Automark Magazine April 2014

April-2014 edition Volume 07, Issue 4

Pakistan’s premier magazine on automotive, engineering & energy sector

Monthly

AUTOMARK International Editor-in-chief Muhammed Hanif Memon Technical Editor Muhammad Shahzad

Advertising Manager Tahir Siddiqui

Circulation Manager Abdul Khaliq

Graphic Designer Salman Hanif

Web Master Murtaza Hanif

CONTRIBUTING IN THIS ISSUE M. Yousuf Shaikh Ali Hassan M. Owais Khan Muhammed Shahzed Advisors Engr. IHT Farooqui GM Plant P.M. Auto Industries Hyderabad

Imtiaz Rastgar CEO, Rastgar Group & CBI External Expert, Ex-chairman EDB Islamabad J. Pereira Genera Manager Customer Support Division Al-Haj Faw Motors (Pvt) Ltd. Karachi Muhammad Yousuf Shaikh Founder & Chairman Pakistan China Motorcycle Industry Council Karachi Syed Mansoor Rizvi Principal Officer M/s. CNH Services (Pvt) Ltd. Karachi Mr. Ashfaq Memon Senior Manager Marketing Memon Motors (Pvt) Ltd. Maker of Super Star Motorcycles Hyderabad

Postal Address Active Communications D-68, Block-9, Clifton,Karachi Tel : 021-32603371 Mobile: 0321-2203815 E-mail: automarkpk@gmail.com website: www.automark.pk

AutoMark Canada Office Managing Editor: Mohammad Shahzad S.A.E. D.M.P. 41 Jordana Drive Markham (Toronto) Canada L3S 3N8 Phone: 905-472-8282 Email: automarkcanada@gmail.com AutoMark REGD: MC-1330 Published every month by M. Hanif Memon The views expressed by contributing writers and comments do not necessarily reflect the views and policies of the Monthly AutoMark magazine's management

Pakistan, Bahrain sign 15 MoUs to boost trade and investment Pakistan and Bahrain signed 15 memorandums of understanding (MoUs) and two agreements aiming at boostin g bilateral trade and investment relations in different sectors. These MoUs and agreements were inked at the conclusion of a day-long Pakistan-Bahrain Business Forum which was jointly organized by the Ministry of Industries and Commerce Bahrain in collaboration with Pakistan’s Ministry of Commerce and Board of Investment.

Representatives of different private companies and higher officials of the both governments inked the MoUs and agreements on behalf of their respective sides.

It's time invited Bahrain’s business community to take maximum benefits from the trade and business opportunities existed in different sectors of economy in Pakistan.

The King of Bahrain’s visit was at an appropriate time when Pakistan was emerging economically and politically as a vibrant and stable state, he added.

Minister extended the full support for the investors of Bahrain and stressed the need for further enhancing business to business links between the two countries.

The minister urged the Bahrain business community to exploit investment opportunities in the power generation and alternative energy sectors in the country.

Pakistan had about 180 billion tons of coal res erves worth US$ 9 ,00 0 billion , bu t unfortunately the mining sector was just contributing 2 percent in the national GDP. Pakistan offered 17 percent returns on the investments in alternative energy resources, including solar and wind sectors and the business community from Bahrain could also benefit from this opportunity.

Minister for Industries and Commerce Bahrain, Dr. Hassan .A. Fakhro said the current volume of trade between Bahrain and Pakistan stood at only US$ 400 million, which would be further in c reas ed du rin g th e da ys to c ome.

Bahraini businessmen that about 700 foreign companies were operating in Pakistan and earning huge profit.

CONTENTS

Monthly AutoMark International April-2014 EDB wants to take auto sector into global market Exclusive Article by Ali Hassan

12-13

BUDGET PROPOSAL-2014-15 ‘Trimmed’ uplift budget proposed for next year

14

PCMIC Intended investment from China Exclusive Article by M. Yousuf Shaikh

15-17

Pakistan engineering sector back at Hannover with the dutch CBI

18

Bike parts valuation ruling still on higher side Exclusive Article by Ali Hassan

19-21

EDB’s 5-year draft for auto policy, where SME bike makers stand

by AM Research

22

How Car Financing Works in Islamic Banking Exclusive by Salman Ahmed Shaikh

23

Cut in car prices not at par with rupee’s gain against dollar Exclusive by Owais Khan

25-26

Motorcycle Production Fig.

32-33

The Hell…Under Your Car’s Hood!

Exclusive Article M. Shahzad

41-43

Rapid transit system to help ease traffic congestion Rawalpindi-Islamabad Metro bus project

44

visit: www.automark.pk

Exclusive Article by Ali Hassan

Monthly AutoMark International

EDB wants to auto sector into market

take global

APMA chief said EDB takes the pre-budget proposals every year but few days before budget announcement, the budget comes out with a different direction which means that the pre-budget meetings and correspondence hold no interest for the government.

T

he Government has undertaken various initiatives for economic reforms an d m ark e t ac ce s s th r o ug h FTAs/PTAs/GSP Plus in order to enhance competitiveness and taking the industry into global market.

Eng ineer ing good s i ndu st ry i s considered to be a key player in achieving economic development objective. Effective rationalization of tax and Tariff Structu re, procedures, regulatory environment etc, have been the major measures undertaken by the Government so as to enable the industry to play a lead role towards product diversification and market expansion, said a letter issued by the Engineering Dev elop m ent Bo ar d (E DB) on March 27 to all th e auto sector stakeholders.

Reacting on the first initiative (first para above), chairman Association of Pakistan Motorcycle Assembler s (APMA) Mohammad Sabir Shaikh said that this exercise had been in practice for the last eight years but it failed to produce any positive results.

On second intiative (para two above), he said if the government understands the value and importance of engineering

and auto industry especially SMEs, then Pakistan’s potential to double exports can be achieved as per desire of Prime of Pakistan Mian Nawaz Sharif.

Engineering Development Board (EDB), in continuation to previous practice, has initiated Competitiveness and Efficiency Improvement Exercise for the Fiscal Year 2014-15, as per prescribed Terms of References (TORs) / G uiding Principles, given as under; to redress the tariff and other related issues, which are hindering competitiveness of the industry and their entry into global market.

Sabir said the EDB especially its top four officials like CEO, GM Policy, DGM Tariff and Incharge and DGM Tech and Tariff, have to change their attitude.

Because of their changed attitude, the working conditions will become friendly and every sector will feel level playing field including SMEs.

Terms Of References (TORs)/Guiding Principles: a. Expansion of SRO 693(I)/2006 by including parts indigenized after last revision. Sabir Shaikh believes that this SRO should be immediately abolished without wasting any time. b. To evaluate the performance of the industry under the TBS Regime, its role and impact on indigenization, cost reduction of OEMs and Auto Parts Makers and passing on the benefit of reduction in duties being availed through IORs under 655(I)/2006 to consumers.

He said IORC should be terminated and every approved assemblers should be granted powers/permission of importing ra w m ater ials, assemb lies, sub assemblies, components and sub

comp onents wi thou t any EDB’s permission. The government should directly allow them through SRO or policy. c. On developing instruments to encourage further indigenization. Sabir Shaikh that the word indeginizatin remains in the SRO and notifications instead of becoming a practical reality. d. T o assess th e tax and tariff environment of the auto industry including the customs duties, sales tax, FED, withholding tax regime, paratariffs etc. He said that a uniform tax stru ctu re sh ould be introd uced otherwise the government officials and the industries will misuse all the taxation system in next eight years again. e. To assess the ongoing negotiations on PTAs / FTAs and already concluded FTAs, issues relating to WTO, Trade Policy, competing countries tax and tariff structure and the global trends on fiscal policies for the auto sector.

He said perhaps the EDB is unaware that any PTA or FTA exist in the auto

www.automark.pk | April-2014 | Page 12

continued on next page

Monthly AutoMark International

Exclusive Article - continued sector with any other countries. He said that the EDB should stop misguiding the government on PTAs and FTAs on auto sector as Sabir believes that PTAs and FTAs would not boost the local industry. f. To improve the procedures and implementation of various SROs applicable to the auto industry through making the processes more transparent, faster and simpler. The government, Sabir said, should abolish all the SROs on the auto sector immediately and there should be one policy document for the entire auto sector. g. On identification of loopholes in SROs to discourage their un-fair use, he said all the SROs are suitable for big industries instead of SMEs including assemblers and vendors. h. On assessing export potential /prospects of automobiles and parts and devise mechanism for Market Expansio, he said the sales tax and customs duties refund system should be improved as SROs like 656 is creating hurdles for exports. i. On issues related to under invoicing, mis-declaration, smuggling and used parts/vehicles import. Sabir said the Customes valuation system has to be unified for various countries. For example, all the Chinese imports of parts for OEMs and commercial markets should be on the same value. j. On steps for easy and smooth access to inputs and endeavor to remove all the possible irritants in the applicable policy and procedures, he elaborated that in case an OEM tries to directly import parts, the government should support the OEM instead of creating problems th rough importable list and pr odu ction certificates. The government has to simpplfy the valuation ruling for OEMs as well as commercial importers.

The EDB said in addition, it is also to highlight that Federal Board of Revenue (FBR) has under-taken an extensive exercise for simplification / revision/ phasing out of concessionary SROs [including SRO related to Automotive Sector] with a view to analyze the impact of concessionary regime on industrial growth, export competitiveness, import substitution, further localization of parts and more importantly passing on the benefit of concessions to the end consumers.

Sabir Shaikh said that the FBR must understand that the government has to phase out auto sector SROs in the coming budget 2014-2015. Otherwise,

two to three more years would again go in waste in understanding the issue.

He said the government wants direct impact of taxation measures to reach the end users. However, it is only p ossib le w h en th e g overnm ent introduces a uniform policy for both large scale and SMEs. There is a need to remove hurdles of IORC besides bringing uniformity in valuation system, removing the hurdles like production certificates and importable lists by the EDB etc. This will help the industries to introduce new models at affordable prices.

The EDB in its letter dated March 27 said concessionary tariff on locally produced inputs viz raw materials, components, sub-components and machinery be withdrawn over 03 years period.

Sabir said that the concessionary tariffs should be removed in this coming budget as these SROs were introduced in 2006 for five years. This was a failed policy of former Finance Minister Shaukat Aziz who introduced Tariff Based System (TBS) instead of moving ahead with deletion programs.

The EDB said in view of fore-going, all stake-holders are requested to prepare proposals with concrete/viable justifications and send these to EDB enabling it to firm up composite and comprehensive recommendations for the Budget 201415.

APMA chief said EDB takes the prebudget proposals every year but few days before budget announcement, the budget comes out with a different direction which means that the pre-budget meetings and correspondence hold no interest for the government.

He added the government takes feedback and suggetions of the SMEs tw o months prior to th e budget annuncement but it actually favors the big assemblers by making policies serving their interest.

The EDB in its letter said w hile formulating the proposals, the provision of the above referred TORs, current

import policy, Tariff 2013-14/Laws (SROs), Customs General Orders (CGOs), FTAs/PTAs, (available at CBR Web Sites) may carefully be examined /consulted. Wherever required, the proposals may be supported with statistical data etc.

APMA chairman said all the policies and SROs made in the last 15 years were not in the interest of the country, not revenueoriented and were basically following an anti localization policy and also against the industriliazation and employment.

He said the government should focus in the budget on two type of duties – duty on spare parts (for OEMs, commercial market, assemblies, sub assemblies, components and sub components) and secondly on completey built up units.

Valuation system (cars, bikes, tractors, LCVs, etc) if imported from China then valuation rules should be the same. For Far East (second valuation category).

For Japan and Europe (third valuation category). There is a need to announce imported parts ruling on per kg basis before the Budget. This will reduce smuggling, under invoicing and misdeclaration.

He strongly demanded that issuance of various permissions through the EDB such as importable lists, production certificates and IORC should be done away.

All over the country the dealers of auto sector and parts should be registered in the sales tax net.

Those who do not want to come in the ST net, the government should charge extra five per cent GST from the dealers.

He suggested the government to reduce the GST to 15 from 17 per cent in the budget as this would help curbing sales tax evasion.

He was of the view that the committees formed by the finance minister under FBR in which FPCCI and some other chambers are their members is not enough as there is a need to induct more experts of their field.

The government has to give its due attention to the two wheeler segment this year especially and efforts should be made to pressurise the leading assemblers to bring a change in the decades old 70cc models.

