Automark July 2010 by Mustafa Hanif

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MONT HLY

The Magazine for Pakistan Au tomotive Sector

July 2010 Vol 3, Issue 7 Editor : M. Hanif Memon Sub Editor : Dr. Raja Irfan Sabir Contribution Writers : Mohammad Owais Samiullah Khan Shahzad Tabish

Advisor : J. Pereira Abdul Majeed Sheikh Circulation Manager : Abdul Khaliq Designed By : Saleem Shahzad

Postal Address Active Communications D-68, Block-9, Clifton,Karachi Visit us: www.pak-auto.com E-mail: active@pak-auto.com, automarkpk@gmail.com Tel/Fax : 021-2218526 Mobile: 0321-2203815

Editorial A new formula for gas pricing ! A new gas pricing mechanism is in the offing, according to a media report: the average of the considerable divergence between the local cost of extracting gas, estimated at 3 to 4 dollars per MMBTU, and imported gas, ranging from between 13 to 17 dollars per MMBTU, would determine the local price. Pakistan is expected to import ever increasing quantity of gas to meet its domestic needs as local gas fields become depleted. As has been recently reported, Pakistan is in the process of importing large quantities of gas to meet its gas shortfall, including the agreed price on imports through the yet to be laid IranPakistan gas pipeline, as well as the Turkmenistan, Afghanistan, Pakistan-India proposed gas pipeline. Thus, to avoid shocks to Pakistani consumers in the future, domestic as well as industrial, the new pricing mechanism must be adopted as soon as it appears to be appropriate. Given the divergent price statistics between the local and imported gas, the average of the two prices would imply at least a doubling of the local price. The question is would the public accept it? In the present context, where economic activity remains a victim to recession - be it attributable to a global recession or our continued energy crisis, or indeed the high cost of borrowing - the fact remains that a rate-rise, of such a magnitude, is hardly going to go down well with the public. In other words, the government would have to stagger the rate-rise to bring it to the average of the two prices and the sooner it begins this process, the more palatable it would be for the public.

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CONTENTS The Monthly Magazine for Pakistan Automotive Sector

Your trust is our success Budget 2010-2011 remains quiet on two wheeler industry Exclusive Article

09-10

“All is well” for car makers so far Exclusive Article

11 -12

Launching ceremony of Daewoo Buses across Pakistan

13-14

Hinopak - Corporate Eevents

15-16

Pakistan enters export market of CNG kits

Doining Business in Pakistan World bank report

22-23

Chinese bikes making fast inroads in local market

Car makers fail to persuade minister to do their job

CNG sector gradually falling into decay

Used car prices update in July

Local assembled car price list

Distributor Appointment Ceremony by Pakistan Lubricants (Pvt) Ltd.

Byco launches new brand identity

The Future of Fuel ! Is the Smallest Molecule Exclusive Article by Shahzad Tabish Energy Efficient Device

44-45

Shell Eco Marathon in Malaysia Exclusive Report by Automark with latest pictures

48-49

Motorcycle price list

50-51

visit: www.pak-auto.com

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by Mohammad Owais Khan

Exculisive article on motorcycle sector

Budget 2010-2011 Remains quiet on two wheeler industry Record bike sales in 2009-2010 owing to good crop of various commodities that triggered buying in rural areas The two-wheeler segment has excelled with other auto sector in terms of new record sales in 2009-2010 by crossing one million units as compared to last financial year. According to vice chairman Association of Pakistan Motorcycle Assemblers (APMA), Mohammad Sabir Shaikh the sale figures of 2009-2010 including Japanese and Chinese bike makers is around 1.3 million units as compared to 850,0 00 uni ts in t he las t fis cal. This is a record sale of bikes in Pakistan thanks to the arrival of low cost Chinese bikes that has changed the market scenario and provided a cheap option to the consumers to ow n a bike. Previously, Japanese bike makers had enjoyed a monopoly in this segment with only three assemblers but the main dominance both on the roads and at the concerned Ministry were enjoyed by mak ers of Honda CD- 70c c bikes. Figure s of Pak is ta n Automotive Manufacturers Association (PAMA) are different from APMA as most of the Chinese bike makers are members of APMA. However, slowly some Chinese bike mak ers have been becoming members of PAMA in the last one year. Irrespective of the fact that the Japanese bikes are very costly but they made their presence felt in the market especially Honda CD-70cc. In July-May 20092010, makers of Honda managed to sell

438,069 units as compared to 317,843 units in the same period of last fiscal. Honda sales may touch around 480,000 units by the end of current fis cal. Introduction of 70 cc bike by DYL Motorcycles had resulted in a big push in their sales, touching to 112,666 units in July-May 2009-2010 as compared to 56,423 units in the same period of last fiscal.

However, Sabir Shaikh said that Chinese bike makers had been giving a satisfactory performance for the last few years besides providing handsome revenue to the national kitty and jobs to thousands of employees. Instead of giving any incentives, the low cost bike makers were being subjected to various bottlenecks created by the Engineering Development Board (EDB). Suzuki bikes sales slightly picked up to

AUTOMARK | July-2010

1 5, 7 6 3 u n it s a s compared to 13,846 uni ts whil e Habib bike sales ros e to 18 ,148 uni ts from 12,540 units. Ravi bike sales increased to 21,351 uni ts as compared to 16,774 M. Sabir Shaikh units. The above figures show that the price increase in the last one year has not made any negative impact on the sales of bikes as a big blast in demand came from the growers of various crops like wheat, cotton, rice etc who made heavy p ur cha s e ow in g t o go od crop . The sale of bikes had mainly picked up in various crop producing areas while sa le in the urban areas remained laggard, Sabir Shaikh said. He said those persons who got some money under the Benazi r Income Su pport Prog ram ha d pref erred purchasing bikes. The Japanese bike makers had passed on the impact of one per cent increase in GST to 17 from 16 per cent in the new budget to the consumers while Chinese bike makers had also followed the suit by pushing up the rate by Rs 500 to Rs 1,000 per unit. Sabir said that it is too early to predict any negative impact of price hike on sales of bikes as much depends on the

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Article continued from previous page

The new budget 2010-2011 announced on June 5 had virtually ignored the bike makers and their proposals were not considered. Moreover, the subsidy or R&D support of $50 per bike on export of bike was also withdrawn from July 1, 2010. It is not clear whether the R&D facility would be available for the current fiscal year. crop as bike assemblers were heavily relying on sales in rural areas. He said much also depends on the political conditions in the next six months and economic indicators. Despite various political issues, it had bee n n ot iced th a t la rg e s cal e manufacturing (LSM) had been showing positive trend since July-May 20092010 and auto sector ho lds a good weight in the LSM index. However, Sabir Shaikh said that Chinese bike ma kers h ad bee n g iv in g a satisfactory performance for the last few years besides providing handso me revenue to the national kitty and jobs to thousands of employees. Instead of giving any incentives, the low cost bike makers were being subjected to various bottlenecks created by the Engineering Development Board (EDB). The new budget 2010-2011 announced on June 5 had virtually ignored the bike makers and their proposals were not considered. Moreover, the subsidy or R&D support of $50 per bike on export of bike was also withdrawn from July 1, 2010. It is not clear whether the R&D facility would be available for the current fiscal year. He said bike makers had engaged new workforce to meet the export orders from Afghanistan and other countries and in case the facility is not resumed the export would come to a halt and man ufac turers had to offload the additional work force. The withdrawal of R&D facility had ma d e P a k is t a n i m a d e b i ke s incompetitive against the rivals like India and China. Coming on domestic issues, he said that the EDB has again issued letters to

rega rding provi s ion al assembling/manufacturing certificate and submission of input records with reconciliation of account for the year 2009-2010. The Chinese bike makers had remained indulged in giving various replies to the EDB through out the last fiscal year and they will continue fulfilling documentation procedures in the current fiscal year. In order to facilitate uninterrupted production activities, the manufacturing certificate issued under condition (I) of SRO.6562006 is revalidated along with allocation of 25 per cent quota of the uploaded lists of importable components on PRAL’s OCS on provisional basis up to September 30, 2010 with effect from Ju ly 1, 2010 f or t he as s emb ly/m an u fa ctu re of 7 0cc motorcycles. The revalidation of the certificate and lists are subject to following conditions -- Submission of reconciled accounts of inputs used for the assembly of vehicles in compliance to the conditions of the SRO by August 13, 2010. Submissi on of lists of importable components latest by July 31, 2010 under condition (iii) of SRO.656(I) 2006 in case of any change in the lists. The chang es may be provided on the proforma with remarks by mentioning serial number of the components and respective model etc. In case of no n-submission of input records or submission of non-reconciled account as per spirit of the SRO, the EDB may suspend the certificate and li sts of importa ble com pon ent s. Bike makers have been asked to fulfill various conditions – The manufacturing set up shall be kept maintained with all the machinery/equipment, as amended from time to time and as provided in Annexure-A of the SRO. The installed production capacity shall be duly endorsed by the EDB and in case of any enhancement in the installed capacity, prior intimation shall be given to EDB for verification of the same. The machinery/equipment shall not be removed/sold from the site without pri or intimation to the EDB. The ow ne rs hi p of t he compa ny , its premesis/equipment witho ut prior approval of EDB shall not be changed and transferred. Under condition (IVA) the OEM shall make direct imports as per the verified lists under condition (iii) of SRO 656. Imports other than the conditions of the AUTOMARK | July-2010

SRO shall be treated as violation which would consequent upon suspension of the manufacturing certificate and lists of importable components. Except for the imports allowed under condition (iii) of SRO, balance parts shall be purchas ed from the local vendors having adequate manufacturing fa c il it i e s fo r t h e r e s p e c t iv e parts/components. Production and sales figures of the approved model shall be provided by the 10th of every month along with monthly sales tax return. Under condition (xii) of the SRO, in case of violation of any of the condition of the SRO, EDB may suspend or not revalidate certificate for assembly or manufacture of vehicles and lists of importable components. On submission of input records with reconciliation of account for 2009-2010, it is obligatory for the importer-cumassembler or manufacturer of vehicles, operating under the regulatory regime of SRO 656 to maintain the records of the inputs used for the assembly of vehicles during a year and submit the same to EDB on t he proforma as prescribed under Annex-B of the said SRO. Non compliance to the condition of the SRO necessitates to condition of audit in addition to suspension or non revalidation of manufacturing certificate and list of importable components. The manufac turers are advised to provide complete information pertaining to input records as per the requirements of the SRO 656 for each product/vehicle separately latest by August 15, 2010 on the formats prescribed for imported components, locally manufactured inputs from vendors and in-house manufactured components under Annex B of SRO 656. The EDB seeks additional information like statement containing month wise and product/model wise production, sale, sale price, sales value, input tax, output tax, sale tax paid with the copies of sales tax returns and payment challans. The EDB seeks list of local vendors with compl ete addresses, phone, fax and email. The revalidation of the manufacturing certificates and lists of importable components to be imported during 2010- 2011 shal l be subject to the provisions of the complete inputs records as per conditions of the SRO duly signed and stamped…

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by Mohammad Owais Khan

Exculisive Article

“All is well”

for car makers so far Government defers decision on the proposals regarding reduction in tariff on import of used cars as well as commercial import of three years used cars Since January this year, the government has been trying to force the powerful car makers to lower the prices. In case of non-compliance, the government had threatened to allow import of used cars to facilitate common man. From January to ahead of budget 20102011 announcement on June 5, the Ministry of Industries and Production as per instructions of the Economic Coordination Committee (ECC) held a series of meeting with car makers and sought proposal for reduction in car prices. The p rin t me dia esp ecia ll y ha d frequently covered the meetings held between stakeholders and the Ministry of Industries besides flashing banner headlines that the import of used and new cars would be allowed. Just two months before the new budget an n ou nc em ent , th e Mini s try of Industries, after failing to put up pressure on car makers for lowering car prices, had proposed revision in new entrant policy, reduction in tariff on import of new cars, increase in age limit of used cars from three to five years imported under personal baggage, transfer of residence and gift schemes or allowing commercial import of used cars up to three years by amending the import policy. Just few days ahead of new budget, market analysts were anticipating some tough budgetary announcements for local car industry with reference of liberalizing used and new car imports and encouraging new foreign investors in car segment. In fear of any awkward move, the car industry also launched media campaign

