Monthly Automark Dec 2012 by Mustafa Hanif

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Pakistanâ&#x20AC;&#x2122;s premier magazine on automotive, engineering & energy sector Monthly

AUTOMARK Strong trade ties with China

Editor M. Hanif Memon

KCCI representative has said that Pakistan and China can collectively do wonders as economic and commercial activities are now focused towards Asia. Technical Editor With Pakistan-China mutual cooperation, Muhammad Shahzad trade within the region and with Saarc, Advertising Manager ECO and Central Asian blocks can Haider Nawab Abdul Khaliq multiply manifold. Advisor Planning & Development Gao Xiging, President, China Investment Circulation Manager Toyota Southern Motors Corporation (CIC), the KCCI chief sought Tahir Siddiqui Toyota Defence Motors C h in e se i nve stme n t in e n er gy, Karachi Computer Operator i n f ra st r u c tu re , me t r o - ra i l w a ys , MurtazaHanif Muhammad Yousuf Shaikh masstransit and dams. Founder & Chairman Karakorum Highway is a remarkable Pakistan China Motorcycle Web Master Industry Council example of mutual cooperation and is Mustafa Hanif Karachi t h e s y mb o l o f fr i e n d s h i p a n d Abdul Majeed Sheikh understanding. The year 2011 was CONTRIBUTING IN President, celebrated as Pakistan-China Friendship THIS ISSUE AOTS-ABK Dosokai, Year, on 60th anniversary of Pakistan Haider Nawab Karachi Regional Center China relations. Ali Hassan Director Industrial Lesion, M. Yousuf Shaikh More than 11,000 Chinese engineers, NED University, S. Zaib Abbais Karachi technicians and workers are rendering M. Owais Khan services in progress and development David Engr. IHT Farooqui of Pakistan. General Manager Plant Chinese investment in Pakistan increased Karakoram Motors (Pvt) Ltd., Advisors Karachi manifold in key sectors, including port Syed Mansoor Rizvi development, roads, railways, mobile Principal Officer J. Pereira telephones, communication technology, M/s. CNH Services (Pvt) Ltd. Senior General Manaer Karachi After Sales Service and Parts hydro and thermal power, mining, Master Motor Corporation Ltd., electronics, and nuclear energy. Karachi A large number of Chinese companies are working in Pakistan in oil and gas, IT and telecom, power generation, The views expressed by contributing engineering, automobiles, infrastructure and mining sector. writers and comments do not Both the countries have free trade agreements which should be effectively necessarily reflect the views and explored for mutual benefit of both policies of the Monthly AutoMark friendly nations. magazine's management. China and Pakistan are great friends and Pakistan is one of the best friends of AutoMark REGD: SC-1330 China. Both the countries have been Published every month by M. Hanif Memon committed to develop closer bilateral Postal Address relations and further broaden their Active Communications economic engagement for achieving D-68, Block-9, Clifton,Karachi common development. Visit us: www.automark.pk Assistance Editor S. Zaib Abbasi

Advisors Imtiaz Rastgar CEO, Rastgar Group & CBI External Expert, Ex-chairman EDB Islamabad

E-mail: magazine@automark.pk automarkpk@gmail.com Tel : 021-32218526 Mobile: 0321-2203815

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CONTENTS

Monthly AutoMark PCMIC continue efforts for formation of Auto 13-15 Manufacturing Consortium Exclusive Article by M. Yousuf Shaikh, Founder & Chairman, PCMIC Duty on components of bikes reduced, APMA terms it “small cumin seed in a camel’s mouth.” An Exclusive article on motorcycle sector by Ali Hassan

17-18

Consumers’ interest sidelined over unfair protection to local assemblers Exclusive Article by M. Owais Khan

20-21

Are company mergers the only way 22-23 forward for the Chinese motorcycle industry? Exclusive Article by David McMullan from China for AutoMark Magazine Automotive Sector - Update

Invisible Force - Exclusive article 26 by Haider Nawab from Toyota Souther Motors China Automotive Industry - News Update 32-33 Local Assembled/Imported car price Paapam news update

Cabin Air Filter… a part provides breath of fresh air By Mohammad Shahzad from Canada

Trends in Pakistan road freight 40-41 industry 1985-2012 (An Overview Part I) by Sania Zaib Abbasi World’s Top 25 Car Markets down 0.5% in September 2012

Pakistani Assembled Motorcycle price list 43 CIMAMotor-2012 Photographs 46-47 CIMAMotor-2012 - Exclusive visit: www.automark.pk

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Exclusive Article by M. Yousuf Shaikh

Monthly AutoMark Magazine

PCMIC continue efforts for formation of Auto Manufacturing Consortium & Chinese investment with expertise could Help Pakistan Auto Industry to Design and Produce its own Motorcycles, engines & Small Cars Pakistan Chinese motorcycle manufacturers have an opportunity to make it possible to invest themselves & invite there Chinese counters parts to invest in auto manufacturing consortium Introduction-: Muhammad Yousuf Shaikh, the Founder & C h a ir m a n o f P a k is t a n C h i n a Motorcycle Industry Council, offers his a n a ly s is o f t h e motorcycle trade & i n d us t ry t re n ds from Pakis tan & China. The ch air ma n PCM I C w ork in g w it h motorcycle trade & industry for over two decades, Yousuf believe that Chinese investment could help Pakistan to design and produce its own automobiles mainly motorcycles engines as the Chinese & Indian motorcycle manufactures design & pro duce their o wn p rodu cts . Motorcycle Industry Require intensive investment & huge financial resources, PCMIC proposed plan to setting up an inventive research & development and p ro du c ti on fac ili ty t o p ro d u ce motorcycles and small engines at Sunder Industrial Estate Lahore. The result of this development could have profound im pli ca ti on s o n t h e Pa k is ta n ’s motorcycle industry over the next d ec a d e. T o r ea c h h im , em a il : pakchina.mic@gmail.com The Pakistan motorcycle industry has been around for more than 50 years, and today is considered an industry that is highly important to the Pakistan economy. The motorcycle industry employs an estimated 100,000 people.