Policy hurdles, if removed, would encourage assemblers to introduce new models in the country...

www.automark.pk | April-2014 | Page 13

Budget Fiscal year 2014-15

Monthly AutoMark International

BUDGET PROPOSAL

‘Trimmed’ uplift budget proposed for next year

Federal authorities have proposed Rs506 billion for development spending in the upcoming financial year (201415), which is 6% less than the original development budget of the current fiscal year – continuing the policy of giving less priority to development spending in its second year of rule.

The Ministry of Finance has formally indicated Rs506 billion for the Public Sector Development Programme (PSDP) in the financial year 2014-15, which will commence from July.

According to Ministry of Planning and Development officials, the Pakistan Muslim League-Nawaz government had announced Rs540 billion for the PSDP for the current fiscal year. The proposed budget is Rs34 billion or 6.3% less than this year’s development budget.

So far, the indications are that the actual development spending will remain significantly lower than the budget approved by Parliament.

The reduced development spending will have serious implications, as the government spending for development purposes is one of the main contributors to economic growth. Economists like Dr Nadeem ul Haque, the former Deputy Chairman of the Planning Commission, have been advocating that austerity should be

eschewed for the sake of economic growth. The new development budget envelope has been indicated to the Ministry of Planning and Development that will now work out the proposed development budget ceilings of each federal ministry and department.

However, Prime Minister Nawaz Sharif is t h e a u th or ity t o ap p rov e a development budget higher than the indicative one during the National Economic Council meeting, which takes place days before the budget is presented in Parliament.

The development budget has been indicated under the three-year MediumTerm Budgetary Framework (MTBF) – a document that indicates the budget of

the new fiscal year in addition to setting rolling targets of the next two financial years.

From July through December 2013-14, the government had spent Rs120 billion on d e v el op m en t p r o gr a m m es , restricting the expenses to 22% of the annual development budget of Rs540 billion. According to standing financial management instructions prescribed by the finance ministry, the government is entitled to spend 40% of the annual budget in the first half of the fiscal year, while the remaining is spent in the next half.

The federal government resorted to reducing the development budget after it failed to curtail the non-development spending, which increased to almost half of the total budget in the first half of the fiscal year.

Of the Rs540 billion development budget, an amount of Rs115 billion had been allocated for new initiatives. In fact, the Ministry of Finance has not yet formally indicated the availability of the Rs115 billion, said Asif Sheikh, the planning ministry spokesperson.

The federal government has linked the availability of Rs115 billion with the Federal Board of Revenue’s ability to achieve Rs2.475 trillion annual tax target, a goal that the FBR is surely set to miss. The FBR has so far posted an average growth rate of 17% while it needs 28% to collect Rs2.475 trillion revenues.

Officials said that after witnessing the results of the first seven months, the federal government was expecting that FBR may not collect more than Rs2.345 trillion. The reduction in collection will also have adverse implications on next year’s budget, they added.

Pak Suzuki reduces prices Suzuki Motor Company Limited (PSMCL) has reduced car prices, a decrease ranging from Rs5,000 to Rs100,000, with effect from April 7, 2014.

Suzuki Mehran VXR price has been cut

by Rs5,000, Cultus by Rs10,000, Ravi

by Rs10,000, Bolan by Rs10,000, Swift

by Rs20,000, and Liana by Rs100,000.

Pak Suzuki is the largest car assembler in Pakistan and becomes the last company to reduce car prices after Indus Motors, local affiliate of Toyota Motors, and Honda Atlas Cars, local affiliate of

Honda Japan.

All three car assemblers in the country have reduced prices in the wake of the Pakistani rupee’s appreciation against the US dollar, which has had an impact on their costs.

www.automark.pk | April-2014 | Page 14

PCMIC INTENDED INVESTMENT FROM CHINA Challenges and Opportunities for Japanese’s (JV) Motorcycle Industry Prime Minister Nawaz Sharif at Pakistan Auto Show

by M. Yousuf Shaikh

C h inese

Dir ect inv estment i n Manufacturing sector for New design, new tech & Large-Displacement Chinese Motorcycles and small cars should be done soon through PCMIC and for this government should removed th e unnecessary departmental hurdle and amend the new entrant policy as new product policy to allow manufacturing of new products under new entrant policy to the all existing manufacturers wh ich bring abou t r evolution in Pakistan’s exports. Chinese Motorcycle Sector of Pakistan Auto Industry plays a part to realize the Vision of Prime Minister of Pakistan Mian Muhammad Nawaz Sharif to manufacture Pakistani car &to double the Exports of Pakistan on current level.

China’s threat and opportunity is probably one of the most popular topics for policy makers of Japanese joint v ent ur e and Mem bers of t h ei r Associations those are not allow Chinese vehicle assemblers to join their associations. In this view the Pakistan China Motorcycle Industry Council (PCMIC) was created to provide a massive platform to Pure Chinese & Pakistani enterprises. The PCMIC is the m os t p op u la r nonp r ofi t t r ad e organization of Pakistan and China’s M otorc ycle t ra de and Ind ust ry enterprices.

(PAMA and PAPAM), in particular, are very much concerned with the rise of China as the PAPS show-2014 and recent huge advertisement in TV channel was actually to continue the benefits through concessionary SRO’s and influence and divert the government Trade & industry friendship policies particularly new auto industry policy.

China is seen as both a threat and an opportunity for PAMA & PAPAM. Obviously, Pakistan Chinese motorcycle huge market is very attractive for Chinese direct investment and their p roducts export via Pakistan to

(PAMA and PAPAM), in particular, are very much concerned with the rise of China as the PAPS show-2014 and recent huge advertisement in TV channel was actually to continue the benefits through concessionary SRO’s and influence and divert the government Trade & industry friendship policies particularly new auto industry policy.

China is seen as both a threat and an opportunity for PAMA & PAPAM.

neighboring countries.

Chinese investors, increasing rapidly, after continue efforts by the PML(N) government and PCMIC main target to provide volunteer services to Chinese Motorcycles industrial groups to invest in Pakistan as Several Chinese large conglomerates have invested in heavy industries and energy sector in Pakistan.

At the same time, for second-tier Newly Industrialising Countries (Thailand, M a l a y si a , In d o ne si a a n d t h e Philippines), China is a fierce competitor i n th eir key indu stries suc h as automotive, electronics, textile and garments, and so on.

For Pakistan’s which is transitional economies, the rise of China can be viewed even more easy, as it strongly a ffec ts effo rt s b y P ak ist an to industrialize and bu ild up their indigenous technological capabilities.

Not only opportunities for their exportled industrialization strategies lately started have been compromised by Chinese goods, their import-substitution strategies are in opportunity because of flooding of Chinese consumer and industrial goods.

On the global scale, motorcycle industry

www.automark.pk | April-2014 | Page 15

Exclusive Article

by Muhammed Yousuf Shaikh

Muhammad Yousuf Shaikh, An Auto In dustry Con sultant , Motorcycle Industry Expert, Motorcycle Designer, China S o u r ci n g E xp e r t , S e ri al Entrepreneur and the Founder & Chairman of Pakistan China Motorcycle Industry Council (PCMIC), offers his analysis of the motorcycle trade & industry trends from Pakistan & China.

The Chairman PCMIC working with motorcycle trade & industry for over two decades, Yousuf believe that new projects could help motorcycle industry to design and produce new design, new tech & large displacement motorcycles i n Paki st an to compete with Indian motorcycle industry as Pakistan offered exclusive incentives in taxation on new entrant to manufacture new design, new tech & large displacement motorcycle. For further details and for assistance please email at p ak c h i n a .m i c@ gm a i l . co m

PCMIC Pakistan Office;79-A, Phase I, Sunder Industrial Estate, Behind PIE Head office, Lahore.

Pakistan. Cell # +92 300 2613692 PCMIC China Office:-

: 0086 23 61729263 Skype live: yousufshaikh email:yousufshaikh@hotmail.com,pakc hina.mic@gmail.com www.globalautosources.com, www.facebook.com/PCMIC.org www.linkedin.com/in/yousufshaikh

Monthly AutoMark International

is a mid-tech and rather technologically mature industry. Automotive sector of several Asian latecomer economies started with assembling motorcycles and producing their parts by using imported technologies. Now Pakistan large producers with the production capacity of 2.0 million (very few units being exported ) and 2.1 million respectively in 2014.

Pakistan markets were basically dominated by Japanese JV’s. Local companies are suppliers, especially second- or thirdtier ones. Some of them, especially at the first tier, are joint ventures with foreign component makers.

Pakistan has longer history of producing motorcycles locally. Japanese JVs have invested in the countries since 1980s, while investment in china started in the mid-1990s. Each JVs has developed its own networks of suppliers. Therefore, local (owning by Pakistani’s, foreigners, joint ventures) suppliers in Pakistan have longer experiences in learning and accumulating technological capabilities.

Apart from engine and gear which r e qu ir e h i g h es t te c h no l og i c a l capabilities, other components can be made locally.

Another major difference is that now in Pakistan there are many emerging purePa ki stani c ompa nies pr odu cing motorcycles with their own brand, distributing channels, and networks of suppliers. Started in 2003, many pure Pakistani companies such as UNIQUE , RAVI, UNITED, ROAD PRINCE, UNION STAR, MOONSTAR, WINNER, CITY HERO, ASIA HERO, SITARA and so on Motor became the largest producer of motorcycles in Pakistan with the market share of 60% per cent . These pure-Pakistani firm has an aim of not only having its own brand but trying to build and upgrade tech nological capabilities of a network of purePakistani suppliers as a company work under the slogan “MoonStar, PurePakistani Motorcycle”. However, in practice, all Pure Pakistani companies

still has to seek technologicallysophisticated parts from Japanese joint ventures in Pakistan.

Another is a group of Pakistani suppliers, SME . They began with supplying motorcycle parts to Japanese JVs and selling their products in replacement markets both in Pakistan and abroad. With five core companies, the network of almost 100 SMEs have been built. They have jointly developed a few motorcycle parts and selling them under the different - brand They expanded their distribution network to cover repair shops all over Pakistan.

Recently, they teamed up with a Pakistani importers , which has financial strength and extensive distribution network, to produce a prototype of the whole motorcycle to be sold.

Ch i nes e” m ot or c yc le s’ i ncl u d e motorcycles assembled by Pakistan companies mainly using parts imported from China. ‘Others’ include motorcycles produced by foreign motorcycles assemb ling companies based in Pakistan other than Atlas Honda , Pak Suzuki, and Yamaha and imported motorcycles including those made by Honda’s subsidiaries abroad (e.g., Pakistan).

The Prime Minister speech at 37th exports award of FPCCI at February 08, 2014 and PAPS auto show of PAPAM at March 6, 2014 in Lahore.

The PM wish to manufacture Pakistani car and double the exports of Pakistan and for this formation of Pakistan business advisory council, comprising of business and trade representatives, which would meet with government officials at least after every three months, while PM and the relevant minister would also sit along with them and all business related matters would be

www.automark.pk | April-2014 | Page 16

Monthly AutoMark International

Exclusive Article - continued

Pakistan has longer history of producing motorcycles locally. Japanese JVs have invested in the countries since 1980s, while investment in china started in the mid-1990s. Each JVs has developed its own networks of suppliers. Therefore, local (owning by Pakistani’s, foreigners, joint ventures) suppliers in Pakistan have longer experiences in learning and accumulating technological capabilities. Apart from engine and gear which require highest technological capabilities, other components can be made locally. sorted out, besides taking policy decisions on the spot, this is the fastest mean to improve trade, exports and industry.

PCMIC welcome Prime Minister called upon the industrialists and traders to give their recommendations to the government for doubling the country's export volume as government eager to double the exports of Pakistan and we know that you personally hard working to achieve big export targets. In this regard PCMIC pleased to participate as volunteer of you r trade friendly government to achieve the targets.

I was personally come to see you in Lahore at 37th exports award of FPCCI to take chance to talk about the p ossibilities of hu ge exp or ts of motorcycles through to establish new industrial units with foreign investment particularly Chinese investment as government offer foreign investors a combination of value, huge upside and unique challenges. As giants like China run into growing pains, higher costs and negative returns, Pakistan markets are up–propelled by more political stability, generally, and easy access to modern communications, tech nology and capital.

Being a Chairman PCMIC working with motorcycle trade & industry for over two decades, I believe that new projects could help Pakistan motorcycle industry to design and produce new design, new technology small and large displacement motorcycles in Pakistan for to export as government offered exclusive incentives in taxation on new entrant for new tech m ot or cy cl e m a nu fac t ur i ng b u t departmental hurdles wipe out all the efforts of government which cause that still not a single unit establishes in new entrant scheme of government and for this government should amend the new entrant policy to allow manufacturing of new products on concessionary rate of duty to the all existing manufacturers as allowed to new entrant which bring about revolution in Pakistan’s exports.