The print media especially had frequently covered the meetings held between stakeholders and the Ministry of Industries besides flashing banner headlines that the import of used and new cars would be allowed. through big advertisements about the negative implications in case used cars or commercial imports were allowed. It showed that the car industry was highly perturbed over t he gov ern ment’s intention of opening used car imports. It was proposed to allow import of used cars to compel local car makers to reduce prices. It was also proposed that auto industry should be persuaded to localize parts otherwise incentives may be withdrawn. In previous meetings of the ECC, it was noticed that the government had not been consistent on the policies about auto parts the car makers on one side had been increasing the prices on account of import of spare parts and on the other hand were enjoying tariff concessions. It was also observed that car makers

AUTOMARK | July-2010

were not utilizing their full capacity on the pretext of less demand whereas they collect the car price about four to five months before delivery. Consequently the depositors bear additional premium costs. The ECC also observed that there should be no restriction on setting up of new car manufacturing units in the country. The Ministry of Industries continued to seek proposals for reduction in car prices but the cartel of car assemblers kept showing their reservations on decreasing the prices under the current economic scenario. Car makers had said that sales volumes had declined to eight per cent in 20072008 and further fell to 47 per cent in 2008-2009. However the industry had started to recover in 2009-2010 but was still below the level of its peak year i.e. 2006-2007. They said that Pakistani rupee lost it value against Japanese Yen by 11 per cent during April 2009 to April 2010 and five per cent against the US dollar. In another reservation to lower prices they said t he present product ion capacity of cars had increased from 80,000 cars in 2001-2002 to 250,000 units in 2010 whereas at present the industry was operating well below its capacity i.e. 50 per cent. They added that prices of raw materials h ad increased double digit. “If the tariff on imported parts was reduced from 32.5 to 20 per cent that will entail reduction in car prices from Rs 25,000-30,000 per unit,” they further said. Despite a hectic exercise in the last six mo nt h s in t he lig ht of a bov e developments especially for reducing

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by Mohammad Owais Khan

Exculisive Article (continued)

Many car analysts think that the government either under some kind of pressure or some genuine reasons might have realized that the decision opening new and used cars would give a serious jerk to the local car industry which had now come out from the hot waters in the last one year after increasing consumers’ confidence, high demand owing to sharp rise in rural buying after good crop of wheat, cotton, rice etc car prices, consumers were expecting some kind of punishment from the government for local car makers. The new budget had surprisingly remained silent on the local car industry and also on import of used and new cars. However, last week’s ECC meeting took five decisions in the light of last six months meetings between government and stakeholders as well as on summary submitted by the Ministry of Industries on June 3 (just two days ahead of budget announcement) on rationalization of locally made cars. “The ECC deferred decision on the proposals regarding reduction in tariff on import of new cars as well as commercial import of three years used cars.” Th e ECC as ked the Mini st ry of Industries to bring a summary in the next ECC meeting with full information about profit/loss of different units in the automobile sector. The summary will also contain proposals for improving the perso nal bag gage, transfer of residence and gift schemes for the purpose of import of used cars in consultation with the Revenue Division, Minis try of Commerce, Bo ard of Investment and other stakeholders. The ECC approved removal of condition on the new entrants of having 500,000 units in production in countries other than Pakistan. In case of car, the new entrant will now have 100,000 units annual production in countries other th a n P a k i s t an . F o r l o c a l manufacturers/joint ventures, the target of 100,000 cars will be achieved within three years from the date of operation subject to the prescribed international standards. Moreover, there will be no other restriction on setting up new in dust ries in aut om obile sector. The ECC decided that the government should ensure consistency in its policies particularly on deletion program in the auto sector. If one take a close look over these decisi on s in lig ht of s ix mon ths deliberations, it seems that the Peoples’ government is not sure how to take

consumer friendly decisions or how to deal with strong Japanese car makers whose top diplomats in Pakistan are also seen issuing statements asking the government to promote the local car industry. But allowing new car entrants having 100,000 units per annum production outside Pakistan is encouraging but only Chinese car makers fit in this criteria to give a tough time in view of their low price cars. Perhaps the decisi on of encouraging new entrants was taken at a time when the President was in China to discuss various political and economic issues. Consumers have already seen a big demand burst following the arrival of Chinese bike makers and by the dint of them the production in 2009-2010 is set to cross a record one million mark as compared to 800,000-850,000 units in 2008-2009. Arrival of Chinese bikes has opened new job avenues besides helping government in getting some more revenues. However, in case of cars, consumers’ perception about Chinese cars is shaky in terms of its quality, durability and road performance as compared to Japanese cars. Here the government has to see the new entrants’ quality and their worldwi de reputation as previ ous experience of introducing Chinese cars had failed. On import of used cars, market people said that the car industry may not feel threatened over the increasing in age limit to five years from the current three years imported under various schemes. There are reports that Japanese car prices had swelled after Yen appreciation AUTOMARK | July-2010

which may not be feasible for imports/ However, the local car industry is more alarmed over any move to bringing back depreciation on used car to two from one per cent which makes a big impact on car prices of used cars. Many car anal ysts think t hat th e government either under some kind of pressure or some genuine reasons might have realized that the decision opening new and used cars would give a serious jerk to the local car industry which had now come out from the hot waters in the last one year after in creasing consumers’ confidence, high demand owing to sharp rise in rural buying after good crop of wheat, cotton, rice etc. Many banks which had suspended car financing two years back had now resumed the facility again by giving some new incentives. Besides, the vendors and car makers had re-hired their thousands of sacked workers in the last one year who may again face the axe in case used cars are allowed. One thing is certain that the government is more serious in localization of parts as it is ultimately to play vital role in reducing car prices. But again a few assemblers were hesitant in localizing eight to 10 hi-tech engine parts as they think that it could not be done on low volumes besi des it requi re heavy investment. It is estimated that localized parts and components cost about 40 per cent less as comp ared to imported par ts. The government is also more serious in knowing the profit and loss earned by the manufacturers. Th e r ole of t h e E n g in e er in g Development Board (EDB) in handling the auto sector has also created doubts for the government. The Chinese bike makers are already facing the wrath of EDB through various letters and enquiries. In the recent meeting,the ECC had enquired about the function of the EDB and its contribution in the field of automobile sector. The EDB will give a presentation to the ECC in the next

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Launching ceremony - Event update

Cross-Country Road Show of Daewoo Buses by Daewoo Pak Motors (Pvt) Ltd.

Launching ceremony at Rawalpindi

Launching ceremony at Lahore

Mr. Israar Khan, Chairman Nadir Coach along Faisal Meraj, Manager Marketing & Sales, with other sales & services staff at Faisalabad

Mr. Kher Mohammad of Sher Islam Motors, Mr. Nadeem Ahmed and other with Daewoo Team at Multan

Mr. Nadeem Abbas Cheema of Manthar Coach visiting Road Show at his terminal in Sadiqabad

AUTOMARK | July-2010

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Launching ceremony - Event update

CROSS-COUNTRY ROAD SHOW OF DAEWOO BUSES As part of t he recent launc hi ng ceremony of International Quality Daewoo Buses held in Karachi, a CrossCountry Road Show was organized by the marketing department of Daewoo Pak Motors in Different cities of Pakistan started from Karachi to Rawalpindi.

SADIQABAD A special arrangement was made for product display at the Terminal of Manthar Coach, courtesy to Mr. Nadeem Abbas Cheema, the owner of Manthar Coach. All the major transporters of Sadiqabad city including Al-Makkah Coach, Waraich Coach, Sadiqabad Coach, Makkah Coach, Moon Cheema Coach, President Lines, Pak Madina Coach, Baba Farid Coach and various others visited the event. The transporters highly appreciated the unma tched in tern ational qual ity standards of Daewoo Buses including BH116.

MULTAN Distinguish guests from the transport industry in Multan flocked the venue to inspect the unmatched international quality standards of Daewoo Buses including BH116, BH115, BF120 Front Engine.

LAHORE The management of Daewoo Pak Motors including The CEO, Mr. Y.K. Nam; Vice CEO, Mr. Mohammad Ayub Khan, Director Marketing & Sales Mr. Tahir Javed; made their presence on the stage to welcome Guests of Honor like Mr. Chaudhry Mohammad Iqbal, President Punjab Bus Owners Association and Mr. Azam Khan Niazi, Chairman Niazi Express Bus Service. Distinguished guests from across the board i.e. Public Transporters of InterCit y/Cit y, Good s Tr an s port er s, Automobile Vendors, Govt. Officials, Co rp o ra te I n st i ti t ut e s a nd Print/Electronic Media, actively chipped in to be a part of the launching event of Globally acclaimed Daewoo brands. Mr. Y.K Nam, CEO of Daewoo Pak

Motors addressing the occasion also underlined the differentiating features of Daewoo Products Especially BH116, The first & only locally manufactured Rear Engine Air Suspension Bus with 340 HP, BH115, Rear Engine with 310 HP, BF120 Front Engine with 240 HP and BH115 CNG, the only certified dedicated CNG Rear Engine Bus in Pakistan with 240 HP. Mr. Salman Zafar, Chairman Daewoo Abdullah Motors also addressed on the occasion to express his gratitude to the management of DPML for designating Daewoo Abdullah Motors as a 3S dealer for the Lahore region. He lauded the efforts and cooperation extended by DPML management to establish the dealership. Later on the ribbon cutting ceremony, to mark the grand opening of Daewoo Abdullah Motors, was held in the office chaired by the CEO & Vice CEO of DPML. The prominent presence of Print & Electronic Media brought the event in t he limeli ght for man y da ys.

FAISALABAD The venue selected was the Terminal of Nadir Coach at Abdullah Pur Chowk, courtesy to Mr. Israar Ahmed Khan, Chairman Nadir Coach and Khan Coach Faisalabad . Mr. Israar no t only forwarded his hands to welcome the team at his showroom but also made efforts to ensure the arrangements done on time. The event kicked off in the morning and distinguished guests from the transport industry in Faisalabad flocked the venue to inspect the unmatched international quality standards of Daewoo Buses. Later on we took the buses along with other transporters to the Owner of Kohistan Coaches, Mr. Shahid Nazir. He specially took the ride of the buses and expressed his complete satisfaction towards the performance and showed high interest to induct the buses.

RALWAPINDI The launching event of Daewoo Pak Motors at Rawalpindi was like putting last jewel in the crown. The event was planned at Daewoo Bus & Truck s’ AUTOMARK | July-2010 14

Showroom located at Naseerabad, GT Road in Rawalpindi. The Chief Guest Mr. EON SHIN, The Ambassador of Republic of South Korea, and the Guest of Honor Mr. Aftab Ahmed Khan Sherpao, the Ex-Federal Interior Minister Govt. of Pakistan; were warmly greeted by The Chairman of Dae wo o Pa k Mot or s Mr. Ha ji Mohammad Gufran alongwith Mr. Y.K. Nam, CEO; Mr. Mohammad Ayub Khan, Vice CEO; Mr. Y.G. Kim, Director Marketing & Sales-DPML; Mr. Tahir Javed, Director Marketing & Sales and Mr. Mohammad Faisal Meraj, Manager Marketing & Sales. The event kicked off at 11am at the Showroom with the recitation of Holy Quran. After the recitation, introductory speech was delivered by The Director Marketing & Sales, Mr. Tahir Javed in which he highlighted the Global scenario of Daewoo Bus Corporation as well as the vision and objective of the Joint Venture agreement of Daewoo Bus Corporation Korea and Afzal Motors (Pvt.) Ltd Pakistan. The Chief Guest Mr. EON SHIN, The Ambassador of Republic of South Korea, wh ile a d dre s si n g t he occa si on highlighted the significance of the first Korean Commercial manufacturer’s investment in Pakistan that will be a milestone in the relations between the two countries. He also expressed that the foreign Director Investment by Daewoo Bus Corporation no t only injected new capital investment but also brought new Technology in shape of Machinery Equipment and sk ill of Human Resources. Mr. Y.K Nam, CEO of Daewoo Pak Motors addressing the occasion also underlined the differentiating features of Daewoo Products which have been tested in all terrains in Pakistan and we claim with utter confidence that Daewoo buses are best in Fuel Economy, Comfort, Safety and longer life that will ensure fleet operation to get thei r investment return in shortest time compared to al l buses in market. The prominent presence of Print & Electronic Media brought the event in the limelight for many days.