O ver 2 million m otorcycles are manufactured annually, with negligible quantity being exported. All motorcycle assemblers cum manufacturers at present are Pakistani. But all Pakistan motorcycle manufacturers still depend on foreign technology and the country is still unable to design and produce its o w n m o to rc y cle es p ec ia lly th e motorcycle engines and key parts. This makes it difficult for the industry to develop and enhance the export volume to compete in international market. EDB’s offer to Chinese automobile manufacturers to avail themselves of investment opportunities in Pakistan’s auto industrial sector. As a two-member Chinese diplomatic team led by Zhou Zhencheng, Economic and Commercial Counselor met former CEO EDB here on few months ago, and CEO, EDB highlighted that opportunities exist in setting up a low price small car unit, manufacturing car sub-assemblies components presently imported and the setting up of a tractor assembly plant. The council’s takes initiative on the briefing of EDB to two member delegation of Chinese commercial consulate commercial section Pakistan and talk about the possibility of Chinese manufacturers to exploring the Pakistan Auto industry and taking forward the long term strategic agenda laid out in the reports that Pakistan must raise its game to compete for Chinese investment in automotive R&D and manufacturing.

To do that, the Pakistan’s Chinese vehicle manufacturers need an ever more strategic, collaborative relationship with the Government and to be working with the supply chain and other stakeholders to achieve long term goals. I want the Council to help make that happen.” The Motorcycle Industry Council will be an opportunity for the industry & government to work together on the long term strategic development of the sector because the Chinese Motorcycle manufacturers are also manufacture of economical small cars and van in China such as Chongqing Lifan Industry (Group) Co., Ltd, Chongqing Yinxiang Motorcycle Group Co., Ltd, Chongqing Shineray Motorcycle Co., Chongqing Yuan Group - China s upplier of Motorcycle, automobiles. Engineering Development Board (EDB) offered to assist Chinese manufacturers in finding local partners for them, and the government was interested to promote competition in the auto sector; a detailed presentation on automobile sector of Pakistan was given to the visitors and informed that Japanese car

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Exclusive Article by M. Yousuf Shaikh - continued

manufacturers have 100 percent share in the local car market against 45 percent in motorcycle sector. He informed them that Chinese share in motorcycle is 55 percent Referring to new entrants’ policy of the government, it was also explained by him that any manufacturer can invest in Pakistan under Auto Industry Development Program (AIDP) or the Tariff Base System (TBS). The incentive under new AIDP to facilitate new entrants should require promoting in China in several auto shows & exhibitions. The government should make the existing policy regime more flexible for the new entrants in order to attract foreign investment as amended policy is expected soon. The Chinese diplomat invited CEO, EDB to participate in auto shows so that you could personally interact with Chinese manufacturers. However, they assured that Chinese manufacturers would be persuaded to explore the Pakistani market. Pakistan’s Chinese motorcycle industry continues to see strong growth in terms of production and marketing are forcing the industry and investors to explore alternative opportunities, including working with international partners and e x pa ndin g int o re se a rch a nd d e v e l o p m e n t ( R & D ) s e r v ic e s . Pakistan producing millions of small-displacement motorcycles on an annual basis but there is no localization of major key parts & Research & development done by any player due to the race of production number game to become large producer by some local assemblers through simple trading with their Chinese counter part instead of technology transfer. The majority of the motorcycles being manufactured in Pakistan are the 70CC motorcycles. Most of the parts used in the frame, suspension, engine etc are interchangeable, or can be used with minor adjustments. Motorcycle production has increased from 100,000 units at the start of the

century, to around two million, almost two million motorcycle manufacturing c ou nt ry d on ’t ha ve th e tru e manufacturer of the key parts of motorcycles such as the complete engine, carburetor, Drive Chain, timing/cam chain, hundreds of engine separate components ( Cylinder Head, Ring Piston Set, ball Bearings, Bushes, Timing chain, crankshaft, and many other components ) and also the Handle switches, Lock Set, Wheels Hubs & B re a k s , C o m p l et e F r o n t R ea r Shorkabsorbers in dismantle condition and speedometer movements are 90% imported through different channels as there is no true manufacture in Pakistan. The engine is a core part of the motorcycle, and the demands for motorcycle engines are highly related to the demands for motorcycles. Motorcycle engine market has great potential as a result of the booming m ot or cy c le de m and s. Bet t e r performance motorcycle engines are needed due to the demand should shift from ordinary two-wheeled motorcycles to leisure and recreational two-wheeled motorcycles. Motorcycle engines are in the process of upgrading to low emission, low vibration, low noise and l ow h eat loa d e ng ines w i th displacements over 125cc. Along with the sales of three-wheeled motorcycles in Pakistan, demands for their engines are also growing fast. The three-wheeled motorcycle manufacturers in Pakistan also don't have the ability to produce threew heeled motorcycle engines, and technologies to produce such engines

