579 Buick GL8 minivans in China Shanghai GM, a joint venture between Ge neral Motors and SAIC, will is sue a r ecall o f a bo ut 77,5 79 B uic k GL 8 m inivans in China due to a prob lem in s eat belt. Th e GL 8s are recalled due to a problem in the f ron t pass enger s eat's s eatbelt w hic h w hen not f aste ned o r fastened im pro perly wo uld le ad to the d amage of the seatbelt's pretensioner caused by pressure from the seat cushion, m akin g it unusable in the f uture. Th e recall is to b e is sued for the GL 8 m in i va ns m a n uf a ctur e d du ri n g N ovember 201 0 an d N ovember 2012 . Th e co mpany is to issu e the recall b y D e ce m b e r 2 0 1 2 f o r c he ck up , m aintenan ce an d cor rectio n o f the problem. T he Buic k G L8 is a min ivan sold in China and reported a sale of ab out 5,617 GL 8s in November 2012.
Monthly AutoMark Magazine
China Will Make More Cars than Europe This Year: Report The People’s Republic of China has been a manufacturing behemoth for decades, b ut only in the past 10 years the country has b een gainin g global momentum in the m an ufa cture of a uto mo b i le s . Mean while, Eu rop ean prod uction has b een deceleratin g under the weight of i ts s ov erei gn deb t cris is that has pummeled loc al dem and for big ticket items. Th e res ult o f these two trends: Chin a could end 2013 having prod uced 19.6 m illion passenger cars and tru cks while E urop e is exp ected to end the year having made 18.3 ve hicles, according to research from five f orecasting groups commission ed by The Finan cial Times. Th is would be an im portant moment in the global auto industry . Europe, where in dust ry w as bo rn an d wh ere ju st a decade ago the region was responsible fo r 35 percen t of all cars m anufactured w orldwide, has s een its share o f the m arket s hrink to nearly 2 0 perc ent .
1 million vehicle a year to build FAW-Volkswagen Empire FAW -Vo lk sw agen held a 1 m illi on vehicles ceremony in the 2nd assembly plant in Changc hun. Mr. An Tiecheng, the director o f BoD as we ll as ge neral manager of FAW – Volkswa gen, said in his speech, from the early day s w ith a sin g le prod uct J ett a to the curr ent prod uct line of tw o b rands Audi and Volks wagen with 9 serie s of prod ucts, from the initial prod uction capacity of 1 50, 000 to the pr es ent 1 mi lli on prod uction capacity, for t he 1 m illio nth ve hicle presented a gift of the 2 0th anniversary. The 1 millionth car is a landmark to lay a s ol id f ounda tio n of s ust ai nab le development of enterprises in the future for the F AW – Volk swage n. In 2007, ac co rd in g to the prevai ling m ark et pro spect s and their own st rength , the FAW – Volkswagen raised “one million” co nce pt – t o 2 01 2 , the a nnu al pr od uctio n to ex cee d 1 m i ll io n.
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MADE IN PAKISTAN MOTORCYCLES RETAIL PRICE LIST
70cc Motorcycle
Sr./ No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.
Product & Model Name Aan AI-70 Asia Hero AH-70 Bionic AS-70 Crown Lifan CRLF-70 Challenger BA-70 Diamond SD-70 Dhoom YD-70 Eagle DG-70 Ghani GI-70 Grace CT-70 Hero RF-70 Hero RF-70 Plus Habib HB-70 Honda CD-70 Hi-Speed SR-70 Jinan JN-70 Leader LD-70 King Hero KH-70 Moon Star MT-70 Master MD-70 Metro Hi-Tech MR-70 New Asia NA-70
Retail Price Rs. 42,500/= Rs. 42,500/= Rs. 42,000/= Rs. 42,000/= Rs. 41,000/= Rs. 42,500/= Rs. 49,000/= Rs. 41,500/= Rs. 45,000/= Rs. 42,500/= Rs. 46,000/= Rs. 47,000/= Rs. 42,500/= Rs. 67,500/= Rs. 43,000/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 44,800/= Rs. 41,500/=
Sr./ No. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45.