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Corporate Events update

World Environment Day Celebration at Hinopak Hinopak Motors Limited together with Total Atlas Lubricants Pakistan (Pvt) Ltd. celebrated World Environment Day with great zeal and enthusiasm. Dr. Moazzam Ali Khan, Director Institute of Environmental Studies of Karachi University was the Guest of Honor. Dr. Moazzam Ali Khan appreciated efforts made by Hinopak in promoting env iron ment al pres erva tion an d admired the student projects inculcating awareness on various environmental aspects of our daily life. The Deputy Manag ing Director, Hi nopak , Mr. Takeshi Ito, highlighted the importance of clean and safe environment and added that Hino Motors, Japan is totally com m it t ed for en v ir on m en t a l preservations and is continuousl y striving to produce environmental friendly vehicles. Mr. Mohammad Irfan Shaikh, Director Sales & Marketing, Hinopak emphasized that as per the mission of company, Hinopak Motors Limited is committed to p rovide t he soc iety w ith sa fe, e con o m ica l, c om f or t a b le an d

en vironm ent f riend ly m ean s of transportation by manufacturing and supplying commercial vehic les and services.

Syed Arshad Ali, General Manager, Product Support Di visi on said that Hinopak is doing its best to help its customers in maintaining their vehicles in best tuned conditions to mitigate air pollution. In the end, the awards were distributed to the school children of PECHS Girls school, Milestone school an d S. I. T.E Mod el s ch ool wh o enthusiastically participated in the POSTER COMPETITION.....

Vice Chairman Toyota Motor Corporation and Managing Director Toyota Tsusho Corporation Visit Hinopak Hi no pak no t onl y has Jap anes e management here in Pakistan working to serve the customers, but apart from that Hinopak has senior personnel visiting its premises from time to time from Japan to provide strategic advice

Delegation of Japanese team along with Hinopak’s Top Management

and technical expertise. A delegation comprising of Mr. Katsuaki Watanabe, Vice Chairman, TMC & Mr. Seiichiro Adachi, MD, TTC visited Hinopak to discuss the various issues including the future trends, plans for the Pakistani market and performance of current Hino models. They analyzed if Hino products were up to the customer requirements and what necessary modifications were required in the products to increase customer satisfaction. For this purpose the team also held discussions on the latest technology that would improve the quality of Hi nopak products an d AUTOMARK | July-2010

services. They were impressed by Hinopak’s progress even in difficult economic times and were confident that the company’s performanc e wo uld improve even further to provide best quality products to all Hino customers....

Mr. Wachi, Director Production briefing the Japanese delegation about the production facilities at HML.

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Corporate Event

Hinopak Parts & Service Dealers’ Conference-2010 Number of presentations was made by the Dealers & Product Support Division on various topics in which they highlighted “How to promote the dealership activity and make the Hino Customer Satisfied”

Group photgraph of Hinopak’s Parts Dealers with Hinopak’s management and PSD personnel Hi nopak Pa rts & Servi ce Deal ers’ Conference 2010 was held at Hinopak recently. The main objective of the conference was to analyze the strategies for providing the best after sales support services to Hino customers. The conference was attended by senior management of Hinopak, all authorized 3S, 3S LCV a nd 2S deal ers a nd representatives of Hinopak Area Offices. Mr. H. Iijima, Managing Director & C EO, Hi no p ak in au gu ra ted t he conference and assured the dealers of full support of Hi nopak and also r eque st ed a ll de al ers for t heir

suggestions and regular feedback. Mr. T. Ito, Deputy Managing Director highlighted that during the current finan cial crisis both Hinopak and Dealers should work jointly to improve customer satisfaction. He assured all the dealers of Hinopak’s fullest support to ac hieve customers’ satisfaction. Mr. Muhammad Irfan Shaikh, Director Sales & Marketing, Hinopak said that in t hi s in t en s iv e co mp et it iv e en vironm ent and bad econ omic situation we should strive to take care of our valuable customers aiming that our customers are able to use their Hino

p rod uct s wi t ho u t in t err up tion . Mr. S. Arshad Ali, General Manager, Product Support Division advised for the enhancement of Hino Brand value by providing customer support services with promptness and courtesy that would give customers peace of mind for man y years to come. Number of presentations was made by the Dealers & Product Support Division on various topics in which they highlighted “How to promote the dealership activity and make the Hino Customer Satisfied”...

M r. H . Iijim a, MD & C EO, H ino pa k , p resen ting th e p er for m anc e A w ar d to Mr. Abbas Sa ifud din o f H ino Kar ach i, Mr. Awa is of Hin o P esh aw ar a nd M r. M oh am ma d Ali M alik o f Ali Aut om ob ile .

AUTOMARK | July-2010

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Energy sector update

Pakistan enters export market of CNG kits He said about 30 percent of the total production of CNG kits by Landirenzo is being exported abroad; as the company is planning to increase its production and is likely to enhance export volume from Pakistan Pakistan has entered the export market of CNG kits as famous CNG kits manufacturer from Italy – Landirenzo has started regular shipments of fourwheeler’ CNG kits to Brazil, China, Far Eastern and European countries, said Chief Executive Officer of Landirenzo Pakistan, Alberto Barbiery. He said about 30 percent of the total production of CNG kits by Landirenzo is bein g exported abroa d; as th e company is planning to increase its production and is li kely to enhance ex por t v olum e fr om Pak is t an . Alberto said Landirenzo has over 90 percent market share of CNG kits in Pakistan including customers like Indus Motors for Toyota and Daihatsu cars and Pak Suzuki Motor Company for all range of cars and vans besides catering to the individual customers through its four dealers across the country who have furth er n etwo rk of wh oles al ers. He informed that Landirenzo started its operations in Pakistan in 2007 by assembling CNG kits and now it has

reached the deletion level of 20 percent as the company is manufacturing 20 percent local components. He said that the company’s total volume has reached $20 mill ion (Rs 1660 mil li on approx) per annu m. He, however, said that Landirenzo is yet to exploit the market of heavy vehicles such as buses, trucks and vans, which has a big potential and if the owners of heavy vehicles convert their vehicles to CNG, the country would save precious foreign exchange being spent on import of diesel. He said that the Pakistan’s mounting menace of environmental pollution w ould also be res olved considerably. To a query he said that his company

Landi Renzo Developing Dual-Fuel CNG/Diesel Retrofit Kit for Light Vehicles NGV Global News. Landi Renzo SpA is developing a dual- fuel CNG/diesel conversion kit for light-duty vehicles. Speaking at NGV 2010 in Rome on the topic of The Power of Dual-Fuel as part of the Dual-Fuel and Fuel Blends conference session, Daniele Ceccarini, Research and Development Manager, explained, “It is not a new idea. What is

new is the approach, the technical approach.” The company has been working on a reconfiguration of the technology associated with natural gas ve hi cle r et rof its , ca r ry ing out simulations to study the various impacts on efficient fuel utilization and system durability... AUTOMARK | July-2010

believes in quality and safety and is ready to transfer its technology to Pakistan by gradually adding local components until it reaches 100 percent. He said that the company has set up a testing laboratory besides assembling and manufacturing plant in SITE area and each and every component is checked before assembling. Alberto informed that about 12,000 to 15,000 kits are being manufactured in its SITE facility and the total annual production has gone beyond 45,000 units. He warned that the safety and quality of the CNG kits manufac tured in Pakistan or imported should be checked by the concerned authority and that could be possible when the authority would issue lic ense to the certified dealers only. He expressed concerns over the safety and quality of CNG and LPG kits being installed in auto-rickshaws and taxis in Pakistan. He advised that people considering getting CNG kits installed into their vehicles should to go to registered and certified CNG installers for the sake of thei r safety. He informed that his compa ny wo uld so on la unc h an awareness campaign about safety and precautions regarding CNG kits……

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Research Report by World Bank

Doing Business in Pakistan 2010 Captures differences in business regulations and their enforcement across locations in a single country or region. A fa sc inat ing n ew r eport ra nk s Faisalabad as the most businessfriendly city in Pakistan, followed by Multan (2nd) and Lahore (3rd). Pa kis ta n ’s la rg e s t c omm er cia l metropolis, Karachi, comes out at 9th place in a list of 13 cities in Pakistan. The full ranking is: Faisalabad (1st), Multan (2nd), Lahore (3rd), Islamabad (4th), Sheikhupura (5th), Gujranwala (6th), Sukkur (7th), Peshawar (8th), Karachi (9th), Rawalpindi (10th), Sialkot (11th), Quetta (12th) and Hyderabad (13th). In the first such ranking, conducted in 2007, Karachi was declared the top city in Pakistan in terms of busi nessfriendliness. However, the comparison over time may not be entirely accurate since the 2007 ranking had included only six cities, as opposed to 13 in the 2010 rankings; and the methodology has also improved over the two reports. Doi ng Business in Pakistan 2010, rep ort s on res ea rch con du ct ed collaboratively by The World Bank and the International Finance Corporation (IFC) and compares the regulatory environment for business in 13 Pakistani cities. It measured performance across 6 stages of “the life of a small to midsized domestic enterprise”:

(i) Starting a business, (ii) Dealing with construction permits, (iii ) Register ing pro perty , (iv) Paying taxes, (v) Enfor cing contracts and

(vi) Trading across border s. According to the study, Pakistan as a whole ranks 85 out of 183 economies in terms of ease of doing business, but if the best practices that are already practiced in different cities in Pakistan were adopted in all cities Pakistan’s ranking would rise a full 16 places to 69th place.

• First, consistent reformers outperform others. Since the publication of Doing Business in South Asia 2007, Faisalabad and Lahore have both maintained their high ranking by introducing reforms in more than 1 area measured in this report. Both cities are now using eServices for business start-up and have adopted new uniform building and zoning regulatio ns for construction permits. Other cities—like Karachi or Sialkot—dropped, relative to their peers. Some of these changes can be attributed to the addition of 7 new cities—some of them, like Multan, with competitive regulatory frameworks. • Second, no single city does well on AUTOMARK | July-2010

all indicators. For example, Islamabad ranks well on the ease of starting a business and ease of paying taxes but lags behind on enforcing contracts and trading across borders. Karachi ranks ni nth overall on the ease of doing business. While it is efficient in trading a c ro s s b or d e rs a n d con t ra c t enforcement, Karachi lags behind other cities on the ease of obtai ni ng a construction permit, transferring a property title, and paying taxes. These res ult s can g uid e policy ma ker s regarding areas where improvements are possible. Cities can learn from each other and adopt the good practices that already exist elsewhere in Pakistan. For example, Sukkur can look to Faisalabad for ways to improve starting a business and registering property.

• Third, size does not determine ranking. Cities can compare themselves both with their peers and their larger and smaller neighbors. Both smaller cities, such as Multan and Sheikhupura, and larger cities, like Faisalabad and Lahore, are ranked in the upper half. Smaller cities may be more competitive by promoting the use of technology, w h ile m a in ta i ni n g low c os t s . Government offices in large business centers deal with a high volume of op era t ions , wh ich ca n le ad to bottlenecks a nd hi gher cos ts for professional services. On the other hand, these cities benefit from economies of scale and may have more resources at their disposal to invest in administrative modern ization than their smal ler neighbors....