PAKISTAN CHINA MOTORCYCLE INDUSTRY CONCIL

Monthly AutoMark Magazine

are different from those of two-wheeled motorcycle engine due to their exclusive features, so intern ational market demands will be satisfied by those manufacturers which have the R & D and abilities to manufacture the two, three-wheeled motorcycle engines. It is suggested that the EDB work together with PCMIC to identify these common parts for localization, based on production figures the total OEM market for these parts can be determined. In addition the replacement market demand can also be estimated at various price options. For those parts where critical volumes are available, the EDB & PCMI C s hould try an d fo ster “embedded” linkages between the services cluster group, Assemblers, ven dors, importers and banks as consortium that are willing to make the investment. Our motorcycle industry is divided into two markets. The mainstream market consists of manufacturers who are from overseas. The parts manufacturing companies that are Pakistani-owned or have major Pakistan shareholders are who depend on design and production technology from abroad. The other market is the niche market, consisting of SMEs producing Chinese motorcycles. In this market, most of the companies are Pakistani and products are sold domestically, where there is little foreign competition. Most of the players have not been utilizing much technology in terms of design, manufacture and engineering. Due to the importance of the Pakistan motorcycle industry, the Pakistan China Motorcycle Industry Council (PCMIC) has planning to set up a support programmed for Motorcycles and parts research and development under the industrial and services cluster group. This will enable specialized industries to have the capability to design and produce motorcycle engines and other parts which are still not indigenized in

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Exclusive Article by M. Yousuf Shaikh - continued

Monthly AutoMark Magazine

The majority of the motorcycles being manufactured in Pakistan are the 70CC motorcycles. Most of the parts used in the frame, suspension, engine etc are interchangeable, or can be used with minor adjustments. Motorcycle production has increased from 100,000 units at the start of the century, to around two million, almost two million motorcycle manufacturing country don’t have the true manufacturer of the key parts Pakistan. It will also help strengthen the niche market in the future and provide technology for design, production and engineering for Pakistan parts-makers in order to raise their capabilities. The PCMIC seeks the Strategic Planning Alliance in public private partnership that should targeted at stand-alone parts design and manufacturing. The project would intended to create an automobile platform for Pakistan that would be relayed to the private sector. The second phase of the project would also initiate for automobile and parts manufacturers, and the PCMIC teamed u p w i t h v a r io u s G o v e r n m e n t Departments like Military Vehicles Research & Development Establishment (M V R D E ) , M o ST , E n g i n e e ri n g Development Board (EDB) etc. With such a coordinated approach it will be possible to include, niche areas of interest to specialist Government Organizations in the development effort. Three areas would be targetable:a. The Motorcycle Engine market, as large number of the population u s e m o t o rc yc l e s f o r d a i l y transport and motorcycles are assembled locally but engines are 100% imported. b. Larger Sized Engines (200 cc and above) c. Af te r Sal es p art s market d. Small cars assembling In this connection I am willing to offer my services as Social entrepreneur and Chairman PCMIC for Pakistan as I feel my experience could make an enormous difference in Pakistan Motorcycle Industry, and thus ensure the success of this venture. As a pioneer of the Chinese Motorcycle trade & industry businesses in Pakistan, I was the first one to introduce economical high quality Chinese motorcycle by top Chinese motorcycle manufacturer to Pakistan in 2002. I trained many Chinese motorcycle manufacturing companies in China to design the 70cc and 125cc motorcycle for the Pakistan market. In a short time, there were several motorcycle importers

cum assemblers establishing the Chinese motorcycle assemblin g plants in Pakistan due to availability of suitable CKD parts by Chinese suppliers. As few years ago motorcycle assembling cum manufacturing was the dream of private ventures. But after the availability of good quality right parts in China and in Pakis tan with the h elp of Allah Rabbulizzat this dream has come true. My years of experience in motorcycle t r a d e & i n d u s t r y f lo u r i s h i n g development and launching of several new motorcycles in Pakistan, the Pakistan China Motorcycle Industry Council and their associates are committed to supporting entrepreneurs to develop emerging technologies that become the driving industries of the future. These efforts are supposed to facilitate the creation of numerous companies and thousands of jobs in Pakistan. I am looking for an opportunity to set-up a facility for a Pakistan motorcycle industry. I come with extensive experience of setting-up facility for Pakistan companies on a global sourcing motorcycles and engine manufacturing in Pakistan. My experience includes senior roles in product development, marketing and business management. I am the Founder an d Chairman of Pakistan China Motorcycle Industry Council, a Pakistan & China Motorcycle trader & Industrial group network for Pakistanis, Chinese and their friends. In addition to being a Pakistan & China motorcycle trade & industry watcher, an investor, business consultant and avid follower of the Chinese Motorcycle Trade & Industry markets, I have more than 20 years experience in the Motorcycle trade & industry. Being a Founder & Chairman PCMIC, I am working on to up an inventive research & development facility for Pakistan to Design & Manufacture Pakistan’s own motorcycles engines, small cars, vans and small trucks in public private partnership. I am kn own to all t op Chin es e motorcycle manufacturers with all