The situation for investing in Pakistan markets is simple and powerful.

Pakistan is far behind developed countries like Japan and America and even playing catch up with countries like Thailand, South Korea and China, but they are catching up fast. Imagine a chance to invest right now in the China of 1980 when its wages were at rock bottom levels and it exported in a year what it now does every day.

It is clear that year on year in Pakistan there are many more motorcycles than cars on the road, an indicator that Pakistan motorcycle industry and markets are growing and have great potential to export of Motorcycles to many neighboring countries and African markets.

Pakistan Governments always focuses to enhance the traditional exports of Pakistan and never look on the non-traditional export items of Pakistan particularly the Motorcycles and other automotive products.

The Thailand, India and China’s major portion of their exports also are Motorcycles and other automotive products and auto industry vastly contributed in their economy but in Pakistan the role of automobile industry in exports is negligible due to lack of policies and unnecessary hurdles of regulatory bodies on auto industry.

Here I would like to mention that India’s automotive industry is one of the most significant and fast growing sectors of the Indian economy, averaging 20% annual growth. The automobile and components industry is a priority sector for the Government of India which projects the market will reach $145 billion by 2016.

In order to make this happen, the P a ki st a n’ s C hi ne se ve hi cl e manufacturers/ assemblers need an ever more strategic, collaborative relationship with the Government to work with supply chain and other stakeholders to achieve long term goals. We want the

Council (PCMIC) to help make that happen.

We feel that Mian Nawaz Sh arif government will be an opportunity for the Pak china Motorcycle Industry Council and industry to work together on the long term strategic development of the sector to enhance the exports of Pakistan adding automotive products particularly motorcycles which currently negligible.

The Pakistan China Motorcycle Industry Council is suggesting to the government to focu s on development of the motorcycle manufacturing sector of auto industry. Motorcycle Manufacturing; one of the most vital parts of the many economy, is a major source of jobs, contributes to a significant portion of taxes, drives for innovation and is an effective sector to meet many national challenges. The lack of supportive p oli cies sh rinks th e motorcycle manufacturing sector leaving the country with a wide trade deficit as imports outstrips exports.

The rising poverty and falling exports can be tackled by paying due attention to the overt axed and d eclining Motorcycle industrial sector which has been ignored since long, leading to economic weakness. The influence, importance and share of Auto sectors of the economy which are not as beneficial for the economy as automotive manufacturing has been increasing which may be good for the few but it has little positive impact.

Reforming the tax regime relieving Motorcycle manufacturing sector of the u ndu e bu rd en, protect ing loc al Motorcycle industry from unfair competition, barring high custom duties and extremely high custom valuation on import of partial CKD kits of motorcycles from china.

PCMIC vision is to revolutionize motorcycle industry by bringing in different types of motorcycles that fulfill the current demand in terms of quality, appearance and value with in an a fford a ble p ri ce for loca l and international buyers........

www.automark.pk | April-2014 | Page 17

Hannover Messe-2014 Press Release

Monthly AutoMark International

PAKISTAN ENGINEERING SECTOR BACK AT HANNOVER WITH THE DUTCH CBI Five Pakistani companies are displaying this year at the Messe Hannover, in Hall 5, at the CBI Pavilion. The Pakistani Com panies Pr onto Metal ,GM S Forgings, Loads Radiator Cores, Sherani Engineering , AMI Gears are part of the four year CBI Export Coaching Program for Pakistan and are part of a group of 30 from Pakistan. The Pakistani exhibitors are display a diverse range of capabilities ranging from gear manufacture, radiator cores, contract assembly work, ferrous forgings to jigs, fixtures and dies for sheet metal work.

CBI is the Dutch Centre fro Promotion of Imports from Developing Countries a nd su p p ort s th e engi neeri ng, horticulture, surgical and agriculture sectors of Pakistan. CBI Experts Peter Lichthart, Imtiaz Rastgar and Jan Elferink are assisting the Pakistani Exhibitors with their export efforts and training.

For the Pakistani exhibitors, this is a historic entry as the Netherlands Prime Minister Mark Rutten opened jointly with German Chancellor Dr. Angela Merkel, HANNOVER MESSE.The head of government of the Netherlands also

performed the common and traditional tou r of the exhibition with the Chancellor and opened a meeting of top industrialists of both countries. In his greeting to the fair, the Dutch prime minister was pleased to announce at the H A NN OVE R ME SS E: "G er m an thoroughness and Dutch creativity and flexibility are an unbeatable team Together, Dutch and German companies intelligent and sustainable solutions to global challenges.." With around 220

exhibitors and more than 50 industry events at the fair, the Dutch participation a new record dar. Never was there a greater exhibition of Industry and Science of the neighboring country at a t r ad e sh ow ev ent ou t sid e th e Netherlands.

Hannover Messe remains the world's premier trade fair for the engineering industry.

HINO PAK MOTORS Recently, Hinopak Motors Limited successfully inaugurated its new 2S dealer ship in Hyderabad by the name of "Hino hyderabad".

Hino Hyderabad will provide quality service to all truck & bus operator. Seen in the photograph are, Mr. K. Utsumi, Managing Director & CEO, Mr. Adil Shah, G.M. Sales & Marketing, Mr. Syed Zafar Ali, GM Customer Support, Hinopak and Mr. Fazal, CEO, Hino Hyderabad. | April-2014 | Page 18

Exclusive Review by Ali Hassan

Monthly AutoMark International

Bike parts valuation ruling still on higher side Valuation department always invites KCCI, FPCCI, PAMA, PAAPAM and MSPIDA in every meetings to ascertain and fix true value of parts.

The main stakeholders are 104 approved assemblers who are producing bike with their hard struggle.

Directorate G ener al of Customs Valuation, Pakistan issued new valuation ruling (664/2014) on March 31, 2014 on motorcycle parts under Section 25A of Customs Act 1969.

Like past practice, this Customs ruling also is loaded with confusion on same parts imported from China by the c omm erc ial im p ort er and b ike assemblers (OEMs).

Chairman Association of Pakistan Motor cycle A ssem blers (AP MA) Mohammad Sabir Shaikh said that Chinese parts are of same quality either imported by the commercial importers or by the OEMs. But Suzuki and Honda are Japanese branded bikes and if their assemblers import parts from China then it means genuine import of parts.

Around 104 other approved assemblers also import parts from China (almost same as being imported by the commercial importers).

He said the Valuation Department should clearly mention th at the c ommer cia l im por ters, Ch inese d omestic b rand s a nd Paki st ani local brands are same quality and

standards. But Honda, Suzuki and up coming Yamaha are genuine brands even their parts are imported from China.

Sabir said uncertainty also exists in the customs duty from zero per cent to 65 per cent coupled with valuation problems. Policy is basically strict for the 104 bike assemblers as compared to Japanese brands, he said addingin this situation how the revenue earnings of the country can be improved.

He said the government departments strictly ask the assemblers during the meeting to remain confine on the issue pertaining to the relevant department which means valuation department officials are not interested in talking on duties and taxes, policy matters with the EDB and FBR issues like sales tax evasion and smuggling. Officials of other departments also show same attitude d ur ing t he meeti ngs wi th bike assemblers.

APMA chief said valuation is purely a issue of bike assemblers who are domestically produced by the Pakistani

assemblers and all of them are APMA active members.

However, the Valuation department always invites KCCI, FPCCI, PAMA, PAA PAM and M SPIDA in every meetings to ascertain and fix true value of parts. Th e main stakeholders are 104 approved assemblers who are producing bike with their hard struggle.

He said in para three under discussion ruling, the department mentions words about APMA’s representatives where it mentions that parts imported by the commercial importers and by the OEMs of Pakistani and Chinese domestics brands are not same. Sabir Shaikh said that this is rediculous as these parts are same imported from China by the OEMs and commercial importers.

The original purchase price of the importers from China is much lower than prices mentioned in the ruling of 42 items. The valuation ruling issued on March 31 is on very higher side. If the government does not lower the values of these items then the smuggling w ill continue to th rive, he said.

www.automark.pk | April-2014 | Page 19

chart on next page

Monthly AutoMark International

Custom Valuation Chart Customs values for Motorcycle Parts:

Motorcycle Parts of China origin hereinafter specified shall be assessed to duty / taxes on the customs values given against them in the Table below

continued on next page www.automark.pk | April-2014 | Page 20

Custom Valuation Chart

Monthly AutoMark International

continued from previous page

www.automark.pk | April-2014 | Page 21

Exclusive Review on AIP by AM Research

Monthly AutoMark International

EDB’s 5-year draft for auto policy, where SME bike makers stand it seems that the AIP is being made at facililitating only three Japanese car and bike assemblers. He added that does the new auto policy really care about country’s revenue, industries, job opportunities, genuine localization etc.

On October 12, 2013, the story of new auto industry policy (AIP) began with the meeting of Economic Coordination Committee (ECC) and since then reports w er e h over ing ab out it s ea r ly announcements followed by delay in the AIP. Stakeholders held various meetings with the ministers and secretaries of different ministries for quick materialization of AIP, but it could not work.

All the stakeholders also submitted their proposals hoping that the policy would be announced very soon. As per past practice, the issues usually do not resolve so instantly so it can be said here that AIP final announcement has been delayed. As the Budget 2014-2015 is round the corner, reports said that the AIP may become a part of the Budgetary measures.

In the last one month, print media has been leaking various reports about the finalization of AIP draft.

According to a leading print media report appeared in second week of last month, the Enginee-ring Development Board (EDB) has prepared a five-year draft Automotive Development Policy (ADP 2014-19) evisaging incentives for the new investors, tightening the screw on existing ‘exploitive cartel’ and import of used cars. The media report was based on sources close to the Minister for Water and Power.

Since the breaking of this story, PAMA and PAAPAM were highly surprised over the leakage of this draft in the press.

Usm an Asla m Mali k Ch ai rm an PAAPAM informed Finance Minister Moh ammad Ishaq Dar th at th e A uto Development Poli cy dr aft appeared in the press had perturbed the industry strongly as none of the stake holders have been preview to its content.

As per discussions held a comprehensive auto p rogram is to be envisaged encom passing t he w h ol e b road spectrum of the industry. The industry also discussed a plan moving towards a National Auto policy with a time frame of 2025.

He sought Ishaq Dar’s intervention to put on hold any such considerations which may invoke or invite unnecessary comments from any quarters until we are able to finalize the National Auto Policy with your support. He said the draft appeared the press was totally unacceptable.

C hairman Association of

Pakistan Motorcycle Assemblers (APMA), Mohammad Sabir Shaikh said that he along with other members also attended the meeting for AIP but their proposals were missing in the AIP draft appeared in the local newspapers, which is really disturbing for the SMEs bike assemblers.

He said the government should realize that the main stakeholders are motorcycle assemblers of Pakistani and Chinese domestic brands who are producing more than one million units of two wheelers annually for the last many years.

The 104 approved units of two wheelers, he said, are producing Pakistani brands i n c ol lab or a ti on w i th Ch i nese assemblers.

He said that it seems that the AIP is being made at facililitating only three Japanese car and bike assemblers. He added that does the new auto policy really care about country’s revenue, industries, job opportunities, genuine localization etc.

According to media reports, Engineering Development Board h as accused Minister for Water and Power, Khawaja Asif of leaking Auto Development Policy 2014-19. Khawaja Asif is the chairman of an inter-ministerial committee constituted by the Economic Coordination Committee (ECC) of the Cabinet to prepare a new policy for the auto sector.

Finance Minister is reported to have sought a report from the Secretary Industries on the premature leakage of ADP. ...

Pak Suzuki raises bike prices Pak Suzuki Motor Company Limited (PSMCL) has increased prices by Rs1,900-Rs5,000 on different bike models, effective April 1, dashing hopes of lovers of two-wheeler who were expecting price cut after rupee’s surge against the dollar.

The new price of Suzuki GS 150 Euro2, GD-110 imported, Sprinter ECO, Raider and Sprinter ECO Deleted is Rs119,500, Rs109,900, Rs88,400, Rs96,400 and Rs83,400, respectively.

The company, in a letter to its dealers, had also increased retail commission by Rs500 to Rs1,300 on different bikes.