Be Pakistani Buy Pakistani

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Research Report by World Bank

Doing Business in Pakistan 2010

AUTOMARK | July-2010

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Motorcycle sector update

Chinese bikes making fast inroads in local market Pakistan’s motorcycles output crosses million units in 11 months The production of motorcycles in Pakistan has crossed million units during the first 11 months of the current fisc al year, accord ing to a study conducted by press media. Pakistan Automobile brand members d omina ted by Jap an ese br an ds accounted for over 670,000 units during the first 11 months of the fiscal year and non-members mostly Chinese models p rod uce d o ver 4 00,0 00 u n its . Chinese motorcycles are making fast inroads in the local market against the Japanese brands though Honda with sales of over 438,028 units till May this year followed by Yamaha that produced 113,288 units, according to the statistics released by Pa kistan Automobiles Manufacturing Association (PAMA). Even among PAMA members the next three largest producers are local brands using Chinese technology. Each of them produced more units than the Japanese brand of Suzuki. On the top is Hero that has produced 31,210 units till May and enjoys 4.5 per cent share in the PAMA p ro du ctio n t he d a ta r ev ea led . The production of the company grew by 69 per cent again st 18,3 88 uni ts

produced in 2008/09. Only eight local, Chinese brands and three Japan ese brands are PAMA members. The Chinese motorcycle producers have cumulatively produced over 114,000 motorcycles this year. However, a PAMA member said that around 45 non-PAMA producers are m an ufa ctur in g a roun d 4 50, 000 motorcycles per annum. He said some of them have larger production than many PAMA members. Th is yea r th e tot al m otorcy cle production is estimated by the industry circles at around 1.1 million units. It was found that more than 56,750 Japanese motorcycles rolled in during the first 11 months of this fiscal year. The loc al brands with the Chinese technology produced 514,000 units, including around 35,000 three wheelers, it said. “The Chinese brands are increasing their market share rapidly,” said Dr Shahid Zia, a senior market analyst. The high deletion in motorcycles has facilitated the local entrepreneurs to launch their own brands, he said, adding that the Chinese were more liberal in

t ran sfer of techn ology t han the Japanese. At the start of this century, 99 per cent of the market share was with the Japanese brands. Today, he said, the Japanese share has shrunk to 51.5 per cent, while the local Chinese brands have a share of 48.5 per cent. He said that by the next year Chinese brands would have larger share in the market. An industry expert said that Chinese motorcycles initially attracted customers because of lower rates. The Japanese initially ignored the threat from Chinese brands, but were then forced to revise downwards their prices. The Chinese brands have now proved their reliability and quality as well that has kept check on the rates of Japanese brands, he said. Localisation of almost all parts has also made the local rates immune from the variations in the currency rates. He said Pakistan now has a reliable vendor base and the country might soon venture into exports of local brands…..

Motorcycle makers raise prices Motorcycle assemblers on Thursday raised the prices after increase in sales tax to 17 from 16 per cent coupled with hike in prices of imported and local parts followed by hi ke in power ta riff. Atlas Honda Limited has raised the prices of CG-125 standard and deluxe models by Rs1,500 to Rs2,000 while it has kept the rate of CD-70 and CD-100 unchanged. Pak Suzuki Motor Company has also increased the price of GS-150 and GS-

125 (motorcycles) to Rs84,500 and Rs78,500, respectively, from Rs83,900 and Rs77,900. Sprinter, Sprinter ECO, Shogun and Shogun (deleted) are now priced at Rs69,500, Rs66,500, Rs76,000 a nd Rs 72 ,0 00, re sp ective ly , a s compared to Rs68,000, Rs65,900, Rs75,400 and Rs71,400. DYL Motorcycles Limited has pushed up the price on June 16 of YD-70cc Dhoom, YD, 100cc Junoon, YD100cc Yama 4 and YB 1 00cc Roy al to AUTOMARK | July-2010

Rs45,300, Rs72,200, Rs68,800 and Rs68,300 as compared to Rs44,900, Rs70,500, Rs67,000 and Rs66,000 respectively. The DYL official said the price has further gone up by one per cent due to increase in sales tax. He said the steel price, which was $550-600 per ton last year, is now over $1,000 per ton. The local aluminum price is now Rs190 per kg as compared to Rs120-130 per kg last year....

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Automotive sector update

Car makers fail to persuade minister to do their job The ECC has deferred decision on the proposals regarding reduction in tariff on import of new cars as well as commercial import of three year old cars till the next ECC meeting. However the ECC maybe compelled to take this decision as Prime Minister Syed Yousuf Raza Gilani has already directed that import of used cars be allowed if local manufacturers do not reduce prices

Minister for Industries and Production, Mir Hazar Khan Bijarani, is said to have expressed his inability to play any role in blocking the government's move to 'force' a reduction in car prices, sources close to Secretary Industries told media. Some car manufactures reportedly arrived at the Industries Minister's Karachi residence on July 6,. However, they could not meet the minister because they had no prior appointment, sources added. Later, these businessmen went to the PIDC House in Karachi where they met the Minister and tried to convince him that the 'auto sector is in real financial crisis' and that the Minister should make an effort to block his Ministry's summary o n ra t i on a li za t ion o f loca l ly manufactured cars. Sources said the Minister listened to the manufacturers sympathetically but stated that the Economic Coordination Committee (ECC) of the Cabinet is the authority that has to approve or reject the proposal. Car manufacturers have already used their influence through various way with a view to blocking the proposal. The ECC has already directed the

Industries Ministry to bring a summary in the next ECC meeting with full information about profit/loss of different units in the automobile sector. The summary will also contain proposals for improving personal baggage, transfer of resi dence and gi ft sch emes in consultation with the Revenue Division, Ministry of Commerce, Bo ard of Investment (BoI) and other stakeholders whose names have not been mentioned in the minutes of the ECC. It is pertinent to mention here that a leading car manufacturer increased prices of different uni t models on account of one per cent increase in sales tax at a time when the ECC is working on reducing prices. However, other car manufacturers have not passed on the sales tax rise and other duties to the consumers. Competition Commission of Pakistan (CCP) has stated that notwithstanding the slowdown in the economy which reduces demand for new cars, customers still pay a premium for immediate delivery. "To counter this practice, allowing the import of used cars should reduce the ability of the assemblers/dealers/agents AUTOMARK | July-2010

to charge such premiums but is unlikely to eliminate it entirely," said the CCP. The sources said CCP's observation in relation to a car model of a particular manufacturer was seconded by some of the Federal Ministers who stated "car manufactures are not utilizing their full capacity on the pretext of less demand whereas they collect the price of the car about 4-5 months before delivery. Consequently, the depositors bear additional premium costs as well". Acc ording to the Commission it is important for the government allow this safety valve to operate on a sustained and predictable basis. The assemblers tend not to increase production to quickly meet demand and this gives an opportunity to charge higher premiums. The ECC has deferred decision on the proposals regarding reduction in tariff on import of n ew cars as well as commercial import of three year old cars till the next ECC meeting. However the ECC maybe compelled to take this decision as Prime Minister Syed Yousuf Raza Gilani has already directed that import of used cars be allowed if local manufacturers do not reduce prices.....

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Energy and Transportation update

PSO to bear the brunt of fuel transportation cost after IFEM deregulation The cas h st rapped s tate ru n Oi l Marketing Company (OMC) Pakistan State Oil is going to bear the brunt of fuel transportation cost after deregulation of Inland Freight Equalisation Margi n (IFEM) as Economic Coordination Committee (ECC) of the cabi net has decided that PSO wi ll provide subsidy to far flung areas from its own margins, media has learnt reliably. W hile considering a summary on 'Review of Petroleum Products Pricing Formula' in a meeting held on July 1, 2010 some ECC members expressed serious concerns over deregulation of IFEM which might create an awkward s it u at ion f or t he g ov er n me nt . "Provinces need to be taken on board before taking a final decision on IFEM," sources said quoting ECC members. The issue of additional transportation cost t o t he far flu ng area s after

deregulation of IFEM was also raised. Finance Division was of the view that prices of other commodities also vary across the country and there is no logic to ensuring that consumers of one area pick up the cost of consumers in another area. "It was, however, suggested that the proposal may be approved subject to provision of subsidy to far flung areas by PSO from its own margins," sources said quoting members ECC. ECC was briefed that basic objectives of proposals in the new oil pricing formula were to enhance operational efficiency, improve customer services, ensuring price competitiveness while moving towards deregulation of pricing of petroleum products as per government policy. ECC was briefed that with deregulation of IFEM road/rail component, prices will not remain uniform and will vary from location to location depending

PSO unveils E-10 fuel Pakistan State Oil (PSO) has launched it s en vironmen t-comp atible an d consumer-friendly E-10 fuel in Punjab. The sale of E-10 fuel will be available at select PSO retail outlets in all major cities and towns of Punjab including La ho re, Isl am abad , Ra walpind i, Sheikhupura, Gujranwala, Sialkot, Jhelum and Mirpur-Azad Kashmir, said a press release. The launch of E-10 fuel will serve as a cost-relief to the inflation-strick en masses, as it offers price economy and saving of Rs 2.50 per litre than normal unleaded motor gasoline. Furthermore, the widespread use of eco-friendly fuel wi ll help the coun try redu ce its dependency on imported gasoline. PSO's E-10 is a blend of ethanol and gasoline, which consists of 10 percent ethanol dissolved in normal gasoline. The E-10 has tested positive to produce less carbon-mono-oxide emissions that h elp r ed u ce po llut io n in t h e environment. The high level of octane present in E-10 improves a vehicle's engine performance

and prevents engine knock. Another advantage of E-10 is its ethanol content that is primarily plant fuel derived form organic compounds, which acts like a cleaner solvent and ensures longer life of the engine. Moreover, E-10 offers extra mileage and derivability per litre of the fuel consumed. Managing Director PSO, Irfan Qureshi hailed the launching of E-10 in Punjab and said that the launch is testimony to PSO 's co mm it me nt t o d eliv e r econ omical an d en viron menta ll y friendly solutions to the energy needs of the country. He said customer response to E-10 fuel in Sindh, in terms of pricing and benefit, has been phenomenal. E-10 is a green fuel that helps the engine operate better an d reduces t he burd en on th e consumer's wallet. "We at PSO are optimistic that E-10 fuel will achieve a similar response in Punjab and satisfy our consumers", he said adding "We further plan to extend our E-10 reach to 100 retail outlets, nationwide".-PR AUTOMARK | July-2010

upon the transportation cost from supply source as against the existing uniform prices to 12 depots/locations spread across the country. It was also proposed that Ogra should set the freight rates for different locations during the first six months to control overcharging by the OMCs. Ogra was of the view that without amendments in its Ordinance, it cannot perform the monitoring functions for deregulated products . "Therefore, amendment in the ordinance may be m a d e p r io r t o t h e p r op o s ed deregulation," sources said adding that Ogra also proposed that the period of fixation of IFEM rates should be for one year instead of six months. ECC was informed that a committee of oil exp erts hea ded by Secre tary Petroleum was formed in November 2009 by Petroleum Minister to review Petroleum Products Pricing formula in t he lig ht of former Justice Rana Bhagwandas Commission and Supreme Court directives. The committee conducted a series of meetings to deliberate in detail various options like existing import parity (IPP) w it h an d wi tho ut d eemed du ty, Singapore based prices, guaranteed rate of return, processing fee and refining margins in percentage and sliding scale margins. ECC was further informed that the refineries had demanded guaranteed rate of return irrespective of any pricing formula, which was not acceptable to the government. Despite hectic deliberat ions, the committee could not develop consensus on the refineries pricing formula for petroleum products. Ogra and Planning Commission agreed in principle wi th the proposals of deregulation of IFEM and pricing of petroleum products and suggested effective role of Ogra. The issue of removal of 7.5 percent deemed duty on High Speed Di esel (HSD) was also discussed and considered not viable at thi s stage because of losses to oil refineries and revenue loss on import of HSD to governmentâ&#x20AC;Ś

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Automotive sector update

Govt plans to facilitate new foreign car investors “The government cannot make any mid-term change or modification in the Auto Industry Development Plan till 2012,” he said, adding that the policy was introduced in 2007 for five years after an understanding between Pama, PAAPAM and the government. The government, he said, should hold discussions with the stakeholders on this issue in case it is necessitated to revisit the AIDP.