aspects of, international sales & purchase, establishing new channels, selection of right design vehicles for s pe cifi c m a rk et s , d ea lin g w i th import/export regulations, developing new models, finds real manufacturers as well as presenting at trade shows. It is with great optimism and interest that I take notice to promote the Pakistan Motorcycle industrial sector in China and to invite global Chinese manufacturers to established joint ventures in Pakistan. I believe there are several areas in which I could help Pakistan to strengthen Pakistani motorcycle Industry and Also help to export the made in Pakistan motorcycle in the international market. The PCMIC proposed plan to setting up an inventive research & development and production facility motorcycles engines at Sunder Industrial Estate Lahore to ensures that the council is able to provide a comprehensive development capa bility in t hes e important and interlinked market sectors. Engineers at the centre should be able to deliver turn-key motorcycles projects inc lud in g s mall en gin e programmed drawing and technology from across China. The proposed project has been carried out by China based Chinese Manufactures and Pakistan’s Chinese Motorcycle Assemblers through PCMIC in cooperation with MVRDE, Local parts Vendors and financial institute. The project could be co-financed by the all stake holders and by the government of Pakistan. The government is being requested to interest free loans & allow tax holiday for five years to this project. To design the cleanest possible engine within reasonable cost and performance constraints will require a “Team Ap proach ” a nd project requ ires intensive investment & huge financial resources. The support and guidance provided by the Government would be a great instrument for the phenomenal growth of this sector. SEND YOUR COMMENTS

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Monthly AutoMark Magazine

Automotive Sector - Update

Auto vendors portend Indian NTBs Pakistan manufactures good quality of tractors at 20 to 25 percent less cost than India does, he said adding Indian Punjab excels in manufacturing of quality textile machineries. Local auto part makers are optimistic about penetrating into the huge auto part markets of India as soon as it removes the nontariff barriers (NTBs) and the Pakistani tax authority improves its administrative control, said a leading auto parts exporter. “Indian government allows import of auto parts at five percent and therefore Pakistani auto part exporters enjoy an obvious advantage,” said Usman Malik, vice chairman of Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam). He told media that the major obstacle was NTBs practiced at the Indian side, adding visa regime despite protocol agreed between two countries is still very rigid. He said the custom appraisement on the Indian side is highly obstructive. “The custom authorities on both the sides of the Wagah border are short of proper testing laboratories,” he said adding that Indian testing laboratories are located mostly in the remote cities. Malik said the clearance of Pakistani goods on the Indian side of border is painfully slow. He s aid un less a mechanism to clear goods speedily as done at all other Indian custom posts comes into action, the exports from land route to India will stay insignificant. He cited an example of cement, which could not be exported in adequate quantity due only to the slow custom procedures. Although Pakistan imposes prohibitive

ta xe s on im p ort o f au t o p ar ts manufactured locally, inefficiency of the custom authority militates against the apparent advantage of high tax to local manufacturers. “Although the import duty was 50 percent, the inability of the Federal Board of Revenue (FBR) to prudently administer its customs wing to control imports of auto parts at rates lower than the prevalent one nullifies the duty advantage,” said Nabeel Hashmi, former chairman Paapam. Since this malpractice has been in vogue since long, Indian exporters may exploit it, he feared. “If that happens, it will devastate the auto parts manufacturing facilities in

Pakistan,” he warned pointing out that Indians enjoy the economies of scale and if they were allowed the same level of under invoicing as is being practiced by importers from far eastern countries, the local vending industry would vanish. Hashmi said it is imperative for the tax authority to put their house in order and evaluate the actual rates of auto parts instead of accepting the undervalued invoices for the duty evaluation. He also urged the auto part producers to improve their efficiencies within next three to five years as far as tariff structure between India and Pakistan stays put. Also, “we could sell tractor parts to India,” said Syed Mansoor Abbas, a veteran tractor parts manufacturer. Engineering sector in subcontinent is concentrated in Punjab on both sides of the border. He said the engineering belt of eastern and western Pun jab starts from Ludhiana up to Sialkot passing through Lahore and Gujranwala. Pakistan manufactures good quality of tractors at 20 to 25 percent less cost than India does, he said adding Indian Punjab excels in manufacturing of quality textile machineries. Abbas said while the most of car industry and its vendors are located in Karachi, vendors from north lead auto parts exports. He regretted that auto parts are booted out of the local after part market due to heavy under invoiced imports....

Tusdec launches research projects Technology Upgradation and Skill Development Company (TUSDEC) has launched sectoral research projects in order to facilitate the five manufacturing industrial clusters of Pakistan inclusive o f fa n s , s po rts g oo ds , s u rg ical instruments, plastic goods and 2/3

wheelers automobiles. According to a company spokesman, TUSDEC R&D unit has performed rigorous preliminary studies to dig out few of the most yielding industrial fragments carrying the potentials to feed the national economy. The spokesperson

further shared that these five industrial sectors (fans, sports goods, surgical instruments, plastic goods and 2/3 wheelers automobiles) indicate huge employment and exports potentials while formulating a substantial chunk of national revenue.

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Exclusive Article by Ali Hassan on Motorcycle Sector

Monthly AutoMark Magazine

Duty on components of bikes reduced, APMA terms it “small cumin seed in a camel’s mouth.” Three Japanese bike assemblers have their own story while low cost bike makers fight with the government departments on their own. However, the Japanese bike assemblers definitely influence over the government’s policy making but the real volume and employment are with the Chinese bike assemblers. If we consider that everything has been going well for the industry the role of the government to provide extra incentives on the basis of industry performance is not satisfactory. Perhaps this is the reason that the country has failed to lure new foreign investment as consumers have been running old model of 70cc CDI bike for decades. In contrast India has progressed a lot where 70cc does not exist and people buy 100-150cc bikes at cheaper rate as compared to 70cc rate in Pakistan. Petrol consumption is low due to fuel efficient and latest engine technology despite high rate of petrol in India.