Market sources said the assembler is cashing in on the rising demand of its bikes as sales rose to 15,958 units in July-February 2013-14 as compared to 11,536 units in the same period last fiscal year.

www.automark.pk | April-2014 | Page 22

by Salman Ahmed Shaikh

Monthly AutoMark International

How Car Financing Works in Islamic Banking Owning a personal vehicle is almost a necessity in current times. In Pakistan, roughly speaking, there are just 10 cars per 1,000 people. Per capita incomes in Pakistan are rising, but so is inflation.

It is almost a necessity for salaried people to go for leasing a car rather than being able to p urch ase it from accumulated savings.

Conventional finance lease involves interest. In Islam, interest is not allowed.

For people who want to avoid interest, there is an alternate means of financing a personal car by way of Islamic leasing.

Islamic car leasing works on two separate structures: 1. Ijarah based leasing.

2.Diminishing Musharakah based leasing.

Ijarah Based Leasing Ijarah means to give something on rent.

In Ijarah, right of use of a property is transferred to another person for a consideration.

In Ijarah car lease, the lease period starts when the car has been delivered by the bank (Lessor) in a usable condition to the customer (Lessee). The bank (Lessor) bears the ownership related costs and the customer (Lessee) bears the usage related costs. Insurance, installation, import duty, delivery charges etc are paid by the bank and are added in its cost. Rentals are decided by the bank based on cost of the car and the period of lease.

The difference in conventional and Islamic lease comes in many ways. In an Islamic lease, the payment by the

and the customer starts using the car and pays rent for each period. In the end, the customer can purchase the car from the bank by way of a separate purchase agreement.

Diminishing Musharakah Based Leasing client is the rent for the use of car which is owned and whose risk is borne by the bank. If the car is destroyed or becomes unusable at any time during the lease period, the bank stops taking rent and does not charge rent for that period.

Penalty for late payment is charged for maintaining financial discipline and is paid to charity and not taken as income by the bank. During the period of lease, the car remains in the ownership and risk of the bank until the bank sells the car to the customer via a separate sale agreement.

T he process flow is as follow s: The customer approaches the bank for obtaining a car on lease. The customer undertakes to make periodic lease payments for the lease period. Bank receives the title of the car and pays the automobile vendor. Lease agreement is signed whereby the bank leases the car

In Diminishing Musharakah, the customer approaches the bank for joint purchase of a car. The automobile vendor of the car is paid by the bank and the bank and the customer enter i nt o a M ush ara ka h Ag reement.

The share of the bank in car is divided into units. These units are purchased by the customer periodically by making period ic payments. The periodic payments by the customer include rent for the use of car and payment for the purchase of bank’s share in car (divided in units). When the customer has purchased all units of the car, he becomes the sole owner of the car.

It is referred to as ‘Diminishing Musharakah’ because the ownership stake o f th e t e na n t increases and that of the bank decreases or diminishes with the re gu la r lease payments. The rent decreases as the ownership stake of the tenant increases.

About writter: Salman Ahmed Shaikh teaches Economics at Institute of Business Administration (IBA), Karachi.

He can be contacted at: salmanashaikh@iba.edu.pk

Pak Suzuki raises bike prices Pak Suzuki Motor Company Limited (PSMCL) has increased prices by Rs1,900-Rs5,000 on different bike models, effective April 1, dashing hopes of lovers of two-wheeler who were expecting price cut after rupee’s surge against the dollar.

The new price of Suzuki GS 150 Euro2, GD-110 imported, Sprinter ECO, Raider and Sprinter ECO Deleted is Rs119,500, Rs109,900, Rs88,400,

Rs96,400 and Rs83,400, respectively.

The company, in a letter to its dealers, had also increased retail commission by Rs500 to Rs1,300 on different bikes.

Market sources said the assembler is cashing in on the rising demand of its bikes as sales rose to 15,958 units in July-February 2013-14 as compared to 11,536 units in the same period last fiscal year.

The company did not mention the

reason of price increase, however.

Dealers at Akbar Road, the main market of two-wheelers, also expressed surprise over no cut in prices of Chinese bikes after rupee’s appreciation against the greenback.

A Chinese bike assembler said “we are neither reducing nor increasing the prices due to unstable sales scenario.”

www.automark.pk | April-2014 | Page 23

Upcoming Budge 2014-15 - Uudate

Monthly AutoMark International

OICCI presents tax proposals to FBR About the OICCI taxation proposals, the FBR chief informed that FBR plans to withdraw all SROs in an orderly manner soon and will ensure proper adjustments of SROs which are critically important for key factors in the economy.

Over seas Investors Ch amber of Commerce and Industry (OICCI) extended its support to the government in its efforts to increase revenue collection and streamline the taxation structure at a meeting held to present the OICCI 2014-15 Taxation Proposals to FBR Chairman, Tariq Bajwa and Shahid Hussain Asad, Member Inland Revenue (IR).

It was followed by an interactive session held between the FBR officials and the OICCI office-bearers on March 28. FBR Member IR Operations and Member Customs also addressed the meeting at OICCI in the city.

The OICCI President, Asad S. Jafar, appreciated the ongoing engagement initiative of the FBR Chairman and his top team with key stakeholders like OICCI whose members contributed over Rs700 billion annually to the Federal and provincial revenue.

He stressed that the OICCI key recommendations include restructuring of taxation system to facilita te investment and economic activity, facilitating the honest tax-payers through timely settlement of issues, all types of income must be subjected to tax, elimination of SRO’s judicially and documentation of the economy be accelerated without any compromise.

M. Abdul Aleem, CE/Secretary thanked the FBR Chairman for meeting a key demand of the Chamber by issuing the approval notification for offsetting provincial sales tax against FBR sales tax liability. Aleem presented the World Bank’s Ease of Doing Business (EODB) Index rating where Pakistan has sharply slipped from being 75 in 2010 to 110 in 2014 which had considerable negative implications in attracting FDI in the country. One of the key irritant in EODB has been the complications on paying taxes, including provincial and local taxes.

Voicing concern over frequent use of tax amnesty, the OICCI termed the trend `a disincentive to regular tax payers’.

OICCI’s 2014-15 taxation proposals

include several tax broadening measures to increase the tax to GDP ratio – like ef fe ctive e nf o rceme nt an d administrative reforms, filing of Tax Returns by all income earning segments and individuals earning more than the threshold, better and more effective utilization of NADRA database and other data from documented sources available to FBR. Other key proposals discussed were lowering of corporate tax rates, elimination or rationalization of minimum tax regime, faster processing of tax refunds, increasing incentives for attracting FDI, and involvement of OICCI in the exercise to review existing SROs to ensure minimum impact on FDI and continuing documentation of the economy.

Aleem also mentioned that reversal of some imp orta nt d ocu mentat ion measures w hich were introduced through the Finance Act 2013-14 were frustrating for honest tax payers.

Furthermore, he suggested that FBR may consider reverting back to the old administrative structure of tax zones and cycles to identify new tax payers.

The FBR Chairman, Tariq Bajwa, lauded the role of OICCI members wh o collectively contributed over one-third revenue collections in Pakistan. About the OICCI taxation proposals, the FBR chief informed that FBR plans to withdraw all SROs in an orderly manner soon and will ensure proper adjustments of SROs which are critically important for key factors in the economy. He informed that contrary to the general view, FBR did not have full access to various data bases, including that of NADRA. However, FBR continued to review all tax broadening measures and expected that over 100,000 tax payers would be added, annually, based on actions already initiated by FBR. In this respect, he also mentioned that FBR was reviewing the self-assessment scheme and wou ld make some structural changes to ensure a transparent system which is not exploited by tax evaders.

The FBR chairman and his team also responded to various general and sectorspecific questions from the participants and promised to review in detail all matters along with the OICCI taxation proposals.

The full set of OICCI taxation proposals included business sector-specific recommendations, strongly advocated that the most important focus of the government should be to substantially increase revenue collection to reduce th e h uge fiscal deficit, fi na nc e development projects to fuel th e stagnant economy, expand poverty alleviation programmes and meet necessary government expenditure.

More im portantly increased tax collections should be made from those who have, so far, kept themselves out of the tax-net to give confidence to the honest tax-payers and to take out the root-cause of unethical business practices in the country.

At the same time, OICCI has also recommended that new tax-payers should be brought into the tax-net by initiatives, convincing them about the benefits of paying proper taxes rather than through coercion or harassment.

The Overseas Investors Chamber of Commerce and Industry (OICCI), a business chamber representing nearly 200 multi-national companies operating in Pakistan, is a very important stakeholder and contributor to the economy of the country. These member companies, whose major shareholders are from 35 different countries of the world, operate in 14 major business sectors of the country, including the financial services, oil, gas, energy, pharmaceuticals, chemicals, fertilizers, pesticides, cement, food, consumer goods, engineering, trading and others.

57 of the OICCI members are listed on the Stock Exchanges of Pakistan and 46 members are associates of the 500 largest companies of the world listed by th e For tune m agazine in 2013.

www.automark.pk | April-2014 | Page 24

Exclusive Article by Owais Khan

Monthly AutoMark International

Cut in car prices not at par with rupee’s gain against dollar Indus Motor Company ((IMC) decreased prices by Rs 50,000-75,000 followed by Rs 30,000-40,000 by Honda Atlas Cars and Rs 5,000 to up to Rs 100,000 by Pak Suzuki Motor Company Limited.

Niether the government nor the strong arm of Ministry of Industries (EDB) have moved an inch to ascertain the reason of very low reduction in car prices by the assemblers as compared to eight per cent rupee’s rise against the greenback.

The cut in prices of locally assembled cars certainly looks an eye wash for the car buyers and not a relief in view of around eight per cent rupee appreciation against the dollar in the last over two months.

The price decline ranges from Rs 5,000 to Rs 100,000 on cars’ prices starting from Rs 625,000 to less than Rs two million.

The car assemblers usually remained in anxiety over dollar depreciation and adopted to stay tight lipped on the issue of its impact on prices, fearing reversal of dollar gain against rupee in coming months.

However, officially or unofficially they had handed over the price issue task to Pr esid ent P akist an Au tom obil e Manufacturers Assemblers Dealers Association (PAMADA) Iqbal Shah who misguided on car prices with his statements in print media.

With the support of car assemblers, many auto sector watchers feel that Iqbal Shah is now considered as an official spokesperson of the assemblers and especialy assigned to counter allegations of used car body chief H.M. Shahzad. It looks some kind of war of words between two dealers (used car and new locally assembled cars).

Many car assemblers also feel uneasy sit ti ng w i th H .M. S ha h za d i n government related meetings on auto sector issues. Even in the past they boycotted the meetings in Islamabad after knowing that the Ministry of Industries had extended invitation to H.M. Shahzad.

They also request the media men not to quote them with Shahzad in the news story about auto sector especially on used cars issue even if the newsmen try to balance the story by taking both side version.

Assemblers (CEOs, MDs and COOs) feel

that Shahzad’s caliber and skills are not enough to match with their skills and qualities. Even below ranking executives also feel hesitant to be quoted if they knew that H.M. Shahzad was also being taken on b oard for comm ents.

So the assemblers have been using its authorized dealer body chief Iqbal Shah to vent their anger on H.M. Shahzad on industry’s behalf.

In a strange move, PAMADA chief Iqbal Shah came out with a statement in March saying “car prices are neither increased or lowered due to immediate impact of increasing or decreasing foreign exchange.”

“The impact of lowered foreign exchange today will have contribution to vehicles made after three to four months, as most of the inventory for production has been purchased already while some purchases are still in high seas,” he explained.

Iqbal said “the rupee appreciation against the dollar is unlikely to provide car buyers any price relief in near future as assemblers will take three to four months in passing on the impact.” He also claimed that “the rupee-dollar phenomenon will impact cars prices in three to four months.”

In what capacity Iqbal Shah gave auto industry’s point of view when some industry officials did not consider him as true spokesman of the industry, the car assemblers surprisingly started lowering the prices one by one. This time Iqbal Shah did not bother to issue any statement to the press as to why prices were lowered when he himself gave a timeframe of three to four months for price relief.

Indus Motor Company ((IMC) decreased prices by Rs 50,000-75,000 followed

by Rs 30,000-40,000 by Honda Atlas Cars and Rs 5,000 to up to Rs 100,000

by Pak Suzuki Motor Company Limited.

Niether the government nor the strong ar m of Mi nist ry of In du str i es (Engineering Development Board) have moved an inch to ascertain the reason of very low reduction in car prices by the assemblers as compared to eight per cent rupee’s rise against the greenback.

In March dollar was traded at Rs 9898.20 as compared to Rs 100 in April while it was at Rs 108-110 in inter bank market some two and half months back.