The go v ern men t is con si d ering facilitating new foreign car investors by red ucin g th e limit of ove rs eas production from existing 500,000 to 100,000 units per annum. Under the eligibility criteria, in case of cars in the existing Auto Industry Investment Policy (AIIP), a part of Auto Industry Development Plan (AIDP), the pot ential new entrant must h ave 500,000 units annual production in countries other than Pakistan. This step is aimed at luring new smaller players from China to compete with Toyota, Suzuki and Ho nd a in Pak ist an. When CEO of Engineering Development Board (EDB) Asad Elahi was asked whether the EDB has forwarded any suggestions on this issue, he did not elaborate, but said “it is enough that curtailing limit of production for new ent ran ts is u nder go ve rnme nt’s consideration.” Under AIDP, the go vernment has already framed rules and procedures for foreign investors in the auto sector. A ne w en tr an t m ean s a p ot en tial assembler/manufacturer of global s i g n i fi c an c e w ho h ad n o assembly/manufac turing of similar vehicles in Pakistan in the past and

intends to assemble/manufacture a vehicle by himself or throug h an agreement with a Pakistani company. Under the rules, new entrants would be al lowed to import 1 00 p er cent completely knocked down (CKD) kits, at the leviable customs duty, for a period of three yea rs from th e sta rt of assembly/manufacturing. The existing local assemblers have continuously been ignoring government for pr ice r educt ion , cont rolli ng premium, tac kli ng issu es of lat e deliveries and localization of hi-tech parts. Perhaps the government is now thinking that the current assemblers should be handled strictly by other way lik e allowing new foreign players. An official in the Pakistan Automotive Manufacturers Association told Dawn that the government has not shared the issue of production requirement for new entrants with the auto assemblers and stakeholders. “The government cannot make any midterm change or modification in the Auto Industry Development Plan till 2012,” he said, adding that the policy was introduced in 2007 for five years after an understanding between Pama, PAAPAM and the government. The AUTOMARK | July-2010

government, he said, should hol d discussions with the stakeholders on this issue in case it is necessitated to revisit the AIDP. The AIDP also ensures consistency of polic ies and in case any one-sided changes or amendments are made, then it would be a breach of contract and industry would lose confidence in the government, he added. A car parts maker said that the vendors would not benefit with the arrival of new entrants at least for three years as new entrants would be allowed to import 100 per cent CKD kits. Ac cord in g t o Top Lin e Pak is tan Research, few concerns pertaining to auto sector are that the budget remains silent on import duties on CKDs under AIDP plan. According to this plan, some high tech parts should have been loc alised by 2009-2010. Now thi s is not cl ear whether the government has given some relaxation or not. If there is no relaxation, this means the car assemblers would be charged with higher import duties on those parts which should have been localised by the current fiscal year......

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Focus on Energy sector

CNG sector gradually falling into decay Pakistan Economy Watch (PEW) said So far, almost Rs 177 billion has been invested in this sector excluding cost of land, 5900 licences have been issued, 3140 stations are operational providing cheap fuel to 267900 vehicles, employment opportunities to thousands, paying Rs 32 billion in different taxes to federal, provincial and district governments and saving $1.65bn of foreign exchange The Pakistan Economy Watch (PEW) said that flourishing CNG sector is gradually falling into decay. Many investors are facing losses while hundreds have closed their businesses. Hundreds of conversion outlets have left thousands of people unemployed. La ck of p r ope r p la n ni n g a n d supervision, disregarding principle of demand and supply, rapid growth amid gas shortages, absence of guidelines for min imum distan ce between CNG stations, dipping price differential between gas and petrol, unilateral decisions and increasing cost of doing business have contributed towards the decline, Dr Murtaza Mughal, President

PEW said in a statement. Uneven distribution has resulted in concentrated number of pumps in some areas has ignited a price war and unfair practices. On the other hand, there are localities that lack adequate number of stations forcing people to wait for hours to get gas, he said. There are 319 CNG stations in Lahore while Karachi stands second with 302 pumps. There are 276 stations in Rawalpindi, 199 in Peshawar, 99 in Isl amabad an d 43 in Mans hara. Conversely, there are 12 pumps in Quetta, 22 in Khanewal, 72 in Multan and only two in Bhawalpur. There is a dire need to double number of CNG

stations on motorways. So far, almost Rs 177 billion has been invested in this sector excluding cost of land, 5900 licences have been issued, 3140 stations are operational providing chea p f uel to 2679 00 veh icles, employment opportunities to thousands, paying Rs 32 billion in different taxes to federal, provincial and district governments and saving $1.65bn of foreign exchange, he said. Dr Mughal said that speedy relocation of pumps backed by incentives could save this sector. The cost of relocation sans land expenditure range from Rs 1 to 2 crore per unit.-PPI

Cng stations in Pakistan Lahore

Karachi Rawalpindi Peshawar

Islamabad Multan Manshara Khanewal Quetta Bhawalpur 319

302

276

199

99 72 AUTOMARK | July-2010

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Focus on Transportation

35 CNG buses may resume operation soon The 35 CNG buses taken off roads a couple of months back after their tyres had worn out are expected to resume operation by the first week of July, an official said on last week. The city district government Karachi’s transport and communications chief, Iftikhar Kaimkhani, said the CDGK had launched the project in July last year with 50 CNG buses — 25 buses each on two routes, one running from Surjani Town to Tower and the other from Surjani Town to Korangi Crossing. He s ai d t he bu s oper ation w as outsourced to two contractors and Rs5.5 million a month was paid as a subsidy to them. A flat rate of Rs15 a passenger was charged as fare, which was received by the CDGK that paid for gas and other bills. The buses making six trips daily ran from 6am to almost midnight with a gap of 10 to 15 minutes. In the process they covered between 50,000 and 60,000 kilometres in the nine to 10 months of their operations, outliving their tyres an d coming to a g rin ding halt. Mr Kaimkhani said the tyres should have been replaced immediately, but owing to red tape the Rs7.2 million for tyres was released only a few days back. He said a lot of efforts had to be made to convince the finance officials that the CNG bus project was not a commercial ven ture and al l over the w orld governments subsidised loc al mass transit projects. He said since February no payment had been made to the operators. Besides, with 35 fewer buses on roads the income also fell and the gap between income and expenses widened to Rs60 million. He said efforts were being made to review the agreements between the CDGK and the operators — on the pattern of the agreement done with the operator running CDGK CNG buses on the Orangi TownClifton route — so that they be given the buses on a no-profitno-loss basis, obviating the need for CDGK subsidy payments.

The third route Mr Kaimkhani said the CDGK had bought 25 other buses and launched a third route — Orangi Town to Clifton — in February. The contractor was given the buses to operate and collect the fare. He said under the agreement the operator or the CDGK did not have to pay any money to each other. Sinc e the buses were CDGK property, the operator had to present a certificate from the bus company every two months that the vehicles were in good condition. He said the operator ran the buses and the CDGK just monitored the operations. Mr Kaimkhani agreed that the buses on that route were not punctual and did not observe the 10 to 15 minutes break between two buses. The operator did not take the buses to their terminal, near the Bilawal House in Clifton, and instead terminated journey at Lucky Star in Saddar though charged the full fare of Rs15. He said that one terminal of this route buses was in Orangi Town. The route

AUTOMARK | July-2010

passed through riotprone areas, forcing the operators to suspend service many a time. He said undue pressure was not being put on the operator as he was already facing losses, and might run away, leaving the commuters to suffer in t he abs enc e of th ose bus es. More 400 CNG buses Federal Minister for Environment Hameedullah Jan Afridi said on Monday that Karachi would soon have 400 more CNG buses on its roads as part of the government’s policy to pro mote an environmentfriendly public transport system, adds APP. He said this in a conversation with newsmen following a seminar on ‘Clean development mechanism’. He added that a subsidy of Rs700,000 was being offered to introduce clean and green transport. “A total of 800 CNG buses have been procured for the country and the required funds are being released by the State Ban k,” he told t he media. In reply to a question, he said the go ver nmen t ha d no t t ak en in to confidence transporters’ bodies about its scheme to introduce CNG buses. “I do not think they should have any objection to it as the field is open and they, too, can participate in the bidding,” he said. The minister was confi dent that the masses would appreciate the publicfriendly initiative that would offer clean, cost-effective and efficient transport. Answering another question, he said there was no scarcity of gas in the so u th ern p art s of th e cou nt ry. Mr Afridi said a foolproof mechanism was also being introduced under which every vehicle would require a thorough in s pection on a n an nua l bas is. The minister said his ministry was committed to facilitating industries keen to adopt clean development mechanism. Malaysian companies had shown a keen interest in investing in solid-waste management, he said answering another query......

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Focus on Economy

China opening trade doors to Pakistan Pakistan needs to boost exports as it seeks to contain its trade deficit, which in May was $1.60 billion, up from $1.09 billion a year earlier, according to the Federal Bureau of Statistic. The country's total trade deficit in the first 11 months of the fiscal year that ends this month eased to $13.88 billion from $15.31 billion in the corresponding period last year.

China has pledged to provide trade concessions to Islamabad that it is not getting from the United States and European Uni on, a ccor din g to a Pakistan government official after a visit to the country last week by Chinese Vice Pr ime Min is te r Zha ng Dejian g. At meetings with Pakistani officials in Is l am a b a d , Zh a n g ca l led f or strengthening economic and trade li n ka g e s t h r o u g h im p r o v e d transportation, communication and energy corridors. China has gi ven ass uran ces it wi ll provide trad e concessions that will have a positive impact on Pakistan's economy, Business Recorder reported, citing Federal Commerce Secretary Zafar Mahmood. The US and EU are not prepared to give trade concessions to Pakistan owing to the international economic recession, he said. Early this month, the European Union and Pakistan failed to come up with any

breakthroughs on liberalizing bilateral trade when they set out a five-year plan for improving ties boosting ties. EUPakistan trade has an annual turnover of about US$10 billion. Last week, US Ambassador to Pakistan Anne W Patterson led a delegation of Pakistani business leaders to the US to highlight the country's investment opportunities, The Hindu reported. Pa kist an's Mini ster of Sta te for Investment Saleem H Mandviwalla was also among the travelling group, the third such delegation visiting the US since April 2009 as part of the Pakistan Business Ambassadors Programme, the report said. Zhang's visit to Pakistan will lead to increased trade with China and more investments by China's public and private companies over the next 12 months, local analysts said. China is already challenging the EU and the US in the top-three ranking of Pakistan's largest trading partners as it has increas ed investment in numerous sectors, including port development, roads, railways, mobile telephony, communication technology, hydro and thermal power, mining, electronics, and nuclear energy. China has supported Pakistan in its goal

AUTOMARK | July-2010

of building a gas pipeline from Iran, a project agreed to this month, and has said it will build two new nuclear power plants, Chashma-3 and Chashma-4 in Punjab province, both moves over the strong opposition of Western countries, including the US. Pakistan needs to boost exports as it seeks to contain its trade deficit, which in May was $1.60 billion, up from $1.09 billion a year earlier, according to the Federal Bu reau of Sta tis tic. Th e country's total trade deficit in the first 11 months of the fiscal year that ends this month eased to $13.88 billion from $15.31 billion in the corresponding period last year. Under a free-trade agreement (FTA) of 2006, Ch in a an d Pak is t an ar e committed to increase bilateral trade from the current $6.9 billion to $15 billion in the next three to four years. The two countries have established a joint investment company for direct investment and joint ventures. Chinese Pre s ide n t H u Jin t ao in 200 6 inaugurated the Pakistan-China Haier Ruba Economic Zone (HREZ) in Lahore, the first industrial park outside China supported by the Chinese government and exclusively for Chinese investment. Under the FTA deal, China is committed to consider duty-free access into China for all products manufactured in the park. Vice Prime Minister Zhang met senior military figures during his visit last week and called for the development of common approaches to secure common strategic and economic interests. Zhang continue on next page