he growth of Pakistan’s bike industry is very different from other industries like textile and value added sector, pharmaceuticals, etc as it has been m akin g st eady prog res s des pite uncertain economic and political conditions. As many industries are severely hit by power and gas crisis causing production and export drop, the two wheeler industry has been quite sailing smoothly as it requires low volume of these utilities and its working is purely based on human resources and labor presence. When Chinese bike industry was not existing in Pakistan, the total sales of Japanese bike industry was less than 100,000 units a year which has now crossed 1.6 million units per annum thanks to the arrival of low cost bikes. The most important development the country witnessed in the last one decade is the investment made by assemblers and their vendors in billions of rupees which also opened thousands of direct

and indirect employment opportunities. If we consider that everything has been going well for the industry the role of the government to provide extra incentives on the basis of industry performance is not satisfactory. Perhaps this is the reason that the country has failed to lure new foreign investment as consumers have been running old model of 70cc CDI bike for decades. In contrast India has progressed a lot where 70cc does not exist and people buy 100-150cc bikes at cheaper rate as compared to 7 0 cc ra t e i n P a k i s t a n . P et r o l consumption is low due to fuel efficient and latest engine technology despite high rate of petrol in India. Three Japanese bike assemblers have their own story while low cost bike makers fight with the government departments on their own. However, the Japanese bike assemblers d e fi n i t e l y i n f l u e n c e o v e r t h e government’s policy making but the real

volume and employment are with the Chinese bike assemblers. If the volume of motorcycle has increased in Pakistan the country has failed to attract any new foreign investment as investors maintained their fo cus in p rodu cin g 70 cc bik es. After over 20 years, the Euro II models were launched in the 70cc by a leading Japanese bike assembler while Chinese bike makers are now following the suit. There is still a room in the market to lure new investors especially Chinese bike assemblers to bring out new models as available in the world. However, the taxation structure and uncertain political conditions create doubts among the in ves tors to bring their capital. However, some 70cc bike assemblers have been trying to give new look to the 70cc but the cost on new designs is being brought from the pocket of consumers who are perturbed over high petrol rate and rising cost of living. Some analysts feel majority of the countrymen cannot afford 100-150cc bikes due to their high price and petrol consumption and only a fuel efficient and latest engine technology can reduce the high petrol consumption in higher engine power bikes. “I think the government should now sit with the Chinese bike assemblers and discuss ways and means to introduce new models,” the Chief Coordinator of

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Exclusive Article - continued

The CBU rate of duty on bikes should not be more than 50 per cent and customs duty on localized parts not more than 30 per cent and customs duty on non localized parts should be 15 per cent. Other duties through IORC should be demolished immediately. Duty on raw materials must be zero per cent plus some additional benefits for the real manufacturers of bike parts. The ECC decided in the same meeting in which all the tax structures were decided for new entrant policy. He said so far no notification has been issued yet. All Pakistan Motorcycle Assemblers (APMA) Mohammad Sabir Shaikh says. “There is a need to overhaul the existing policies to bring new models as perhaps 70cc exists only in Pakistan,” he says. He says he is not happy over the issuance of SRO regarding cut in customs tariff on bike industry. He said that the government is sitting on the SRO regarding new entrant policy and taking too much time. He strongly urged the government to reduce taxes and duties on bike industry otherwise Pakistan’s own Chinese related industry would collapse. The Federal Board of Revenue has reduced customs duty on motorcycles and different categories of components used in motorcycle industry. It also reduced additional customs duty on the import of motorcycle components from 32.5 percent to 28.75 percent. In this connection, the FBR has issued four notifications. The reduction in duty has been made for a period of current financial year. According to SRO.1404(I)/2012, the FBR has ex empted so much customs-duty, leviable in the First Schedule of the Customs Act, on import o f c o m p let e ly b u ilt u p (C B U) motorcycles and components thereof for ass embly o r m anufacture o f motorcycles in any kit form, classified under Pakistan Customs Tariff heading 87.11, as are in excess of 57.5 per cent for the current year. Through another SRO.1403 (I)

/2012, the FBR has reduced additional customs duty on sub-components and components imported as part of any kit form for the assembly or manufacturing of motorcycles classifiable under respective Pakistan Customs Tariff He ad ing s m ent i o ned in the SRO.693(I)/2006 dated July 1, 2006. The SRO.1403(I)/2012 has amended the SRO.693(I)/2006 which deals with the imposition of the addition al customs-duty on the import of subcomponents and components used in man ufacturin g of motorcars and motorcycles. Under SRO.1402(I)/2012, the FBR has amended SRO.656(I)/2006 relating to the concessionary rate of duty on the import of components (which include sub-components, components, subassemblies and assemblies but exclude consumables), imported in any kit form, and direct materials for assembly or manufacture of vehicles falling under Chapter 87 of the First Schedule of the Customs Act. The SRO.1402(I)/2012 has reduced cu stom s dut y o n th e impo rt o f components used in the assembly and manufacture of motorcycles. The FBR has exempted components imported in a n y kit fo rm , for as s em bly or

manufacture of motorcycles falling under Chapter 87 of the First Schedule of the Customs Act in excess of 10 percent duty. The FBR has also issued S R O .1 4 0 1 ( I) / 2 0 1 2 t o a m e n d SRO.655(I)/2006 dated June 22, 2006. Under this notification, the FBR has reduced customs duty on raw materials, sub-components, components and subassemblies, as are not manufactured locally, imported for the manufacture of components and assemblies of motorcycles. Mohammad Sabir Shaikh commenting on the notification of the FBR said it is “small cumin seed in a camel’s mouth” or too small an amount for a very large need. He said in the last three years many departments like BOI, Planning Commission, NTC, CCP, EDB, FBR and MoC have been studying to change the tariff for motorcycle industry. At the end these changes announced are nothing. Over 100 units of bike assemblers are currently working in Pakistan in which more than 50 per cent are closed due to rising cost of production caused by rupeedollar-yen-Chinese Yuan parity. Sabir Shaikh said when dollar was equal to Rs 60 then the duty and tax structure on bike industry was same. Now the dollar is near about Rs 100 and the tax structure is still the same. The policy makers must remember this point as the value of the CKDs and other components have increased by over 40 per cent but the tax cut is less than 10 per cent.