Buyers are surprised that the maker of Corolla had cut Rs 50,000 in XL and, GLI but in Liana of same engine power, the price was reduced by Rs 100,000.

Liana is fast heading towards its end from the production line as it was assembled for just two months out of eight months of the current fiscal year.

The PCMCL has already disclosed about Liana’s closure to its authorized dealers instead of m aking any offic ial announcement in the local media. It means that the company is trying to clear the built-up stocks at the plant or at the showrooms and then it will issue any statement about Liana in the press.

Besides, Pak Suzuki is also introducing Wagon R shortly.

It is also no surprise for cut in prices of XLI and Gli Corolla as the Indus Motor

www.automark.pk | April-2014 | Page 25

continued on next page

Monthly AutoMark International

Exclusive Article - continued

Many car assemblers also feel uneasy sitting with H.M. Shahzad in government related meetings on auto sector issues. Even in the past they boycotted the meetings in Islamabad after knowing that the Ministry of Industries had extended invitation to H.M. Shahzad.

Company is trying to get rid of the stocks as its new model is due by the end of this year.

PSMCL made a surprise move as people were expecting cut in bike prices but the company raised the prices by Rs 1,9005,000 from April 1. The prices of Honda bikes had also been unchanged since January this year. One of the leading assemblers of bike, whose localisation has crossed 90pc, has also ruled out any immediate decline in bike prices saying that it may take at least three to four months.

Chairman All Pakistan Motor Dealers Association (APMDA) H.M. Shahzad recalled that Pak Suzuki raised prices three times in 2013, four times in 2012 and six times each from 2008 to 2011.

From 2008 to 2013, the company jacked up prices by 52 per cent to 110pc.

He said the Indus Motor Company (IMC) increased prices by 56pc to 104pc from 2008 to 2013 with three times in 2013, two times in 2012, six times in 2011, five times in 2010, four times in 2009 and seven times in 2008. Honda Atlas increased car prices by 49pc to 175pc from 2008 to 2013 with three times in 2013, four times each from 2010 to 2012, five times in 2009 and four times in 2008.

Shahzad said the assemblers’ claim of higher localisation in vehicles does not justify here as rising prices reveal that

they are using currency fluctuation as main tool to raise prices.

He said that assemblers had also not shared eight to nine per cent gain of rupee against Japanese Yen from October 2013 to January 2014. Yen also lost its value against the rupee by around 13pc from January 2013 to May 2013.

He said it seems that the value of rupee against dollar is of no consequence when it comes to fixation of prices of cars as claimed by the assemblers. If the value of rupee is the determining factor, the prices of cars should have been reduced by at least six per cent. He said all the three companies have reduced their prices just notionally from 0.5 per cent to 2.5 per cent.

Take for example, the recent price reduction in Suzuki Mehran by Rs 5,000 which actually should have been reduced

by Rs 36,000. Then there is no consistency. Liana and Swift are priced almost same but Liana price has been reduced Rs 100,000 whereas Swift by only Rs 20,000.

He added that this all shows that it is just an exercise in marketing and has no bearing on the rupee value. Same is the case of Toyota and Honda whose prices were decreased by Rs 30,000 to Rs 70,000.

He said these assemblers have been raising their prices 4 to 5 times in a year taking the plea of rupee devaluation and

the prices have almost doubled in the last 4 to 5 years.

However, when the Government itself is playing with the distress of the public what can be expected from the car makers? The reduction of prices of petroleum products is an example as Rs 1.70 per litre cut in petrol is like throwing salt on bleeding wounds.

He conclu ded th at nieth er t he Government nor the car makers are at all serious in giving any relief to the public.......

Sindh Assembly passes Provincial Motor Vehicles (Amendment) Bill, 2014

A large number of public service vehicles are plying in very poor and unsafe conditions and the existing penalty for violation provided in the law is very low. In order to enhance the existing penalty and to implement the law in letter and sprit, it is expedient to amend the Provincial Motor Vehicles Ordinance, 1965 Sindh Assembly on Monday passed ‘The Provincial Motor Vehicles (Amendment) Bill, 2014’ unanimously; with opposition saying that strict implementation of the law is imperative to end traffic chaos especially in the metropolis.

The bill went through a number of amendments largely recommended by MQM, with suggestions to increase penalties to streamline traffic and improve road safety.

The bill replaced the Provincial Motor Vehicles Ordinance 1965, which seeks an increase in the penalties against violators of traffic rules. Opposition lawmakers from MQM urged th e government to facilitate the traffic constables with incentives like a share in challans.

www.automark.pk | April-2014 | Page 26

International Automotive - Update

Monthly AutoMark International

Ni Hao Chongqing!

Ford Opens New Plant in Chongqing Home of the new Focus • The USD 490 million (RMB 3.34 billion) investment increases Ford's passenger car capacity in China by one-third to 600,000 units, and underscores Ford’s aggressive expansion in the Asia Pacific and Africa region.

• The green, highly automated, 1-million-square-metre assembly plant begins production of Ford’s next-generation Ford Focus and is flexible enough to produce six different types of vehicles.

– The company that pioneered mass automobile production a century ago in Detroit, today opened one of the world's newest, most efficient and sustainable au tom ot ive a ssembl y pl ants i n Chongqing, China.

Ford Motor Company and its joint ve ntu r e Ch a ng a n For d Ma zd a Automobile (CFMA), today opened a new assembly plant, "CFMA Chongqing Assembly 2" or CQ2. Home of the allnew Ford Focus, CQ2 incorporates global industry best practices to efficiently and safely produce high qu a li ty veh i cl es w i th m i nim al environmental impact.

"This is a very special day," said Joe Hinrichs, president of Ford Asia Pacific and Africa. "It's not every day that you open a new assembly plant. This new plant represents a d ecades-long investment that will transform the lives of thousands of people. Following the vision of Henry Ford to produce vehicles where they are sold, the opportunities created by this expansion help create the ability for our production team to buy the vehicles they build. This expansion w ill benefit Chongqing and w ester n Ch ina for years to come."

CFMA is investing USD 490 million in CQ2, which will increase its production capacity in China by 150,000 units – to over 600,000 vehicle units overall. This is CFMA's second assembly plant in Chongqing and its third in China. With two assembly plants and engine and transmission plants already operating, Chongqing is now the largest global manufacturing location for Ford outside southeast Michigan.

The plant is ramping up production of the all new Ford Focus, and will have

produced more than 150 prototypes for testing as it prepares for the market launch in the second quarter. The all new Focus is built on Ford's global Cplatform, or mid-size vehicle chassis. At CQ2 and elsewhere, up to ten different kinds of vehicles will be produced on this platform, and the company will sell 2 million vehicles this year based on this platform.

"Ford is committed to China and a greener future," said Dave Schoch, chairman and CEO, Ford China. "This new plant and the all new Ford Focus produced here are the culmination of global best practices in manufacturing and vehicle development. This is the One Ford plan in action. It's about giving our customers what they most want and value, in a cost effective and sustainable way. The new Focus is an incredibly popular and successful global vehicle and we are delighted to introduce it to China, as the first of 15 new vehicles we are bringing here by 2015. This new flexible plant will help give us the capacity to realize our aggressive growth plans for the world's largest automotive market."

Schoch and Marin Burela, President of CFMA, welcomed Mayor Huang Qifan of Chongqing in opening the Chongqing Assembly Plant 2 at a ceremony in Chongqing’s Liangjiang New North economic development zone.

The production line at CQ2 is designed for maximum flexibility, enabling it to produce six different types of vehicles.

This allows the company to bring new vehicles to market faster, and test new vehi cles w hi le m aintaining full production speed.

Th e p aint sh op ut iliz es F ord ’s environmentally friendly, revolutionary

3-Wet high-solids paint process, improving paint quality, depth and durability, and significantly reducing volatile organic compounds, CO2 emissions and waste.

State-of-the-art automation The new 1-million-plus-square-metre assembly plant includes stamping, body, assembly, paint, trim and final assembly operations. The new plant is thoroughly equ i p ped w i th sta te-of- th e- a rt automation, showcasing Ford's besttechnology global manufacturing processes and systems, including one of the world's fastest stamping presses and 116 robots in the body shop for repeatable, consistent quality.

About Ford Motor Company Ford Motor Comp any, a global automotive industry leader based in Dear born, M ich ., manu fact ures or distributes automobiles across six continents.

With about 164,000 employees and about 70 plants worldw ide, th e company’s automotive brands include Ford and Lincoln.

The company provides financial services through Ford Motor Credit Company.

Ford's wholly owned subsidiaries, joint ventures and investment in China include Ford Motor (China) Limited, Ford Motor Research & Engineering (Nanjing) Co., Ltd., Ford Automotive Finance (China) Ltd., Changan Ford Mazda Automobile Co., Ltd., Changan Ford Mazda Automobile Co., Ltd. Nanjing Company, Changan Ford Mazda Engine Co., Ltd. and Jiangling Motors Co., Ltd.

www.automark.pk | April-2014 | Page 31

Production Figures - Statistics

Monthly AutoMark International

www.automark.pk | April-2014 | Page 32

Production Figures - Statistics

Monthly AutoMark International

www.automark.pk | April-2014 | Page 33

International Auto Industry - Update

Honda expected to earn the 3rd position in India Japanese car-maker Honda has been a renowned named in the Indian market.

The car-maker has been a prominent name in the local market for nearly a decade with interesting line-up of hatchbacks, SUV and sedans in the country. Currently Mahindra and Mahindra holds the third spot in terms of car sales in the country and with the steady rise in sales figures recorded by Honda, the Japanese car-maker is expected to take up the third position soon.

As per sales figures, Mahindra and Mahindra sells around 19000 units every month in the country. On the other hand, Honda has been growing steadily in the Indian market irrespective of slowdown being witnessed in the automobile market. Going with the current trend, industry experts have anticipated figures of about 18,000 – 20,000 Honda units in the Indian market thereby making it a tough contender for earning the third spot in the car market.

Looking back at the sales figures for Honda, the Japanese car-maker has sold around 15,700 units in January 2014 and about 14, 300 units in February

2014. Last year the car-maker saw a growth in sales post launch of Honda Amaze in Diesel version. The sales chart was set on fire with the launch of much awaited Honda City in a Diesel version.

Official statements from the company has not been released yet, but it is expected to be revealed soon to the Indian masses.

A while ago Honda has been seen testing the Jazz hatchback. The car is expected to be launched sometime in the year 2015. As per sources, the new engine in Jazz shall follow the Amaze sedan line, with two fuel options – 1.2 litre petrol and the new 1.5-litre diesel engine. The petrol engine generates about 86PS with 109Nm of torque, whereas its diesel counterpart generates about 100PS with 200Nm of torque. As per sources 90PS tuning mark for the diesel engine may work wonders for the Japanese carmaker, this is mainly done to extract better fuel efficiency from the engine and stand at a competitive platform with its competitors. It is expected that the car may retain the five-speed auto box found in petrol versionsf Amaze and Brio models....

Monthly AutoMark International

Mahindra & Mahindra, Honda Cars India and Tata Motors are looking to increase prices " We are actively contempla ting increasing the prices of our vehicles in April due to increase in input and operat ional costs," Mah indra & Mahindra Chief Executive (Automotive Division) Pravin Sh ah told PTI. The company hasn't decided by how much prices will be raised.

"We have not yet taken a final decision on the quantum and timing but this a matter we are seriously considering right now. It will happen for sure in April," Shah said.

Sources in Honda Cars India said the company is considering a hike in prices next month.

"The discussions are going on, there is a possibi lity," th e sour ce said .

Tata Motors said it may increase prices of passenger vehicles by 1 to 2 per cent.

Honda cars are priced between Rs 3.99 and Rs 24.36 lakh, while Mahindra passenger vehicles manufactured in the country retail between Rs 5.43 lakh and Rs 14.48 lakh (all prices ex-showroom Delhi).

Last month, Mahindra had reduced prices of its passenger vehicles by between Rs 13,000 and Rs 49,000, after the reduction of excise duty. Honda Cars India had also cut prices by as much as Rs 44,741.

Hyundai mulls fourth China assembly plant Hyundai Motor considering building a fourth car plant in China to meet local demand.

According to a Bloomberg Hyundai Motor statement, the automaker's chairman Chung Mong Koo sign an agreement on Thursday (27 March, 2014 ) w ith th e g overnm ent of Chongqing to study the possibility of locating a plant there. The city is the most likely site for the factory, the automaker added.

The report noted Hyundai faces rising competition in China, its largest market, as sales by Toyota and Nissan Motor local joint ventures have recovered from anti-Japanese boycotts touched off in 2012 by a territorial dispute with Japan.