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Focus on Economy

Under a free-trade agreement (FTA) of 2006, China and Pakistan are committed to increase bilateral trade from the current $6.9 billion to $15 billion in the next three to four years. The two countries have established a joint investment company for direct investment and joint ventures. Chinese President Hu Jintao in 2006 inaugurated the Pakistan-China Haier Ruba Economic Zone (HREZ) in Lahore also visited the head office of ZONG, the first venture outside China of the coun try's lea ding mobile p ho ne operator, China Mobile. Wi th an investment to date of $1.6 billion in Paki stan , ZONG is expand ing its network in all four of the country's provinces. The China Council for Promotion of Intern ational Trade (CCPIT) and Paki stan's Federation of Paki stan Chambers of Commerce and Industry (FPCCI) have also entered an agreement to foster bilateral economic cooperation. Tariq Sayeed, a former president of FPCCI, and Li Jiashou, CCPIT executive vice chairman and chairman of the CCPIT sub-council in southern Yunnan p r o v in ce , r e ce n t ly s i g n e d a memorandum of understanding in the Yunnan capital of Kunming, according to the Dawn newspaper. The two sides aim to upgrade efforts to promote trade and investment and to in volve t he ir go v ern men t s an d enterprises to strengthen contact at the p ubli c an d privat e sector level. Zhang's visit comes at a crucial time for Pakistan-China trade, which has been hit hard since a landslide early this year closed the Karakoram Highway. The road connects China's Xinjiang region with Pakistan's Gilgit-Baltistan and is a vital cross-border trade link. Due to a lake developing behind the landslide, traders had to evacuate Sos t, the Chinese-built dry port on the Pakistani side of the border. The facilities at Sost have proved a boon in helping to facilitate customs clearance and other formalities for goods crossing between

Is la maba d, m ay be s ens itive t o Pakistan's desire for civilian nuclear cooperation in the wake of the sweeping US-India nuclear deal," said a report released by the Carnegie Endowment for International Peace in Washington. The US administration, however, might object to it inside the Nuclear Suppliers G r ou p , w h ich ov e r s ee s s u ch transactions. These objections, however, "cannot prevent China from exporting the reactors," the report added..... the two countries. In the nuclear sector, China has so far been the onl y country wi lling t o cooperate with Islamabad. Chinese companies, as announced in April, are to build at least two new 650-megawatt reactors at Chashma over the next seven years. These could prove central to Pakistan's long-term efforts to overcome energy shortages that cause widespread and prolonged power blackouts. China began building a reactor at Chashma in 1991 and broke ground on a second one in 2005, which is expected to be completed next year. The Chashma-3 and Chashma-4 nuclear power plants are being built by Pakistan Atomic E ne rg y Commis si on an d Ch in a Zongyuan Engineering Corporation. Washington is concerned over the security risk of nuclear materials in Pakistan, where the Taliban movement is waging a bloody offensive, but has been restrained in the level of its criticism. "President Barac k Obama will not openly criticize the Chinese export because Washington, in the context of a bila teral security dialogue wi th

Vist our website www.automark.pk AUTOMARK | July-2010

Tractor units urged to adjust GST in selling price As the vendors are not getting the sales tax reimburs ements pai d on th e components supplied to the tractor mak ers, Pak ista n Ass ociation of Automotive Parts and Ac cessories Manufacturers (PAAPAM) has asked the tractor industry to increase the rates of components by 16 per cent supplied by vendors and adjust the same in the selling price. PAAPAM said that before closing down the units indefinitely, tractor makers should increase the component rates as it would compensate for the sales tax, which has become no n-refundable. In separate letters to Al Ghazi and Millat Tractors, PAAPAM chairman Tariq Nazir said that non-payment the GST refund has resulted in erosion of total working capital of the vendors that has been depleting at the rate of 16 per cent for every supply made. He said that the purchase orders given to the vendors were exclusive of sales tax and this liability does not lie on the vendors. He urged the tractor makers to adjust GST into selling price until sales tax refun d issu e is no t res olved .. ...

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International Automotive update

Car sales surge in India The rise was driven by passenger vehicle sales, which logged a 63 per cent increase to 27,811, said the company, which makes the world’s cheapest car, the Nano. India’s carmakers said on Thursday that sales for the month of June were strong, underscoring consumer demand and industrial growth in Asia’s thirdlargest economy. India’s top carmaker Maruti Suzuki said sales jumped 17 per cent last month compared with the same period a year ago while Ford India, Tata Motors and General Motors all also reported a sharp surge. Car sales in India had tumbled in 2008, hit by higher loan costs and fears of job cuts amid the global financial crisis. But go vernment stimulus steps and an economic turnaround led to a recovery in the sector in 2009. And analysts see sales remaining strong a s t he econo my picks up p ac e. “There was pent-up demand for cars which has overflowed into this year,” said Mahantesh Sabarad, senior analyst at Fortune Equity Brokers. India’s economy has expanded by 8.6 per cent year-onyear in the most recent financial quarter and Indian banks are still lending readily. However, carmakers are hiking the price of their vehicles to compensate for the

increased cost of raw materials such as steel and rubber, while the government also announced rises in the price of petrol and diesel last week. Japanese-owned Maruti Suzuki India said it sold 88,091 vehicles in June, up from 85,109 the same month a year ago but down from a record 102,175 units in May, a fall attributed partly to a plant maintenance shutdown. Low automobile penetration in India, where many consumers are buying their first cars, is expected to keep the market so lidly underpinned and make the nation a lucrative destination for global automakers in coming years. India remains a highly under-penetrated market with about eight cars per 1,000 people compared with around 850 vehicles per 1,000 people in the United

States, according to industry estimates. The country’s largest commercial vehicle maker, Tata Motors, said it sold 67,730 commercial and passenger vehicles in June, up 49 per cent on the same period last year. The rise was driven by passenger vehicle sales, which logged a 63 per cent increase to 27,811, said the company, which makes the world’s cheapest car, the Nano. Sales of commercial vehicles, including trucks, climbed 33 per cent to 26,245 units. Bucking the trend was Hyundai India, the country’s second-largest carmaker, which said its sales fell 2.14 per cent to 46,254 in June. Ford India said sales jumped a massive 267 per cent in June to 7,269 cars, led by its popular Figo model.General Motors India said it sold 9,539 cars, up 112 per cent from a year earlier, led by the Chevrolet Spark and the newly launched Chevrolet Beat. Meanwhile, TVS Motor, the third-largest two-wheeler maker by sales, announced a 36pc year-on-year jump in June to 156,685 units.—AFP

STEVTA DELEGATION VISITS HINOPAK MOTORS On June 17, 2010 Mr. Abdul Wahid Uqaily, Managing Director of the Sindh Techni cal Education and Vo cation Tr a in in g Au t h or it y (S TE V TA) accompanied with senior officials of STEVTA paid a visit to Hinopak Motors. Initially, a meeting was held with Mr. Muhammad Irfan Shaikh, Director Sales and Marketing. Later, Mr. J. Pereira, Deputy General Manager, Customer Serv ices an d Tra ini ng took th e delegation around the Body Plant and showed them the various versions of buses being built by Hinopak Motors.

T he M D o f STE VTA a nd the delegation appreciated the efforts made by H i n o p a k Motors in the designing of bus b o d i e s , Seen in the photograph is Mr. J. Pereira, Deputy General especially t he Manager, Customer Services and Training accompanied safety features with Mr. Abdul Wahid Uqaily, Managing Director of STEVTA in cor p ora t ed int o t h e along with the delegation of STEVTA and other members of Hinopak Motors. buses..... AUTOMARK | July-2010

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International Automotive - Recall update

Toyota to Recall Lexus Models to Fix Engine Parts The recall is due to defective parts of valve springs, which may result in abnormal noise or idling. In a worst case, the engine could stop Toyota Motor said last week it would recall 270,000 vehicl es wo rldwide because of an engine fault affecting cars including its luxury Lexus range and Crown sedans, in the latest blow to its reputation. The world's largest automaker said faulty valve springs in certain engines could potentially lead to affected vehicles stopping while in operation. It plans to submit a recall notice to Japan's transport ministry, with the latest action affecting 90,000 units in Japan and 180,000 overseas, most of them in the United States. "The recall is due to defective parts of valve springs, whi ch may result in abnormal noise or idling. In a worst case, the engine could stop," said Toyota sp okes wo ma n R ir iko Tak eu chi . Toyota has been hit by a series of safety recalls and has pulled around 10 million vehicles worldwide since late last year, mostly due to acceleration problems.

Toyota's latest announcement comes as the company looks to improve its recall process following heavy criticism of the way it handled safety issues in the United States that have been blamed for more than 80 deaths. Company president Akio Toyoda in June apologised to shareholders for the recall crisis, saying he thought he might have to resign when he was hauled before a US congressional hearing in February. Toyota Motor Sales USA said about 137,000 of the 180,000 units abroad would be recalled in the United States and advised customers to contact their local dealer. The beleaguered automaker said that defective 4.6-litre V8 and 3.5litre V6 engines were installed in eight models including some hybrids - the Lexus GS350, GS450h, GS460, IS350, LS460, LS600h and LS600hL as well as Crown sedans. Toyota said it had not received any reports of accidents or injuries related to the fault.

AUTOMARK | July-2010

Toyota paid a record 16.4-million-dollar fine to settle claims it had hidden gas pedal defects in the United States, and US officials have refused to rule out the possibility of more fines as they review thousands of internal papers.-AFP

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www.automark.pk

July-2010 AUTOMARK | July-2010

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Car / Light Vehicle Price List

SUZUKI

HONDA

Model MEHRAN VX 800cc MEHRAN VX (CNG) 800cc MEHRAN VXR MEHRAN VXR (CNG) ALTO VX 1000cc ALTO VX (CNG) ALTO VXR ALTO VXR (CNG) SUZUKI SW IFT 1.3L PETROL CULTUS VXR CULTUS VXR (CNG) CULTUS VXL CULTUS VXL (CNG) LIANA 1.3L RXI MT PETROL LIANA 1.3L RXI MT (CNG) LIANA 1.3L LXI MT PETROL LIANA 1.3L LXI (CNG) LIANA 1.6L Eminent AT RAVI PICKUP ST308R VX RAVI PICKUP ST308R VX CNG BOLAN VAN Petrol VX BOLAN VAN VX CNG BOLAN VAN VXR BOLAN VAN VXR CNG SUZUKI VAN CARGO

Price Rs. 433,000 Rs. 479,000 Rs. 488,000 Rs. 532,000 Rs. 556,000 Rs. 614,000 Rs. 635,000 Rs. 684,000 Rs. 1058,000 Rs. 816,000 Rs. 857,000 Rs. 865,000 Rs. 912,000 Rs. 1,114,00 Rs. 1,184,000 Rs. 1,165,000 Rs. 1,229,000 Rs. 1,230,000 Rs. 453,000 Rs. 504,000 Rs. 512,000 Rs. 564,000 Rs. 578,000 Rs. 631,000 Rs. 478,000

CHEVROLET Model CHEVROLET JOY CNG CHEVROLET JOY Petrol

Price Rs. 569,000 Rs. 539,000

NISSAN CARS Model Sunny Ex-Saloon 1.6L M/T Sunny Ex-Saloon 1.6L CNG S. Super Saloon 1.6L M/T S. Super Saloon 1.6L CNG S. Super Saloon 1.6L A/T NISSAN S. S. Saloon 1.6L A/T CNG

Price Rs. 1,225,000 Rs. 1,305,000 Rs. 1,370,000 Rs. 1,450,000 Rs. 1,470,000 Rs. 1,550,000

NISSAN DIESEL TRUCKS

Diesel Truck PKB 211 Diesel Truck PKD 411H Diesel Truck PKD 411E Diesel Truck PKD CD 411 Diesel Prime Move r CWM 454

Rs. 3,000,000 Rs. 4,150,000 Rs. 4,260,000 Rs. 4,600,000 Rs. 5,500,000

Model ACCORD ACCORD CR-V CITY I-VETC MT CITY I-VETC AT CIVIC VTI Mt CIVIC VTI Mt Oriel CIVIC VTI Pt CIVIC VTI Pt Oriel

HYUNDAI

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

Price 5,866,000 5,316,000 1,259,000 1,389,000 1,629,000 1,804,000 1,749,000 1,879,000

TOYOTA COROLLA Model XLi 1.3 VVTi GLI 1.3 VVTi 2.OD 2.OD SALOON 2.OD SAL SUNROOF ALTIS 1.8 VVTi M/T ALTIS 1.8 VVTi A/T

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

Price 1,300,000 1,426,000 1,358,000 1,713,500 1,799,000 1,713,500 1,799,000

CHERY QQ Model

Price

CHERY QQ Petrol CHERY QQ CNG

Rs. 588,000 Rs. 628,000

LAND ROVER

DAIHATSU Model Price CUORE CX Rs. 6,70,000 CX ECO (CNG) Rs. 7,15,000 CX AUTOMATIC Rs. 7,49,000

Model DEFENDER (90 S/WJEEP STD) (110 S/W A/C) (90 Soft Top)

MASTER Model Master Highland M-260 (1,5T) Master Forland Super M-330 (3T) Master Econg M-390 (3.5T) Master Grande M-410 (4.5T) Master Rocket Faw (7.5T) Master Feng EQ 1032 Strip Chassis Master Feng EQ 1061 Strip Chassis

Price Rs. 625,000 Rs. 699,000 Rs. 930,000 Rs. 11,30,000 Rs. 12,60,000 Rs. 832,000 Rs. 832,000

Price updated July’ 2010

Price Rs. 2,269,431 Rs. 2,545,000 Rs. 2,150,260

Corporate Event

Distributor Appointment Ceremony by Pakistan Lubricants (Pvt) Ltd.