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Exclusive Article by M. Owais Khan on Car issue

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Consumers’ interest sidelined over unfair protection to local assemblers

FBR not happy over cut in used car age limit Deputy Prime Minister and Senior Industry Minister Chaudhry Pervaiz Elahi’s soft corner for the cartel of local car assemblers finally came under discussion in a negative tone at the meetin g of Na tio nal Assembly’s Standing Committee on Finance held on December 4, 2012. ignored the Cabinet Division’s letter to Industry Ministry in which it was clearly mentioned that the issue of used car import did not fall in the domain of Ministry of Industries. Even the Industry Minister Shafqat Hussain Naghmi also followed the suit in personally visiting the car assemblers and vendors thus assuring full support on used car issue. The matter looks highly politicized as used car dealers also used political pressure to get further increase in age limit of used cars but the assemblers made a clever move by taking on board Pervaiz Elahi who definitely needs support to finance his political campaign for next year’s elections. As the government has hardly taken any decision to win support of masses, the trade and industry sector fully utilize the situation through under hand deals and greasing the palm of political representatives and government officials to tilt the decision in their favor. One can easily guess why Mr Pervaiz Elahi was more interested in offering huge protection to the already protected car assemblers ahead of general elections as this move cannot be termed as consumer friendly. The quick decision of Economic Coordination Committee (ECC) of reducing age limit of used cars to three from years last month showed the willingness and interest of Mr Elahi as he cleared the dust by saying that the government actually aimed at protecting the local industry, investment and jobs o f m i llio n s o f p eo p le w it h o u t ascertaining the performance of car

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assemblers and their utter refusal for bringing down car prices. The meeting of National Assembly ’s Standing Committee on Finance, whose findings made headlines in newspapers, did at least expose the unfair protection given to the car assemblers. The meeting alleged ‘serious nontransparency’ on part of the ECC of the cabinet and Deputy Prime Minister Chaudhry Pervaiz Elahi in extending unfair protection to local car assemblers. The Committee on Finance asked the government “not to issue a notification to reduce the age limit for imported cars.” However, this is a gigantic and tough demand which at least make car assemblers satisfy that the ECC decision would not be reversed till next year’s new election. In the blame game between the assemblers and the used car dealers the government is playing no role in protecting consumers’ interest. The end users must be well aware now what has been going on but they do not have any say. In today’s world the consumers are quite intelligent and have access to internet. They deserve the right to get the best value of their money. The choice for consumers to purchase locally assembled car has further shrunk following suspension in production of Daihatsu Cuore and Suzuki Alto six months back. They are bound to take costly ride by purchasing over twodecades’ old model of Suzuki Mehran. Hardly any governments have taken

notice as to why Mehran has been assembled since 1990 and after over two decades the assembler of Mehran bothered to convert it to Euro II standard for which the consumer paid the price of new technology. Suzuki Alto survived for over 10 years with very little cosmetic changes while people have yet to see a complete change in Cultus model. A number of people vent their anger in daily newspaper in letters to the editor pages about the poor performance of local car assemblers followed by a write up by former governor of State Bank of Pakistan Shahid Kardar in a leading English Daily on car assemblers. In the December 4 meeting, the MQM MNAs were too critical over the performance of auto assemblers but they got support to their remark from PPP member Shahnaz Wazir Ali. Even many legislators blamed underhand deal between assemblers, Mr Elahi and relevant ministries. Committee’s chairman Khawaja Sohail Ma n so or o f th e M QM s a id th e Committee does not find transparency in the matter. The same party’s Abdul Rashid Godil agreed with him. “There is something very wrong in policy changes… very serious gaps that nobody is able to explain,” PPP’s member Shahnaz Wazirali said. They strongly urged the government to refrain from issuing SRO on age limit reduction on used cars unless two studies by the National Tariff Commission (NTC) and Competition Commission of Pakistan (CCP) are completed. The committee was informed by an additional secretary for commerce that the industries ministry had previously submitted a summary to the ECC for reducing the age limit for imported cars, but it had been challenged by the commerce ministry because it believed the rules of business required it to