Product & Model Name Pak Hero PH-70 Raftar KM-70 Ravi Premium R1 Ravi Hamsafar-70 Road Prince RP-70 Royal Star RS-70 Royal RL-70 Racer AS-70 Safari SD-70 Sakai SK-70 Sitara GT-70 Sohrab JS-70 Sonica SM-70 Super Asia SA-70 Super Star SS-70 Super Power SP-70 Super Power Delux Toyo TG-70 Target TT-70 Unique UD-70 Union Star US-70 United US-70 Zxmco ZX-70
www.automark. pk | January-2013 | Page 43
Official Supporting Magazi ne for Pakista n Auto Parts Show 2013 Karachi - Pak istan
Retail Price Rs. 42,500/= Rs. 42,000/= Rs. 47,700/= Rs. 46,200/= Rs. 42,500/= Rs. 42,000/= Rs. 42,500/= Rs. 42,000/= Rs. 40,000/= Rs. 45,50/= Rs. 43,000/= Rs. 44,500/= Rs. 42,400/= Rs. 43,000/= Rs. 42,500/= Rs. 42,500/= Rs. 45,000/= Rs. 42,500/= Rs. 40,000/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/=
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By Mohammad Shahzad S.A.E; D.M.P
Monthly AutoMark Magazine
Battery ….. The Heart of your Electrical System A storage battery is a black box with two posts on top or side under the h ood is the heart an d source of electricity. Only few part s of a car give so much for so little as does t he sto rage bat tery. Ju st give it ten der lov in g care at regu lar in tervals an d it will perfo rm we ll for years . If neglected, it neve r ho wls, growls, grin ds or sq ueaks for attention as there are no m ovi ng parts in the b att ery. It jus t s low ly we akens an d dies. A battery is an electro-chemical storage an d charge ab le device wh ic h turns chemical energy into electrical en ergy an d later st or ed o r r ele as ed wh en needed.Just as water tank sto res water for fut ure use. In rechargeable batteries this process is repeated many tim es. The care of this electro-chemic al device is ve ry imp o rtant to k eep tr ouble fr ee cranking engine, start ing and operating ot her com ponents and ac cessories for your s afety and comfort .
Energy Cycle When you turn your k ey in the ignition to crank and startyour engine, b y doing so, you are transform ing battery stored chemical energy into electrical en ergy wh ich help s to turn starter m otor. This is d one b ytransferring into mechanic al energy to crank and startyour engin e, an d this is how you b ring life to yo ur engin e that helps m ake your car ru n. Once your engine starts, this mechanical energy converts b ack to electrical energy with the help of a lternat or wh ich is drive n w ith the belt an d charg e the batt ery to s tore as chemical energy an d releases when needed to operate engine, components and accessories on demand. Star ting an engine in cold w eath er requires greater cranking p ower. And if a battery power has been diminished by perfo rm in g in high heat during the
summ er, t hen turning the engine over in fr eez ing tem perat ure may req uire more cran king am perage than t he chill batt ery can deliver. A good rule of thumb in det ermin ing w hether y our b at tery needs to be replaced is if it is m ore than thre e years old, which is when m ost batteries begin to fail.
Why winter is tough on batteries and alternators? It m ost ly happ ens every winte r, righ t afte r the first cold snap. A battery is a can f ull o f chem ic als that pr oduce electrons. The chem ical reactions inside bat tery take place more slowly when it is cold ; as a res ult it pro duces fewe r electrons , or as your b attery gets old er the electrolyte depletes it s chem ical reac tio n in sid e bat tery. Th e st arter mot or therefore has less energy to work with when it tries to start the engine and this c auses the engine to crank slowly. It’s all about supply and demand factors too, as the winter gets cold, the day light i s s ho r t an d y o u ha v e to us e mo reheadlight swhen leaving early and on late return. Your b attery hard ly gets a fu ll c harge as it is being used at a fast pace by op erat ing heater/defros t an d ot her ac cess ories. The alternato r is a d ev i ce w h ic h co n v er ts e ng i ne mechanical powe r into electrical energy and replenishes/charge b attery to st ore as ch em ic a l en erg y. Du rin g co l d winter,m oisture, rus ty/ poor ground and worn -out be lt all affe cts alternator output that will could also reduce its chargin g output to bat tery an d could cau sefail to cran k or start your en gin e. Another factor is t he engine oil when it ge ts a lot thic ker in cold we ather. Yo u prob ab ly know that cold pancake syrup or honey from the ref rigerato r is a lot thicker than hot syrup or honey. Oil does
the same thin g. So when you try to start a co ld engin e, t he engin e has to push aro und the co ld , go oey oil an d that makes it harder for the engine t o s pin. In really cold wint er motorist must use synthetic en gin e oils because these oils st ay liq uid in cold temperatu res. Most people either keep t heir cars in heated garage s o r use "blo ck heaters " to ge t around these p ro blem s. A b lo ck heater is device on the engine b lock, like a little electric heater that you plu g into the house hold electriccal outlet to keep the en gi ne w ar m a nd a ls o e nha nce cab in heat in g fo r your com f or ta ble mo toring.