Representative of Razzy Industries Mr. Junaid and Mr. Usman are presenting 70cc motorcycle to the winner of campaign ‘JEET KA JISHAN’, while Mr. Yasir Jawed, Director Marketing, Junaid Umer Manger Media and Faheem Uddin DBM of Pakistan lubricants also seen in the picture. Management of the Pakistan Lubricants (Pvt) Ltd., arranged a distributor appointment ceremony on 25th June 2010 at Rangoonwala hall in Karachi. A large number of distributors, guests and media attended the ceremony while major newspapers covered the event very promptly. Pakistan Lubricants (Pvt) Ltd., is the only Pakistani lubricants company which have a strong distributor network sinc e the las t 40 years across the country. Now they have appointed 10 new distributors for Karachi. Mr . Fa h ee m Ud din , Bu s in e ss development manager gave a detailed

presentation about the company’s marketing strategy and product’s technical specification for the dealers and guests. While Mr. Abu Sufian B.D.M. Punjab also gave a brief history of the company and distributors network in Punjab province. Director marketing Mr. Yasir Jawed, said that Pakistan lubricant is the only Pakistani company that has a long history of serving the country for the last 40 years and he is willing that his company becomes no.1 in the near future. He also appreciated the staff members of the company and said that without their hard work the company

AUTOMARK | July-2010

cannot reach the highest place in the local lubricant market. At this occasion M/s. Razzy Industries a s se mb ler of fa m ous b ra n de d motorcycle HI-SPEED presented 70cc motorcycle to Asim Rafiq, winner from Karachi. This was a part of a recent campaign ‘JE ET KA JISHA N’ by Pak is tan lubricant, Razzy Industries were the co-sponsor an d th ey h av e a lr ead y g iven 3 motorcycles to the lucky winners in Punjab since this campaign while more many more bikes will presented to the lucky winners in future....

Launching Ceremony

Byco launches new brand identity The company has planed to re-brand its retail business and aims to become one of the country's largest integrated oil companies, having its own refinery and a petrochemical complex Byco Petroleum Pak ist an (B PP) (formerly known as Bosicor Pakistan Limited), has planned to launch Byco brand lubricants (BBL) for both the automotive and industrial sectors. Thi s was ann ounced by President Petroleum Marketing Business (PMB) Kalim A Siddiqui while addressing the participants of recently held launching cer emon y of n ew By co br an d. He said the company has planed to rebrand its retail business and aims to become one of the country's largest integrated oil companies, having its own refinery and a petrochemical complex, he added. Siddiqui said that the existing stations will be transformed into state-of-theart and modern retail outlets across Pakistan providing customers wi th exclusive and exceptional experience in terms of convenience and enhanced service at all touch points. The new outlets will be fully equipped to provide unique experience in terms of fuel and non-fuel related services that will be one of their kind in Pakistan, shunning the concept of retail outlets as bein g mon otono us an d jaded. He said the Byco outlets will have around 130 by end June and add considerable outlets in the next fiscal year to consolidate company's market position in major geographical locations of the country from Karachi to Kashmir. He claimed that Byco was the only OMC growing at a staggering rate of 206 percent, its retail sales grew by 343 percent as compared to last year and the turnover jumped by 286 percent against last year. He further said the company has acquired UTPL terminal in Keamari and increased supply locations all across the country to ensure supply of products to customer at their doorstep. BPP has also obtained access to white oil pipeline for upcountry supply of

providing innovative fuelling and energy solutions to its customers within and outside the country, he maintained. "Byco has taken over 2.0 percent of the market share as compared to 0.8 percent last year. The company will soon have to its credit the larg est refinery in Pak is tan. Currently there is a 30,000 barrels per day refining facility established along the coast of Balochistan which will be greatly augmented by having another refinery with a capacity of 120,000 (bpd) in clos e proximit y to its exis ting refinery.-PR locally refined products along with the imports. It carried niche marketing of ultra winterized diesel for exports, he said. BPP has also planned to launch LPG dispensing facility at its outlets to provide greener energy options to cus tom ers an d cr eat e a bet te r environment in the country, he noted. Minister for Petroleum and Natural Res ources Syed Na vee d Qa ma r apprecia ted t he compa ny for its unprecedented progress and said that the government will facilitate investors that are bringing investment in oil and gas sector. He said that new prici ng polic y to prevent misuse of in lan d freight equalisation margin (IFEM) will be announced soon to benefit both OMCs and the consumers. Minister said that government was encouraging investment through public private partnership and more incentives will be given to investors. Speaking on the occa sion, Aamir Abbass i, Chairman, BP P, said the company is working to upgrade its rank as third largest oil marketing company (OMC) in near future. The company has maximized its thrust on customer reach, market share, AUTOMARK | July-2010 42

Byco’s market share jumps to 2.1pc The overall market share of Petroleum Marketing Business (PMB) of Byco Petroleum Pakistan Ltd (BPPL) in petrol, diesel and furnace oil segments has jumped from 0.8 percent in 200809 to 2.1 percent in 2009-10. This was stated by the president PMB of BPPL, Kal im A Siddiqui while talking to reporters at an exclusive meeting. He said that during one year, PMB’s sales have surged by 216 percent rising from Rs 6.7 billion in 2008-09 to more than Rs 26 billion. “We have taken over some market share of PSO, Shell Pakistan and Chaveron with the help of our aggressive and innovative marketing strategy”, he said. Siddiqui said that his company will continue to take more market share with the help of niche marketing and price competitiveness which means more va lue a dded pr od ucts , multiple dispensers for multiple products. He said 23 more out lets will be added to company’s network by the end of current fiscal year making a total of 130 pumps all over the country. We will further expand this network next fiscal year.

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Automotive sector update

Students of team U.E.T. Lahore, with the car 'HATTAF' for Shell Eco marathon sponsored by Ravi Automobile (Pvt) Ltd.

AUTOMARK | July-2010

Article by Shahzad Tabish

(Powering up the world of tomorrow utilizing Hydrogen as Fuel)

The Future of Fuel ! Is the Smallest Molecule Eyeing the near future, amongst the technologies that intend to power energy necessities for the world of tomorrow, Hydrogen being the most abundant element will surely play a vital role as a fuel

Amongst t he basic necessit ies of mankind transportation has remained amongst the top priorities. In the world of today automobiles & locomotiv es se rve th e n eed of transportation. As we all know; the myth of free energy is yet to be proved so, everything requires an input energy of some kind to derive the output. Likewise an Automobile of modern world utilizes an internal combustion engine (ICE) that may have a Spark ignition (SI) or Compression ignition (CI) configuration & this engine in turn utilizes the fuel to bu r n p r odu cin g s h af t en er g y. The conventional IC engines are not only utilized in automobiles but also in power generation sector to produce electrical power. The fuel utilized in an IC engine is the

fossil fuel. The reserves of fossil fuel are deteriorating rapidly due to the intensive & increasing demand of power in the modern world. Lessons learned from the past teach us that those who do not keep an eye on the future do not prosper. Today’s world is keeping a close eye on the future of fuel crisis, i.e.; when the reserves of fuel run out; whether we will find a substitute of It.? When we consider the propulsion of vehicle in the world of tomorrow, we may be abl e to find many future technologies implementable & practical for the world that will exist tomorrow, but talking about today & the near future the proposed future technologies find limited or no use because of being impractical due to factors such as cost & unavail abili ty of the technology. Alternate Energy Sources: Electrical energy & the use of batteries to produce mechanical energy is one of the major resources behind the use of solar energy & wind turbine but the discrepancy associated with the storage medium of electrical power is that the rate of charging the storage medium, i.e. batteries is not sufficient enough due

AUTOMARK | July-2010

to the rapid usage of the stored energy. In short the ra te of charging is much less th an the rat e of di s c h ar gi n g & therefore much work is needed to be done in this sector. Shahzad Tabish Some propose using the Bio fuels extracted from plants to be blended with the conventional fuels. However the recent food crisis has clearly indicated that the world of tomorrow won’t find sustainability on the dependency of Bio fuels. Coming to hydrogen, which is the most abundant molecule in the universe, there are two possibilities of usi ng the liquefied hydrogen as fuel.

1. Using Hydrogen in fuel Cell units 2.Using Hydrogen in IC engines Use of Hydrogen in fuel cell vehicles for example in Honda FCX Clarity has been successfully done showing the potential of fuel cells in the future but due to the uncommon technology & the usage of costly materials such as Platinum to make the fuel cell the cost of this techn ology is very hi gh when we consider present situation. Utilizing Hydrogen as a SI engine Fuel: When we consider liquefied Hydrogen powering up the IC engines comprising of SI configuration we can highlight many positive aspects such as the use of current technology implementing a continue on next page

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Automotive sector update

Monorail system in twin cities shortly, says RCCI Rawalpindi Chamber of Commerce and Industry (RCCI) in collaboration with Capital Development Authority (CDA), private tra nsport compan ies a nd Mini stry of Railways would shortly launch a monorail system in the twin cities as a joint venture, said RCCI President Kashif Shabbir while talking to journalists at his office on Tuesday. He said another project was also on the cards to launch a CNG bus service with the collaboration of Government of Punjab to facilitate the commuters and reduce pollution in the city. Sahbbir said the monorail system in Rawalpindi and Islamabad was their top priority, as traffic jams in the city due to heavy traffic load on the roads of Rawalpindi, especially Benazir Bhutto Shaheed Road, had become a routine. He said everyone in the city, whether he belonged to business community, an employee or student, has to hang out in time-

consuming traffic mess at least once in a day. He said the business community was particularly suffering to a great deal as transportation of goods between the twin cities had become so hard that after closing their shops they had to spend whole night at their business places to load or unload the goods. Shabbir said the Punj ab go vernment transport secretary had invited the businessmen community of the region to invest in the CNG bus service, as a joint venture with the government. In this regard the government has also ensured to provide 20 percent equity to all investors, he added. Replying to a question, he said the monorail project would not only enhance the business activities in the region but also help decreasing traffic burden on roads. â&#x20AC;&#x153;RCCI would extend full support to the Punjab government in t hi s con nect ion , â&#x20AC;? he ad ded .