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The parliamentarians lamented that the official had used objectionable language against individuals for ‘misuse of policy’, but he did not take any action against the assembler who had been “misusing policies, violating commitments and monopolising the market for decades”. suggest changes in the import-export regulations. The ECC empowered the commerce ministry to look into the matter. “Now that the ECC has taken a decision, the commerce ministry is bound to issue an SRO to implement it.” Khwaja Mansoor questioned the ECC decision when the homework was under way. He said the decision had been taken on the desire of the deputy prime minister without waiting for the outcome of the studies. MNA Godil said the three local car assemblers who were monopolising the market and the government’s decisionmaking “had a meeting and ‘setting’ with the deputy prime minister” and their wishes had been approved by the ECC. Shahnaz Wazirali, MNA, said it was strange that policy changes were being made so abruptly, without studying various factors, and it appeared as if major decisions were being taken only on assumptions that turned out to be wrong every time. The members said the local car industry should not be described as manufacturers because they imported over 60 per cent of the components and hence could at best be called assemblers who had monopolised the market despite the fact that they were required to achieve 100 per cent lo c a l m a n u f a ct u r in g b y 2 0 0 5 . Some members said the assemblers and vendors imported raw material and parts at five to 25 per cent duties for manufacturing of cars, but utilised the facility for marketing spare parts in violation of rules despite the fact that importers of only spare parts were subjected to 65-100 per cent import duties. The chief executive officer of the Engineering Development Board said cars of comparable make and models were 37 per cent cheaper in India than in Pakistan, but that was mainly because of economy of scale. He could not satisfy the members why the deletion program had not been honoured by the three car assemblers, but said the import schemes were “massively misused” by laborers and workers in the Middle East.

The parliamentarians lamented that the official had used objectionable language against individuals for ‘misuse of policy’, but he did not take any action against the assembler who had been “misusing policies, violating commitments and monopolising the market for decades”. Senior Member of Federal Board of Revenue Israr Rauf also dropped a bombshell by saying that the government would suffer loss of Rs 17 billion in duties if the government bans the import of cars of more than three years old. He informed the Public Accounts Committee (PAC) of the National Assembly that the FBR had already expressed its reservations over the decision of the ECC of the cabinet which had endorsed the ban. Chairman All Pakistan Motor Dealers Association (APMDA), H.M. Shahzad was happy over the Standing Committee’s review of the whole situation. He said sales of locally assembled cars has dropped due to closure of two prolific models, Suzuki Alto and Daihatsu Cuore a few months back while ban on import of CNG kits and cylinders further hits the sales. This shows that policies for the industry have failed to res p on d to m ar ke t co n d it io n s . APMDA chief said that the NA panel’s rejection of the decision is manifestation of aspirations of the people and points to lack of transparency in the decisions and injustice to consumers due to monopoly of assemblers. He said the ECC decision would further cause loss of revenue to the government worth Rs32 billion annually which the FBR used to collect in terms of duties from used car imports. The local auto industry is enjoying concession s in duties a nd tariff protection for the last 30 years without co mp lyi n g w it h loc ali sa t io n o f parts/processes and reduction in prices. In effect, they are still assemblers without any plan to become real manufacturers. Shahzad said the In principal, there should be no problem for a new car to compete with a used car if its quality

and price are competitive. “The used car business is providing employment to more than 4,000 dealers nationwide and allied manpower, comprising 800,000 to one million people. The sale of local cars in 2011-12 remained very good and higher than previous years and the industry had declared very good results. “This is together with and side by side with used cars. How then used cars became a threat in the current year?” he questioned. He said the government should provide a level-playing field to all stake-holders without giving a chance of monopoly to anyone. Vice Chairman Pakistan Automobile As s e m b le r D ea le r As s o c i a t i o n (PAMADA) Iqbal Hussain Shah said the government and legislatures should realize that promoting an illegal trade of used car dealers will not only devastate the local industry but will hurt its reputation as well. The local auto industry that has employment of over 2.2 million people while used car industry doesn't have minuscule employment. Similarly, local auto industry saves more foreign exchange as it spends on average $4600 to import one CKD unit against the $9800 spent on one used car unit and that too transmitted through illegal means, which means the government is losing $5000 in terms of foreign excha n ge on on e imp orted ca r. It is quite obvious that only local auto industry creates real economic activity as auto parts worth over Rs 60 billion manufactured locally every year, while in the used car import segment there is no local manufacturing. The local auto industry pays more taxes to the government as over Rs. 65billion tax contribution was made by the entire local auto industry annually, while imported used carsegment pays less than Rs 21 billion in this regard. Over Rs. 40 billion investments was made by just 3 Original Equipment Manufacturers (OEMs). On the other hand, zero investment is made by used car industry. SEND YOUR COMMENTS @email: automarkpk@gmail.com

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Are company mergers the only way forward for the Chinese motorcycle industry? Consolidation for survival and dominance! There will never be only 4 motorcycle companies like in Japan, but when you consider that the number of working factories has halved in the last 7 years and is still dropping, and the number of units exported is rising, it would be no surprise if the number of motorcycle companies operating in 2020 was under 20! This year I tentatively hosted a gathering of the luminaries and minions of the Chongqing motorcycle industry. The meeting, at my house, was a success as most attendees agreed that they were facing the same problems as each other when considering the future direction of the industry. Inspired by this I started the Chongqing Motorcycle Industry Council, members of which would convene on a monthly basis in an informal fashion (in a local pub) to chew the fat over future export market development and technical upgrading. The council includes export clerks and managers, technical and research and development staff and of course journalists. All are agreed on the future shape of the industry, one of merger. Back in 2009 Chinese motorcycle heavyweight Loncin bought out fellow manufacturers Kinlon adding their weight to a company which already boasted a technical working relationship with BMW. This merger propelled Lon cin to the stat us of bigg es t motorcycle exporter in China and was surely a sign of the shape of things to come. Although the motorcycle giants are safe enough in their autonomy the smaller sized companies are vacuuming each other up at a rate of knots.