Care and Preventive Maintenance Preventive maintenance is vital for your car’s trouble free operations. Have your batt ery checked/load tested every time wh en you visit your deale r/ shop f or engine oil and lubrication service as part of under hood inspection. Most batteries are now m ain tenanc e-free and no need to top up. However, if your battery needs to top up, never use tap water, alway s usee le ctr oly te or com m onl y call ed b att ery water, available at m os t f uel st at ion s . Keep clean an d tig ht bo th term in als , an d secure yo ur b att ery holding clamps as they ge t loose due to ro ugh an d b umpy ro ad s co ndition s, wh ich could cause internal damage to your battery and could resulted into low or d ead bat tery at any tim e. If you find wh ite powder on the battery term inals, you can try to c lean by using mixture of bak ing powder an d water with an old tooth brush. Always make sure to check charging system as this could be low due to loose belt or termin als/connections or d efect ive alternator. Kee p your car up! It will never le t you down .A lways drive safe, safety st art s !
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International Automotive Industry - Update
Monthly AutoMark Magazine
Ratan Tata retires, Cyrus Mistry takes over "The future growth of the group will be led in the coming years by Cyrus Mistry. I am sure that he will receive from you the same support, the same commitment and the same understanding that I have enjoyed over the years," Ratan Tata said. Th e re w as no ev ent to m ar k the oc casio n, no speeches an d the ic on him self was not even there at Bo mbay House to s ee the transitio n, as Ratan Nav al Tata on last mo nth retire d as chairm an of the $ 100 -bil lion Tata Gro up, a ft er a 50 -year ass oc iation . Cyrus Pallon ji Mistry, 44, unanimou sly named a year ago as Tata's successor by the bo ard o f Tata So ns, the hold in g com pany, will take ove r the reins as the sixth chairman of the group, which was es tab l is hed i n 18 68 b y Ja m se tji Nusserwanji Tata. Ratan Tata, who turned 75, will now be the gr o up' s cha ir m a n e m er it us . "He ( Mistry) has been on the board of Tata Sons since August 2006 and I have been im press ed w ith the q ualit y and calibre of his part icipation , h is astu te observations and his humility," Tata had s aid of his s ucces s or , cal ling hi m intelligent and qualified. At Tata Gr oup headquarters Bom bay H o u s e, s c o r es o f j o ur n a l i s ts , photo graphers an d TV crew waited for Ratan Tat a to arrive bu t were told that he was not in stat io n. Mist ry - wh ose sist er is m arried to N oel Tata, Ratan Tata's half-brother - made a qu iet entry. In his farewe ll letter to all Tata Group employees , Rata Tata thanked them for their suppo rt extended during the las t two decades when he was the chairman. "This is also the last tim e that I write to yo u prio r to m y r etir em ent as the chairman of the Tata Grou p and I want to convey to you how p rivileged I have been to have had the op po rtu nity o f le adin g this great gro up over the las t tw o decades throu gh go od tim es and bad," Tata said. Tata urged the employees to extend the sam e s uppo rt to his successor, Cyru s Mistry. "The fu ture growth of the gro up will be
led in the coming years by Cyrus Mistry. I am sure that he will receive from you the same support, the same commitment and the sam e understandin g that I have enjo yed o ve r the year s, " he s aid. It will b e a no mean task for Mistry, the youngest son of construction magnate Pallonji Mis try, wh os e f amily is the large st shareholders of Tata S ons with an 18.8 perce nt stake. The Tata Group today has in its fold 100 com panies, manufacturin g from salt to steel an d soap to cars, wit h a turno ver of $10 0.09 billion -- clo se to 60 percent of which comes from overseas -- having o per at i o ns i n 80 co untr ie s an d employing 4 50,000 peop le. M is tr y, w ho ho l ds an M .Sc. in
m anag ement fro m London B usin ess School, will b e t he s ixth chairm an of Tata Group in its 144-year hist ory and only the second who does not carry the "Tata" su rnam e. Others besides Ratan Tata who held the position of chairm an o f the Ta ta G ro up ar e: Ja m s etji Nusserwan ji Tata, Sir Dorab Tata, Sir No wroji Saklat wala an d J.R.D. Tata. "I take this responsibility very seriou sly and in keeping with the values and ethics of the Tata Gro up I will undertak e t o le gally dis ass oc iate mys elf fro m the man agement of m y fam ily b usinesses to avoid any issue of conflict of interest," Mistry had said on his appoint ment as depu ty chairman of Tata Sons last year. Mis tr y had j oin ed the b o ard of his fam ily-run firm Shapoo rji Pallonji & Com pany in 19 91 an d was ap po inted managing director of the company 1994. Mis try left his family business last year in November upon his appoint ment as Ratan Tata's successor in Tata Sons, the ho ld i ng com pa ny o f sa lt -to -s teel conglomerate Tata Group.
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Lahore Metro Bus Project
Monthly AutoMark Magazine
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