Tractor units urged to adjust GST in selling price As the vendors are not getting the sales t ax reimbursement s pa id on the components supplied to the tractor ma ker s, Pak is tan Associa tion of Automotive Parts and Acc ess ories Manufacturers (PAAPAM) has asked the tractor industry to increase the rates of components by 16 per cent supplied by vendors and adjust the same in the selling price. PAAPAM said that before closing down the units indefinitely, tractor makers should increase the component rates as it would compensate for the sales tax, which has become non-refundable. In separate letters to Al Ghazi and Millat Tractors, PAAPAM chairman Tariq Nazir said that non-payment the GST refund has resulted in erosion of total working capital of the vendors that has been depleting at the rate of 16 per cent for every supply made. He said that the purchase orders given to the vendors were exclusive of sales tax and this liability does not lie on the vendors. He urged the tractor makers to adjust GST into selling price until sales tax refund issue is not resolved.

Use of Hydrogen in fuel cell vehicles for example in Honda FCX Clarity has been successfully done showing the potential of fuel cells in the future but due to the uncommon technology & the usage of costly materials such as Platinum to make the fuel cell the cost of this technology is very high when we consider present situation new fuel for combustion. The use of current technology allows us to maintain the cost as it is in mass production & is ideal. The modifications necessary w ould on ly improve the cost of developing the engines to 1.5 times of the net cost. However everything comes with its disadvantages similar is the case of Hydrogen as an IC engine fuel. The calorific value of Hydrogen as compared to Octane is much less hence it reduces the output of the engine by 40-50%. Also we know that Hydrogen is a fragile & highly flammable fuel, if mishandled

or ignited in an uncontrolled manner it may blow up the entire combustion chamber. Automobiles utilizing Hydrogen in for their engines have been successfully tested these include BMW Hydrogen 7, utilizing its V 12 reciprocating SI engine it can operate on both Gasoline & hydrogen & produces an identical output for both fuels. Mazda recently tested their Mazda RX-8 Hydrogen RE & Premacy vehicles utilizing the Wankel Rotary SI engine. The Wankel engine also utilizes both gasoline & Hydrogen for combustion but the output reduces AUTOMARK | July-2010

by 50% in the case of utilizing Hydrogen for combustion. Environmental issues are one of the major concerns of the world of today. Hydrogen when combusts only gives water as a bi-product so Environmental engineers wont find an issue with this fuel. Concluding here I would like to say that eyeing the near future, amongst the technologies that intend to power energy necessities for the world of tomorrow, Hydrogen being the most abundant element will surely play a vital role as a fuel.....

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Focus on Automotive History

The Rise of Toyota A brief history of the Japanese automaker 1958

1997

Toyota is the world's largest automaker, but its road to success has been long and fraught with speed bumps. The company's first foray into the American market was the Toyopet in 1958. It was a flop.

Toyota debuted their Prius gas-electric hybrid car.

1986 The National Highway Traffic Safety Administration ordered its first recall of Toyota cars due to "speed control" problems.

2002 The first consumer complaints emerged of the Camry's engine surging under braking.

1964 Toyota introduced their Corona line of automobiles and sales hit 6,400 in 1965, marking an increase in popularity.

1988 The First North American Toyota plant opened in Georgetown, Ky.

2004 The NHTSA opened a defect investigation into 2002-2003 Camry, Camry Solara and Lexus ES models.

1969 Toyota began importing the Corolla and in 1985 it would become the first Toyota built in the U.S.

1989 Toyota introduced the Lexus LS 400, the company's first U.S. luxury car. It was a major hit.

1975 Toyota surpassed the popular German brand Volkswagen to become the top import sold in the U.S. AUTOMARK | July-2010

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Focus on Automotive History

2006 Toyota "Americanizes" and opened a new plant in Texas to build full-size pickups.

2007 Toyota surpassed General Motors to become the world's largest automaker.

Jan. 2010 Toyota recalled approximately 2.3 million more vehicles with potential sticking pedal problems. On Jan. 26, Toyota stoped selling eight models involved in the recall.

2007 The NHTSA investigated pedal entrapment in some Toyota vehicles, which led recalls of floor mats on Camry and Lexus models.

Feb. 2010 Prius and Lexus hybrids are now being recalled for brake problems in 2010 models.

Aug. 2009 An off-duty California Highway Patrol officer and three family members were killed when their rental 2009 Lexus ES speeds out of control.

Nov. 2009 Toyota recalled 3.8 million Lexus and Toyota models to remove floor mats that can trap pedals.

AUTOMARK | July-2010

Exclusive report by Automark

Shell Eco Marathon flagged off in Malaysia with largest Pakistani participation 10 of 20 couldn’t make it to the track, and only 1 car mentioned in the last 27 K UA L A L U MP U R , Ju ly 1 0 (AUTOMARK): Pakistan was the largest contingent with twenty (20) cars in the Shell Eco-Marathon Asia 2010 flagged off in Kuala Lumpur, Malaysia on July 8,2010. Malaysia and Thailand with 19 and 13 teams was the 2nd and 3rd largest contingent taking part in the race. Malaysian Minister for Energy, Green Technology and Water, Peter Chin Fah Kui durin g his inaug ural speech acknowledged the largest participation from Pakistan and said that Shell Eco Marathon will certainly help in creating fuel efficient cars with minimum emissions to contribute in global efforts to preserve fast deteriorated earth environment. In all, twenty Pakistani players were competing with eleven Prototype cars and nine Urban Concept cars driven with Gasoline, capable of running a top speed of 30 to 35 km / hour with fuel efficiency of 250 to 330 kilometer per one liter of gasoline. There are 72 players from ten (10) countries, including China, Indonesia, India, Iran, Japan, Malaysia, Philippine, Singapore and Thailand. The participants from Pakistan included te a ms f rom G IKI In s t itu t e of Engineering, Science and Technology, NED University of Engineering and Technology, College of Electrical and Engineering Karachi, Pakistan Navy Engineering College, Air University and National Uni versity of Science and Technology. Out of total of eighty two (82) competing vehicles, 77% were Prototype category and 23% were Urban Concept cars. They will be using seven (7) types of fuel including Ethanol, gasoline, hydrogen, liquefied petroleum gas, solar, fatty acid methyl ester and diesel.

Shell Eco-Marathon challenges the High School and College students fro m around the world to design, build and test energy efficient vehicles in various events held globally with Malaysia being the first country to host Asia series. Results Our correspondent in Malaysia reported that in the urban category the top three cars clocked the following efficiency: 1st 238 km/liter 2nd 62 km/liter 3rd 51 km/liter Misfortunes of the Pakistani teams Our correspondent reported that since Pakistani teams participated for the second time there were many mishaps, due to which Pakistani could only sport a lackluster performance. Firstly, the cars were transported to Malaysia in an unprofessional way that is why many cars couldn’t survive the trip. The cars were packed in normal cartons , and they were packed by professional way, and during the journey they were mishandled by the labors and hence were ruined. One of the Pakistani cars was completely crushed. That is why 10 out of 20 Pakistani cars were unfit for the competition. One team had their brakes damaged, many of them worked (try to re-fix) on the car for three days straight but couldn’t fix it. As per AUTOMARK | July-2010

sources representative of Shell Pakistan refuse to provide them any technical assistant while they went specially for this event from Pakistan. Hence the poor teams never came to the track after so much hard work. Secondly, there were very few sponsors for the Pakistani teams, that why many students paid for the construction of t he ca rs an d t rip th ems elve s. Thirdly, there was no coherence or organization between the teams of same university or city. The new comer teams did not take any advice from the more experienced teams that went before them, the universities or Shell did not help either, the new comers were all on their own. Fourthly, Pakistani teams faced a major drawback that not a SINGLE team made it to the opening ceremony as all the cars were deemed unfit to participate. The next day 10 out of 20 managed to fix their cars and participate. Fifthly, one Pakistani car called Ajiel (Team Pakistan) with a team from NED managed to score 72 km/liter which was more than the teams who finished 2nd and 3rd. But they were disqualified because they finished the round 1.5 minutes late than the official limit. Sixthly, in the final 27 names mentioned by organizers, only one Pakistani team was mentioned which was from GIK. No other Pakistani team was mentioned. No matter what happened there, "They weren't far from victory" - they need to organize in a better way MUST take away learning from here for the next year event, to be held in Malaysia as well. Next year Automark magazine will be present to cover the Eco-marathon throug ho ut jus t like thi s time...

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Pakistani participants at Eco Marathon

AUTOMARK | July-2010

MADE IN PAKISTAN MOTORCYCLES RETAIL PRICE LIST

70cc Motorcycle

Sr./ No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23.

Product & Model Name Aan AI-70 Asia Hero AH-70 Bionic AS-70 Champion CDI-70 Crown Lifan CRLF-70 Diamond SD-70 Dhoom YD-70 Eagle DG-70 Ghani GI-70 Guangta GT-70 Grace CT-70 Hero RF-70 Hero RF-70 Plus Habib HB-70 Honda CD-70 Hi-Speed SR-70 Jinan JN-70 Leader LD-70 King Hero KH-70 Moon Star MT-70 Master MD-70 Mehran SD-70 Metro Hi-Tech MR-70

Retail Price Rs. 42,500/= Rs. 38,000/= Rs. 38,000/= Rs. 37,000/= Rs. 38,500/= Rs. 38,000/= Rs. 45,300/= Rs. 38,000/= Rs. 39,500/= Rs. 41,000/= Rs. 36,000/= Rs. 46,000/= Rs. 47,000/= Rs. 41,000/= Rs. 62,900/= Rs. 40,000/= Rs. 38,000/= Rs. 37,500/= Rs. 36,500/= Rs. 38,000/= Rs. 36,000/= Rs. 40,000/= Rs. 42,900/=

Sr./ No. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46.

AUTOMARK | July-2010

Product & Model Name New Asia NA-70 Pak Hero PH-70 Ravi Premium R1 Ravi Road Prince RP-70 Royal Star RS-70 Royal RL-70 Racer AS-70 Safari SD-70 Sakai SK-70 Star DL-70 Sohrab JS-70 Sonica SM-70 Stahlco ST-70 Super Asia SA-70 Super Star SS-70 Super Power SP-70 Toyo TG-70 Target TT-70 Unique UD-70 Union Star US-70 United US-70 Zxmco ZX-70

Retail Price Rs. 38,000/= Rs. 37,000/= Rs. 47,000/= Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

38,000/= 39,000/= 42,500/= 39,000/= 40,000/= 39,000/= 39,900/= 41,500/= 42,400/= 36,500/= 39,500/= 39,500/= 38,500/= 36,500/= 38,500/= 41,000/= 42,000/= 38,000/= 40,500/=

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MADE IN PAKISTAN MOTORCYCLES RETAIL PRICE LIST

125cc Motorcycle No. 1. 2. 3. 4. 5. 6. 7. 8.

Brand & Model Name Habib HB-125 Sitara ST-125 Ghani GI-125 Hero RF-125 Honda CG-125 Honda CG-125 DX Metro MR-125 Ravi Storm-125 Euro II

Retail Price Rs. 88,000/= Rs. 55,000/= Rs. 52,500/= Rs. 75,000/= Rs. 84,900/= Rs. 106,900/= Rs. 55,500/= Rs. 78,000/=

Yamaha Motorcycle Product & Sr./ Model Name No. 1. Yamaha YD100 2. Yamana Yama4 3. Yamaha YB100 Royale

Retail Price Rs. 72,200/= Rs. 68,800/= Rs. 68,300/=

100cc Motorcycle No. 1. 2. 3. 4. 5. 6. 7. 8.

Brand &Model Name Asia Hero AH-100 Ghani GI-100 Habib HB-100 Honda CD-100 Sitara ST-100 Super Star SS-100 Super Power SP-100 Unique UD-100

Retail Price Rs. 46,000/= Rs. 45,500/= Rs. 55,000/= Rs. 69,900/= Rs. 51,000/= Rs. 46,000/= Rs. 45,500/= Rs. 52,000/=

Suzuki Motorcycle Sr./ No. 1. 2. 3. 4. 5.

Product & Model Name Suzuki Sprinter ECO Suzuki Sprinter STD. Suzuki GS-125 Suzuki GS-150 Suzuki Shogan

Retail Price Rs. 65,500/= Rs. 69,500/= Rs. 78,500/= Rs. 84,500/= Rs. 76,000/=

CDI MOTORCYCLE AUTOMARK | July-2010

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