Rivals includ ing Volkswagen and General Motors - both of which have several local car making JVs, also want

to make and sell more cars in China as economic growth and urbanisation drives d emand for new vehicles.

"To increase or at least keep its market share, the decision to build a new plant would have been inevitable for the company," Lee Sang Hyun, an analyst at NH Investment & Securities, was quoted as saying.

"Although China's auto market growth has slowed compared with a few years ago, it is still a rapidly growing market."

The fourth plant would have capacity of 300,000 cars a year, bringing Hyundai's Ch ina outpu t to 1.5 1m vehicles, according to the statement. Hyundai's three existing car plants are located in Beijing.

Its commercial vehicle business also has a new plant under construction in Sichuan.

The carmaker's annual sales in China passed 1m vehicles for the first time last year, according to Bloomberg data. In comparison, it sold 640,698 units in South Korea and 720,783 in the United States. In EU and EFTA markets, the carmaker's sales slipped 3% year on year to 422,930 vehicles in 2013, according to ACEA...

Ashok Leyland bags $50-million order from Zimbabwe Hinduja Group flagship company Ashok Leyland today said it has bagged an order worth $ 50 million (nearly Rs 300 crore) from the Zimbabwe government for the su pp ly of 670 vehicles.

"The company has bagged a contract from the Ministry of Tourism and Hospitality Industry, Government of Zimbabwe, for supply of 670 vehicles.

www.automark.pk | April-2014 | Page 34

International Auto Industry - Update

Bajaj Auto bike sales up marginally in in March Bajaj Auto today reported 1.33 per cent increase in motorcycle sales at 2,70,591 units in March 2014.

The company had sold 2,67,037 units in the corresponding month of previous year, Bajaj Auto Ltd (BAL) said in a statement.

BAL said exports were up 16.58 per cent during the month at 1,18,183 units compared to 1,01,374 units in March 2013.

In the commercial vehicles category, its sales stood at 33,739 units as against 34,194 units in the same month previous year, down 1.33 per cent per cent.

Total vehicle sales of the company last month stood at 3,04,330 units as compared to 3,01,231 units in the same month a year ago, up 1.33 per cent, the statement said. For the fiscal ended March 31, 2014, motorcycle sales were at 34,22,416 units as against 37,57,105 units in the previous fiscal, down 9 per cent, the company said.

Maruti Suzuki defends decision on Gujarat plant Maruti Suzuki has said the decision to transfer the proposed Gujarat plant to Suzuki was 'right' and would not impact its manufacturing activities even as the auto major is facing criticism from shareholders.

The country's largest car maker's latest assertion comes in the wake of seven m a j or fu n d h o u se s, w h o a r e shareholders, raising red flag over the p l a n n ed t r a n s f er of G u j a r a t manufacturing plant to Japanese parent Suzuki Motor Co. "We are convinced that what we are doing is the right thing. We are also answering anybody who h as any questions and doubts and we will continue to make efforts in that direction and that's all we can do," Maruti Suzuki India (MSI) Chairman R C Bhargava told PTI.

Monthly AutoMark International

Hero MotoCorp sales rise 12% in March The country's largest two-wheeler maker Hero MotoCorp today said total sales increased 11.9 per cent to 5,24,028 units in March.

It had sold 4,68,283 units in the same month last year, Hero MotoCorp said in a statement.

For the financial year ended March 31, the company posted sales of 62,45,895 units, a growth of 3 per cent over 201213, when the company sold 60,75,583 units.

"Our strong sales performance in FY14 is reflective of our new strategic approach that focuses on bringing revolutionary and game-changing technologies," Hero MotoCorp Senior Vice President (Marketing and Sales) Anil Dua said.

HMSI sales up 55% in March Two-wheeler manufacturer Honda Motorcycle & Scooter India (HMSI) today reported a 55 per cent growth in sales at 3,92,148 units for March, 2014.

The company's total sales stood at 2,52,787 units in the corresponding month of previous year.

Motorcycle sales registered a rise of 57 per cent to 1,90,091 units in March, 2014 from 1,20,796 units in the same month of previous year, HMSI said in a statement.

The company also reported an increase of 53 per cent in scooter sales at 2,02,057 units from 1,31,991 units in March, 2013, it added.

Infiniti to locally produce half the cars it sells in China

EPA fines motorcycle, RV importer for Clean Air Act violations

Nissan will begin assembling its luxury Infiniti brand in China at the end of the year, and plans to increase local production to more than 50,000 vehicles annually by 2018.

The company aims to design cars specifically for the Chinese market and manufacture them locally to help speed deliveries. It also plans to double its retail network for the Infiniti brand in the next three years in a bid to boost its market share from 1% now to 7-8%, the same level it enjoys in the U.S. Daniel Kirchert, managing director at Infiniti China, says there is a "huge opportunity" to expand share in the country's premium segment, where German trio Audi, BMW and MercedesBenz dominate with a combined 70% of the market...

American Lifan Industry Inc., an Ontario, Calif.-based importer of Chinese motorcycles, engines and recreational vehicles, will pay $630,000 in civil penalties to settle Clean Air Act violations, the U.S. Environmental Protection Agency announced March 27.

Also, American Lifan will post a $300,000-$500,000 bond to satisfy any potential future penalties involving importation of motorcycles, engines and RVs manufactured by China Lifan Industry (Group) Co. Ltd. in the 201416 m od el year s, th e EP A sa id.

The EPA said American Lifan imported and sold nearly 28,000 vehicles and engines made by China Lifan that did not comply with federal emissions limits under the Clean Air Act.

www.automark.pk | April-2014 | Page 35

By: Mohammad Shahzad S.A.E; D.M.P.

Monthly AutoMark International

The Hell…Under Your Car’s Hood!

Beat the Heat with the Tender Treat We all like to enjoy a hot summer on the lake or beach to cool us down during a heat wave. Our bodies can bear up to a certain temperatures before we run the risk of a high fever or a heat stroke which may cause serious damage to the organs in our body. The engine of a car also has a limit to high temperatures before it runs into a melting or seizedup stage. The cooling system is as necessary to the engine as sweating is to our bodies to get rid of the heat.

Your vehicle has an internal combustion engine. That means when air, fuel and fire (ignition) enters into the engine and create a blast in the cylinders, the temperature inside the engine can reach as high as 4500°F (2500°C). Now if you add outside temperature up to 50°C especially in the hot climatic zone of Pakistan, with the combinations, it will take only half that heat to melt iron and your engine would be a useless lump of metal in about 20 minutes. Boiling coolant out of the engine can burn your skin in seconds, or your car’s hood (bonnet) can reach to an extreme temperature – hot enough to warm-up a pizza or cook an egg omelette or to flip well-done burgers in a matter of seconds. In fact, the cooling system on a car driving down the highway dissipates enough hot air to heat up a big bungalow in the winter.

Purpose of the Cooling System The cooling system is your engine’s life saver. The purpose of the cooling system is to do three things. The first is to maintain the highest and most efficient

operating temperature within the engine. The second is to remove excess heat from the engine. The third is to bring the engine up to an operating temperature as quickly as possible. If the engine is not at the highest operating temperature, it will not run efficiently.

Fuel mileage will decrease and wear on the engine components will increase. It also support automatic transmission as oil cooler and provides cabin heating for comfortable driving in the winter season.

Heat Removal Process Although engines have improved a lot they are still not very efficient when it comes to turning chemical energy into mechanical power. Within the gasoline or diesel engine, energy from the fuel is

converted to power for moving the vehicle. However, not all energy is converted to power. When 100% of the energy is going into the engine, about 25% is used to push the vehicle. About 9% of the heat generated by the fuel is lost through radiation and 33% is sent out through the exhaust system. The remaining 33% must be removed by the cooling system. If this is done correctly, the temperature of the vehicle will be at its highest efficiency. The engine runs best when its coolant is about 200°F (93°C), same as you will feel active when your body temperature is about 37°C or 98.6°F. If the engine temperature is too high, various problems will occur.

These include: 1. Overheating of lubricating oil – This will result in the lubricating oil breaking down.

2. Overheating of the parts – This may cause loss of strength of the metal.

3. Excessive stresses between engine parts – This may cause increases in friction, which may cause excessive wear.

If the engine temperature is too low, various problems will occur. These include: 1.Po o re r fu e l mi le age –T he combustion process will be less efficient.

2.Increases in carbon build up – As the fuel enters the engine, it will condense and cause excessive build up on the intake valves.

3.Increase in Varnish and sludge within the lubrication system –Cooler engines enhance the build-up

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Monthly AutoMark International

Exclusive Article - continued of sludge and varnish.

4.Loss of power. If the combustion process is less efficient, the power output will be reduced and fuel economy will suffer.

5. Fuel not being burned completely –This will cause fuel to dilute the oil and cause excessive engine wear.

to be controlled so that it allows the engi ne to ma intai n a consta nt temperature. Front-wheel drive cars have electric fans because the engine is usually mounted transversely, meaning the output of the engine points toward the side of the car. Rear-wheel drive cars with longitudinal engines usually have engine-driven cooling fans.

How Cooling Systems Work

Overcoming Overheating

The water pump sends the fluid into the engine block, where it makes its way through passages in the engine around the cylinders. Then it returns through the cylinder head of the engine. The thermostat is located where the fluid leaves the engine. The plumbing around the thermostat sends the fluid back to the pump directly if the thermostat is closed. If it is open, the fluid goes through the radiator first and then back to the pump.

There is also a separate circuit for the heating system. This circuit takes fluid from the cylinder head and passes it through a heater core and then back to the pump.

On cars with automatic transmissions, there is a separate circuit for cooling the transmission fluid built into the radiator.

The oil from the transmission is pumped by the transmission through a second heat exchanger inside the radiator.

The main components of the modern cooling system are:

If your engine coolant temperature gauge indicates very high or engine coolant warning light comes on dash, this is sure indication that your engine is overheating. You can take first step to turn off A/C (if in use) open all windows and turn the heater with the fan at full blast. This will dissipate the engine heat through heater and may dr op temperature, you may feel discomfort in summer but it may save your engine life from a serious damage.

However if you experience a loss of power, or if you hear a loud knocking or pining noise with the steam under the hood all these symptoms are sure indication that engine has probably overheated.

Water Pump The water pump is a simple centrifugal pump driven by a belt connected to the crankshaft of the engine. The pump circulates fluid whenever the engine is running. The fluid leaving the pump flows first through the engine block and cylinder head, then into the radiator and finally back to the pump.

Radiator A radiator is a type of heat exchanger.

It is designed to transfer heat from the hot coolant that flows through it to the air, blown th rough it by the fan.

Radiators usually have a tank on each side or on top and bottom, and inside the tank is a transmission cooler. The transmission cooler is like a radiator within a radiator, except instead of exchanging heat with the air, the oil exchanges heat with the coolant in the radiator.

Radiator Cap

The radiator cap actually increases the boiling point of your coolant by about 45° F (25° C). How does this simple cap do this? The same way a pressure cooker increases the boiling temperature of water for fast cooking. Never add coolant through this cap when hot, always add into Reservoir tank to avoid injury.

Reservoir Tank This tank or bottle is located near the radiator and connected with a tube. The purpose of this coolant recovery system is to store the overflow coolant and return to radiator when required.

Fluid/Coolant/Antifreeze Engine operates in a wide variety of temperatures, from way below freezing50° C to well over 100° F (38° C). So whatever fluid is used to cool the engine has to have a very low freezing point, a high boiling point, and it has to have the capacity to hold a lot of heat.

Water is one of the most effective fluids for holding heat, but water freezes at very low temperature and boil over at very high a temperature to be used in car engines. The fluid that most cars use is a mixture of water and ethylene glycol (C2H6O2), also known as antifreeze. By adding ethylene glycol to water, the boiling and freezing points are improved significantly.

Thermostat Just as an athlete needs to warm up when they begin to exercise, your car's engine needs to warm up when it is first started. The thermostat is almost always placed between the engine and the radiator as the coolant flows. The thermostat's main job is to allow the engine to heat up quickly, and then to keep t he engi ne a t a consta nt temperature.

Fan Like the thermostat, the cooling fan has

Beat the heat with the following treat • Pull safely off the road, stop the v e h i c l e an d t u r n o n y o u r emer gency flasher s. Put the transmission in “P” (automatic) or neutral (manual) and apply the parking brake.

• If coolant or stream is boiling out of the radiator or reservoir, stop the engine. Wait until the steam subsides before opening the hood.

If there is no coolant boiling over or steam, leave the engine running and make sure the cooling fan is operating. If it is not turn-off the ignition.

To help avoid personal injury, keep the hood closed until there is no steam.

Escaping steam or coolant is a sign of very high temperature.

• Visually check to see if the engine drive belt (Water pump belt) is broken or loose. Look for obvious coolant external leaks from the radiator, hoses, and under the vehicle. However, note that water draining from the A/C is normal if it has been used.

When the engine is running, keep hands and clothing away from the moving fan

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Exclusive Article - continued and engine drive belts • If the engine drive belt is broken or the coolant is leaking, stop the engine immediately and call for breakdown assistanc e to tow to w orksh op.

• If the engine drive belt is O.K. and there are no obvious leaks, check the coolant reservoir. If it is low or dry, add coolant (you may add water just to get to the nearest fuel station to replace with proper coolant) to the reservoir while engine is running. Fill about half full.

Do not attempt to remove the radiator cap when the engine and radiator are hot. Serious injury could result from scalding hot fluid and steam blown out under pressure.

After the engine coolant temperature has cooled to normal, again check the coolant level in th e reservoir. If necessary, bring it up to half full again.

Serious coolant loose indicates leak in the system. While you are checking under the hood make sure the engine has enough lubrication oil, low or no engine oil may cause overheating. It is recommended to keep an extra jug of water or coolant and oil for such emergencies. Avoid driving and call for breakdown assistance and tow your vehicle to a nearest dealer/workshop.

Common Problems Let's look at the common problems cars h av e w ith th e c ooling syst em.

• LOSS OF COOLANT OR WATER IN THE SYSTEM DUE TO LEAK OR EXCESSIVE EVAPORATION is the prime cause of overheating.

• Broken hose: Hoses wear out and can leak. Once the coolant has left the system it can no longer cool the engine and it overheats.

• Broken water pump belt: The water pump is driven by the engine through a belt. If the belt breaks, the water pump can not turn and coolant will not be circulated through the engine.

This will also lead to engine overheating.

• Electric fan failed: Most cars are equipped with an electrical fan mounted behind the radiator to draw air for cooling purpose, check to see, if fuse or loose connections is causing fan to stop working.

• Faulty radiator cap: The radiator cap is designed to hold a certain pressure in the coolant system. Most caps hold 8 - 15 PSI. This pressure raises the point in which the coolant will boil and maintains a stable system. If your cap does not hold pressure, then the engine could overheat on hot days since the

system never becomes pressurized.

• Water pump failure: Most commonly you will hear a screeching noise and will be able to see coolant leaking from the front of the pump or under the car. Early signs are small spots of coolant under the car after being parked overnight and a strong coolant odour while driving.

• Head gasket leaked: Is there a large amount of white smoke flowing out of your exhaust? That could cause by the leaky head gasket. The head gasket seals the cylinder head to the engine block and also seals the coolant passages.

When this gasket fails coolant can enter the cylinder and it will be turned to vapour as the engine fires. Head gaskets most often fail after the engine has experienced an overheating situation.

When super hot, the cylinder head can warp and allow the gasket to fail.

Preventive Maintenance Over heating is the major cause of the engine failure, it’s like having high fever.

The engine cannot go very long without being cooled. If the cooling system fails for any reason, the engine will soon reach a temperature where the pistons will actually weld themselves to the cylinder wall. Once this happens, you throw the engine out and replace it with a new one.

Since the cooling system controls the temperature of the engine, it is highly important that the system be regularly inspected and serviced.

• Keeps an eye on a temperature gauge or warning light while driving.

• Ch ec k all be lts and ho ses regularly. Check coolant strength for winter driving. Always top up with

antifreeze not plain water. (at oil change is a good time) • Look out for coolant leaks underneath the car, they could be signs of trouble to come, except A/C drain( if it has been use) • Check and clean radiator air fins for free air flow if blocked.

• Change your coolant every 2 - 3 years or depending on your car manufacturer’s recommendations.

• Inspect your rad iator cap for deterioration of the rubber seal. Replace if you think it is worn. It’s a much cheaper solution.

• Have your coolant system flushed every 2-3 years. It gets all the corrosion which h as bu ilt u p out of the system.

Remember, engine overheating is the major cause of your car breakdown on the road especially in the hot summer in most parts of Pakistan. Proper cooling system maintenance not only saves you money but it also keeps you safe from unexpected breakdowns. DRIVE SAFE and have a fun summer… Safety always starts with you!

This exclusive article on Tires has been written by Mohammad Shahzad S.A.E., D.M.P (Automotive Engineer/Doctor of Motors) He is a Senior Group Manager for Customer Management Operations with The Brimell Group, Brimell Toyota and Brimell Scion in Toronto, Canada.

Free advice for Automark readers; please do not hesitate to contact him at shah@brimelltoyota.com or automarkcanada@gmail.com

www.automark.pk | April-2014 | Page 43

Transportation Sector - Update

Monthly AutoMark International

Rapid transit system to help ease traffic congestion No mega city of the world can expand, flourish, prosper and sustain without a suitable transport system. We are all witness to the well-organised transport system of the developed cities like London and New York and other cosmopolitan cities, which are used by millions of people daily for their day-to-day work. Governments in these countries know the significance of mass transit system and therefore invest heavily in this sector for easing transportation of the people.

Groundbreaking ceremony of Metro Bus system in Rawalpindi-Islamabad has been performed by the Prime Minister of Pakistan Muhammad Nawaz Sharif on the eve of Pakistan Day on 23 March, 2014. Total length of the track will be 22.5 Kilometres and completion time of the project is 10 months.

An efficient transport system, which faci lita tes tim ely m ovement of thousands of people to their workplaces in a hassle free, smooth and honourable manner can rightly be considered as the backbone of the economy of a nation.

No mega city of the world can expand, flourish, prosper and sustain without a suitable transport system. We are all witness to the well-organised transport system of the developed cities like London and New York and other cosmopolitan cities, which are used by millions of people daily for their day-today work. Governments in th ese countries know the significance of mass transit system and therefore invest heavily in this sector for easing transportation of the people.

Realising the importance of mass transit system, Government of the Punjab, under the stewardship of Chief Minister Muhammad Shahbaz Sharif, kicked off work on the first ever bus rapid transit system of Pakistan in Lahore , the heart of Pakistan, in February 2012. At a cost of Rs29.8 billion, the project was executed in a record time of 11 months, the shortest possible duration for executing such projects. The system, later named as Metro Bus System, is benefiting 150,000 people daily in Lahore. Encouraged by the success of the system in the provincial metropolis,

the Punjab Government has decided to spread the fruits of progress to other cities of the province as well.

Rawalpindi and Islamabad are commonly called twin cities because of the location, geographical proximity, climate and other socioeconomic and historical reasons. Heavy influx of people is witnessed every morning in these two cities as thousands of people daily travel between the two cities for jobs, education, business and for various other reasons.

Since its very foundation, Islamabad, the capital of Pakistan, has attracted people from all over Pakistan, making it one of the most cosmopolitan and urbanized cities of Pakistan and centre of economic and service activities which attract people from all over the country.

The population of the city has grown

from 100,000 in 1961 to 1.30 million in 2012, making it the ninth largest city in the country. Adjacent to the southern edge of Islamabad lies the city of Rawalpindi. Being Headquarter of Rawalpindi Division and a close neighbou r of the federal capital, Islamabad, the population of Rawalpindi City has rapidly increased over the years.

Murree Road is one of the busiest and most preferred link between the twin cities due to its shorter length and direct approach. During the last few years there has been an unprecedented increase in vehicular traffic in the city, especially along Murree Road, resulting in severe traffic congestion on this route. This congestion causes excessive delays, environmental pollution and associated socio-economic problems for the daily commuters. Public transport is one of the major contributors in the traffic mix and the quality of service being provided is of poor standard.

The greater Islamabad — Rawalpindi Metropolitan Area is the third largest

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Transportation Sector - Update

Monthly AutoMark International

The project will start from near Flashman Hotel on Mall Road Rawalpindi and follow the existing Murree Road upto Faizabad. It will then turn left into the federal territory and follow IJ Principal Road upto 9th Avenue. Thereafter, it will turn right and follow the 9th Avenue in Islamabad then turn right on Jinnah Avenue upto the end of Blue Area.

From Blue Area a connection to Secretariat stop will be provided through the open space behind parade ground. It will cross the Constitution Avenue and another couple of main roads through underpasses. However, the remaining length of this section is also designed on a lower level in an open Trench section keeping in view various security constraints. conu rbation in Pa kistan with a pop ulat ion of over 4.5 m illion inhabitants. The twin cities of Islamabad and Rawalpindi are growing at a rate of more than 4 percent per annum, indicating a higher than national growth due to significant migration. With present growth trends it is expected that the population would increase to 7.0 million in twenty years’ time. Since both cities have grown into each other, significant amount of commuting takes place between the two cities. Currently private transport is the major mean of mobility between two cities comprising of Mazda, Toyota Hiace, and Suzuki vans plying on various routes within and between the two cities. There is no organised urban bus transport service operating in the city and between the twin cities. Level of service offered by the minib uses is far below any acceptable standard. Traffic volumes of over 210,000 vehicles ply on three major corridors connecting both the cities carrying around 525,000 passengers. It is estimated that public transport demand of around 153,000 passengers is available on daily basis between the two cities. Interestingly this passenger demand is concentrated around a corridor, which is of high density and strategically located to provide for reasonable patronage for a rapid transit system.

Based on studies conducted by the Government of Punjab and Capital Development Authority, the two governments (federal & provincial) joined hands to launch a Metro Bus project to connect the twin cities and alleviate the traffic congestion on this corridor.

In a meeting held in Lahore on January 19, 2014, co-chaired by the prime minister and the chief minister of Punjab, it was decided that the project shall be funded on 50:50 sharing basis by th e Fed era l Gov ernm ent & Government of the Punjab. As the Punjab Government h as already completed successfully a similar Metro

Bus project in Lahore, prime minister decided that the Provincial Government will execute this project through Rawalpindi Development Authority (RDA) as the single executing agency for both parts of the project.

It will work in close coordination with the Capital Development Authority (CDA) for the Islamabad Part of the project. Punjab Metrobus Authority (PMA) will control the operation & maintenance of the project after its completion. PMA will also coordinate with CDA at O&M stage of the project.

The project will start from near Flash man Hotel on M all Roa d Rawalpindi and follow the existing Murree Road upto Faizabad. It will then turn left into the federal territory and follow IJ Principal Road upto 9th Avenue. Thereafter, it will turn right and follow the 9th Avenue in Islamabad then turn right on Jinnah Avenue upto the end of Blue Area. From Blue Area a connection to Secretariat stop will be provided through the open space behind parade ground. It will cross the Constitution Avenue and another couple of main roads through underpasses.

However, the remaining length of this section is also designed on a lower level in an open Trench section keeping in view various security constraints.

Total length of the track will be 22.5

Kilometers, which will be constructed at a cost of Rs44 billion. The length of 8.6 km of Metro Bus corridor in Rawalpindi area shall be elevated structure whereas about 14 km in Islamabad shall be at-grade, but made signal-free by constructing grade separations at various intersections. Ten (10) stations in the Rawalpindi Part and fourteen (14) in the Islamabad Part are provided along the corridor. Functional elements at the stations include ticketing booths, concourse level passenger transfer, escalators, platform screen doors turnstiles for automatic fare collection and all other amenities for passenger convenience. A central ITS control room is also included in the project to control the whole operation of the Metro Bus system. Initially the provision of a 10 lane Underpass (2 Lanes for Metro Bus and 8 Lanes for mix traffic) along the 9th Avenue was proposed at Peshawar Morr intersection.

Later on, in view of the traffic issues at Peshawar Mor intersection, ongoing Widening/Rehabilitation of Kashmir Highway & its link with new Islamabad Airport, it was decided to dovetail the Metro Bus corridor in the interchange already designed by CDA, which will cost Rs6.75 billion. The same will be simultaneously executed with Metro Bus Service Project.....

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Monthly AutoMark International

Automotive Sector - Review

Maker of Revo talks about its re-launch When the country’s premier expressed a desire for a ‘made in Pakistan’ vehicle at the recently-held auto show in Lahore, he had probably forgotten about Adam Revo — Pakistan’s first locally produced car that made an entry nine years ago.

Among the attentive audience was Feroz Khan, the maker of Revo, who was astonished at the silence of the industry giants present at the Lahore Expo Centre where Prime Minister Nawaz Sharif made the

remark.

“I felt hurt when none of my life-long friends stood up and informed the prime minister that Pakistan had already succeeded in producing a local car in 2005,” Khan told The Express Tribune in an interview. “Add to this the maker of that car was sitting right before him in the audience.”

Adam Motors, the makers of Revo, launched the car on April 18, 2005 with high hopes. However, the company sold just 600 units before it broke down owing to a lack of working capital.

Former prime minister Shaukat Aziz inaugurated Revo’s plant in 2003, located a few kilometres from Karachi, owing to which most units were sold in the city.

According to Khan, Aziz promised him to buy his car for the government as it was the cheapest in the country. The government could have easily bought

5,000-10,000 cars a year but it never fulfilled its promise and that, according to Khan, was one of the major reasons why the project collapsed.

When launched, Revo’s price was Rs269,000 — cheaper by Rs46,000 when compared to the more popular choice of Suzuki Mehran.

Asked whether he could re-launch Revo, Khan reluctantly said that it could “within 15 months after studying the curr ent need s of the industry” .

Khan’s reluctance to take another risk is understandable. He still owes Rs230 million despite paying a large part of the Rs1-billion debt he accumulated in launching Revo.

If Adam Motor re-launches Revo, then its price would be around Rs600,000 owing to th e depreciation of the Pakistani rupee since 2005, Khan said.

The current price of Suzuki Mehran is Rs686,000.

“This is a better time to produce a local car as prices have gone up way too high owing to the expensive imported parts,” said Khan. “But I must say that I am fearful in re-launching Revo because of this country’s politics.”

Despite difficulty in procuring its spare parts, one can still find Revo on roads after all this time.

Those who still use the car say some of the attractive characteristics of Revo are its strong body and spacious interior.

Khan believes Pakistan can achieve more milestones in the future because of the position where its auto industry stands today. However, for that to happen, the local industry needs to work hard especially if it wants to prepare itself for regional competition.

Trade with India The Pakistan Automotive Manufacturers Association (PAMA) and Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) needs to work collaboratively if they want to prepare themselves for trade with India, otherwise both would face difficulties, said Khan.

Pakistan’s auto industry also needs to study non-tariff barriers (NTBs) in India and then apply the same if they fail in exporting their parts to India because of them, he added.

“Pakistan can export auto parts to India bu t th en it needs to upgrade its standard s su ch as environment, pollution, vehicle inspection etc,” he stressed.

Courtesy: The Express Tribune

www.automark.pk | April-2014 | Page 44

Cooperate Event - Update

Super Star Motorcycle Model-2014 Luanching Ceremony Karachi and Hyderabad (Glimpses)

www.automark.pk | April-2014 | Page 45

Monthly AutoMark International

Crown Group achievement - PR

Mr. Farhan Hanif, CEO- Crown Group awarded for Jinnah Gold Medal Award

On behalf of Mr. Farhan Hanif (CEO-Crown Group), Ms. Sabica Siddiqui (Network Control Manager at Crown Group has received award from Shoaib Ahmed Siddiqui, Commissioner Karachi

T o recognize th e effort tow ards humanity, Mr. Farhan Hanif the Crown Group CEO, honoured for Jinnah Gold Medal Award. He was selected for this honourable award for his outstanding achievements in the fields of welfare, empowerment and struggle for the betterment in society. The award ceremony held on 28, March 2014 at Commissioner Office, Karachi and it was conducted by Royal Institute of Leadership & Management Sciences.

T h is pr est ig io us aw ar d i s th e

Participants in Jinnah Gold Medal Award Ceremony held on March 28, 2014 at Commissioner Office in Karachi

acknowledgement on remarkable contribution of Mr. Farhan Hanif, to launch Centralized Blood Center in Indus Hospital, Karachi which is Pakistan’s first blood center providing international quality screened blood to the hospitals all over the city since all his contribution in that project was only for charity.

The Chief Guest, honourable Shoaib Ahmed Siddiqui, Commissioner Karachi in his speech highly appreciated the efforts of awardees for their dedication

and contribution for humanity. He said they are source of inspiration for every individual especially for youth because they truly follow the vision of Quaid Azam and served the nation. He urged the youth to work for Pakistan progress and prosperity of the people. In occasion, Mr. Anjum Nisar , former President BMG, also congratulated the awardees and expressed the hope that other people would also take inspiration from their examples.

Issued by:

Crown Group participated in Pakistan Auto Show PAPS-2014, to showcase its reliable auto spare parts at international level Crown Group participated in Pakistan Auto Show (PAPS)-2014 as Silver Sponsor , organized by Association of Automotive Parts & Accessories Manufacturers (PAAPAM) was held from 6th to 8th March 2014 at Lahore international expo centre.

Crown group participated in this event with an objective to display the entire range of local manufactured quality products under one roof for the assessment of international investors and buyers. PAAPAM regularly organize this auto exhibition in Pakistan on annual basis-PR

www.automark.pk | April-2014 | Page 46

Car / Light Vehicle Price List This space available for Advertisement SUZUKI Model Model MEHRAN VX 800cc Euro II MEHRAN VXR 800cc Euro II SUZUKI SWIFT 1.3L DX SUZUKI SWIFT 1.3L DLX SUZUKI SWIFT 1.3L Automatic CULTUS EFI VXR Euro II LIANA 1.3L RXI MT PETROL LIANA 1.3L RXI MT (CNG) BOLAN VAN VX Petrol Euro II SUZUKI VAN CARGO Euro II APV 1.5L GLX MT (Petrol) APV 1.5L GLX MT (CNG) JIMNY CBU JL SX MT JIMNY CBU JL DX MT

HONDA Price Price Rs. 620,000 Rs. 678,000 Rs. 1,221,000 Rs. 1,282,000 Rs. 1,418,000 Rs. 1,033,000 Rs. 1,365,000 Rs. 1,444,000 Rs. 695,000 Rs. 666,000 Rs. 2,418,000

Rs. 2,142,000 Rs. 2,293,000

PM Auto Industries (Pvt) Ltd. Model Faw Truck Super 3 Ton (3200cc) Faw Truck Prime 2 Ton (2600cc)

Price Rs. 1,260,000 Rs. 1,034,000

Sokon - Mini Truck (1050cc) DFSK - Mini Truck 2700MM Deck DFSK - Mini Truck 2500MM Deck DFSK - Mini Truck (Double Cabin-AC) 1400MM Deck Introductory Price DFSK - Mini Truck (Double Cabin Non-AC) 1400MM Deck Introductory Price

Rs. 763,000 Rs. 731,000 Rs. 950,000

Honda Honda Honda Honda Honda Honda Honda Honda Honda Honda

Model Aspire Manual Aspire Prosmatec City Manual 1300cc City Prosmatec 1300cc HYUNDAI Civic VTI Manual 1800cc Civic VTI Manual SR (Oriel) Civic VTI Prosmatec 1800cc Civic VTI Prosmatec SR (Oriel) CR-Z Sports Hybird Manual CR-Z Sports Hybird Automatic

TOYOTA COROLLA Model XLI VVT-i 1.3 M/T 1299cc Petrol XLI VVT-i LE 1.3 M/T 1299cc Petrol GLI VVT-i 1.3 M/T 1299cc Petrol GLI VVT-i 1299cc LE 2.OD STD 2000cc ALTIS 1.6L Dual VVT-i M/T ALTIS 1.6L Dual VVT-i MT SUNROOF ALTIS 1.6L Dual VVT-i AT ALTIS 1.6L Dual VVT-i AT SUNROOF Toyota Avanza (Up Specfication) Hiace Commuter STD 3.0L Diesel Hiace Commuter STD 2.7L - GASLOLINE Sportivo, 1600cc M/T Sportivo, 1600cc A/T Fortuner 2700cc petrol

Rs. 900,000

Sokon - MPV 11 Seater (1300cc) DFSK - MPV 11 Seater (Without AC) Rs. 1,034,000 Rs. 1,084,000 11 Seater (Dual AC)

Rs. 938,000

Sokon - Cargo Van 1050cc DFSK

Rs. 840,000 Rs. 977,000 Rs. 740,000 Rs. 685,000

Tractor Euro Ford 85 HP Tractor Euro Ford 60 HP Tractor Euro Ford 50 HP Price List - Ex Factory (Hyderabad)

Rs. 1,859,500

Hilux Pickup 4x4 E

Rs. 1,145,000

Dual AC - Power Steering+ Power Window

Price 1,542,500 1,557,500 1,682,500 1,712,500 1,855,800 1,912,500 2,007,500 2,012,500 2,102,500 2,575,000 3,433,000 3,433,500 2,109,000 2,217,500 5,748,500

Price

Brand New Toyota Hilux Pickup, 4x2, 2500cc Single Cabin, White only, Hilux STD

DAIHATSU

Sokon - MPV 07 Seater (1050cc) DFSK Without AC Rs. 817,000 Rs. 887,000 With Dual AC Dual AC - Power Steering Rs. 928,000

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Hilux Pickup 4x2 sc Model

11 Seater (Dual AC-Power Steering) Rs. 1,134,000 11 Seater (Dual AC - Power Price Model Steering +Power Window)

Price Rs. 1,672,000 Rs. 1,814,000 Rs. 1,522,000 Rs. 1,663,000 Rs. 2,035,000 Rs. 2,267,000 Rs. 2,156,000 Rs. 2,388,000 Rs. 3,286,000 Rs. 3,366,000

Model

Price

Toyota HILUX 2494cc, Diesel Turbo Charger Common Rail Engine, 4x4 Double Cabin - Standard Model

TOYOTA VIGO

DAIHATSU

Model Model

Price Price

Rs. 3,109,500

AL-HAJ FAW MOTORS Model

Vigo Champ M/T Rs. 3,423,500 FAW Carrier (WHITE ,BLACK,STRONG BLUE & SILVER) FAW X-PV Std Vigo Champ A/T Rs. 3,623,500 FAW X-PV A/c Sirius S80 (WHITE ,BLACK,STRONG BLUE & SILVER)

Price Rs. Rs. Rs. Rs.

734,000 834,000 880,000 1699,000

Price updated April- 2014

MADE IN PAKISTAN MOTORCYCLES RETAIL PRICE LIST

70cc Motorcycle Sr./ No. 1.

2.

3.

4.

5.

6.

7.

Product & Model Name Dhoom YD-70 Hero RF-70 Hero RF-70 Plus Honda CD-70 Honda CD Dream Hi-Speed SR-70 Ravi Premium R1

Retail Price Rs. 50,400/= Rs. 46,000/= Rs. 47,000/= Rs. 68,500/= Rs. 72,500/= Rs. 43,000/= Rs. 46,950/=

125cc Motorcycle No. Brand & Model Name 1. Super Star SS-125 2. Super Star SS-125 DLX 3. Honda CG-125 std Euro II 4. Honda CG-125 DX 5. Ravi Storm 125 Model 2014 6. YD Sports 125cc

Retail Price Rs. 59,000/= Rs. 67,000/= Rs. 99,000/= Rs. 119,000/= Rs. 112,000/= Rs. 10,6000/=

Suzuki Motorcycle (Heavy Bikes) Sr./ No. 1.

2.

3.

Product & Model Name Inazuma GW 250 Intruder VZ800 Hayasuba GSX1300

Retail Price Rs. 725,000/= Rs. 1,600,000/= Rs. 2,500,000/=

Sitara Auto Impex

Sr./ No. 8.

9.

10.

11.

12.

13.

14.

Product & Model Name Ravi Hamsafar-70 Sitara GT-70 Super Star SS-70 Super Power SP-70 Super Power Delux Unique UD-70 Bionic AS-70

Retail Price Rs. 45,450/= Rs. 40,000/= Rs. 44,000/= Rs. 44,700/= Rs. 48,200/= Rs. 44,000/= Rs. 44,500/=

100cc Motorcycle No. 1.

2.

3.

4.

5.

Brand &Model Name Honda Pridor Super Star SS-100 Super Power SP-100 Yamaha YD100 Mini Yamaha Junoon 100cc

Retail Price Rs. 84,000/= Rs. 57,000/= Rs. 60,000/= Rs. 65,500/= Rs. 79,300/=

Suzuki Motorcycle Sr./ No. 1.

2.

3.

4.

5.

Product & Model Name SD110 Sprinter ECO SD110 Sprinter ECO Del SD110 Raider GS-150 Euro-II GD 110 Euro-II

Retail Price Rs. 88,400/= Rs. 83,400/= Rs. 96,000/= Rs. 119,500/= Rs. 109,900/=

website:www.motorcycleexport.com email: sitara786@hotmail.com Price update: April-2014

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