Back in 2006 there was over 240 moto rcycle compa nies operatin g production lines in Chongqing alone, a good proportion of them ‘one line’ export factories that provided super-cheap models for the African and domestic markets. Unlike India in which the Hero Group and Bajaj share a huge proportion of the market the Chinese market was shared by a multitude of smaller companies. The number of Chongqing factories still operating is now down below 90. Smaller companies have joined to become middle-sized companies in an effort to compete with India on traditional markets and to expand their range to pastures greener. A typical example of this was explained to me by Troy Ma, an ex export clerk for KingtonLiyang. At the last council meeting he reported “Kington’s supply chain and buying power was not big enough for the company to expand in certain areas including the development of a ‘dual fuel’ petrol/CNG motorcycle engine and a range of dirt bikes with DOT and EPA for th e US m ark et. Th ey w ere approached by a rival company called ‘Andes’ and after negotiation it was decided to merge the two companies to increase buying power of parts and increase the supply chain. This is a

phenomenon happening all over Ch ina. H ere in Chongqing Vision, a company that produces motors and electric-vehicles has joined w i t h David McMullan Motorhead to attack The Englishman the South American in China market. In Zhejiang province the biggest rivals to the Chongqing companies are Keeway (the company that own Italian marque Benelli) and in Guangdong province it is Qiangjiang. They have been snapping up smaller companies for the last few years and have expanded their influence world-wide.” It is evident that the Chinese industry has stepped up its efforts to shake the dreadful reputation of the first wave of motorcycle exports. It has also increased the distribution of spare parts to the extent that now Chinese motorcycles have evolved from 3rd world transport tools to very useful commuter bikes in developed countries; but this is not enough. For Chinese companies to truly compete with the Japanese giants in terms of quality and brand recognition will require intensive investment. Investment requires huge financial

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CIMAMotor 2012: Loncin CR9 A pretty impressive street bike that uses single cylinder motor BMW G650GS the Chinese Loncin presented in the 11th International Motorcycle Exhibition in China. The Chinese manufacturer cooperates with the Bavarian company over the last seven years and the construction of this motor and it has acquired the rights and putting it in their own models, as evidenced by the purely street bike with s t y lis h lo o k s a n d p eri p h er a ls . The power rises to about 47 bhp over its appearance, reminiscent of Japanese models respectively, distinguished revered sized inverted fork design of the swingarm and the final evaporation.

As for the price, it must be said that it is high in relation to the data you have used the Chinese manufacturers and is just over 6,000 euros. According to the British newspaper «Motorcyclenews» the CR9 will not be available in the European market (for now, at least) as Loncin has agreed with BMW to produce a motorcycle just for the China market. The Chinese international exhibition known as CIMAMotor is the largest taking place in Asia and attracts all the major manufacturers in the region and Europe. This year was between 11 and 14 October and managed to collect tens of thousands of visitors and hundreds

of manufacturers of motorcycles and motorcycle accessories...

resources which may only be found by conglomerating existing companies in to ‘super-companies’ that can compete with the Japanese and Europeans on a level playing field. Collaborating with existing foreign motorcycle companies has been complementary for the bigger firms, but also restricting as Loncin found out after receiving help developing their 600cc. For some reason this model will n ot be available for export. To finally achieve parity with the Japanese and European giants it is imperative that Chinese machines make a mark on international motorcycle events. Zoe Fu of ChinaMotor Magazine explains “the bigger companies are aware that they have to emulate the development of Honda as a bench-mark of the industry. Honda’s success in the Isle of Man TT was paramount in enforcing their brand as a world leader. As yet only Loncin have raced at the

very top level in moto125 although Shineray produce top quality off-road models an d have had success at international level. Many people feel it is only with big collaborations that this transition can occur. There will never be only 4 motorcycle companies like in Japan, but when you consider that the number of working factories has halved in the last 7 years and is still dropping, and the number of units exported is rising, it would be no surprise if the number of motorcycle companies operating in 2020 was under 20! If this happens as expected these super-factories will be a match for anyone in the world” With 6 Chinese motorcycle companies now producing 600cc motorcycles it would seem that the first step of the industry evolution has happened. The willingness of the Chinese motorcycle industry to invite a delegation from FIM

to the CIMAmotor exhibition this October has surely signalled a positive intention to involve themselves more with international motosport, Joo Jiang independent motorcycle exporter and fellow member of the Chongqing council opines “at the moment I don’t think that the motorcycle companies know the best w a y t o i n v o lv e t h em s elv e s i n international racing, and then on to create brand names that are world recognised, if they can get the right advice from the correct organisation that will go a long way to entering Chinese bikes in to world sports. As far as the domestic situation is concerned we have a brilliant race circuit at Shanghai (which is fully compliant with F I M r eg ul a ti o n s ) a n d a n o t h er international class circuit at Zhuhai. I think we first need to concentrate on a first class

Impressive display of Loncin CR9 which will be sold exclusively in the Chinese market, according to a spokesman for the company at CIMAMotor-2012, Chongqing, China

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Automotive Sector - Update

Japanese firms plan to shift units to Pakistan from India

Japan is an important player for peace, progress, cooperation and stability in the world and its role in assistance to developing countries and regions is laudable Japanese Ambassador to Pakistan Hiroshi said that many big Japanese investors are seriously planning to shift their units to Pakistan from India due to strong workers unions culture in India. The Ambassador was speaking at the Lahore Chamber of Commerce and Industry. LCCI President Farooq Iftikhar highlighted the issues being faced by the businessmen while Senior Vice President Irfan Iqbal Sheikh, Vice President Mian Abuzar Shad, former presidents Tariq Hameed, Iftikhar Ali Malik, Mian Misbahur Rehman, former senior vice president Abdul Basit, former vice presidents Aftab Ahmad Vohra and Shafqat Saeed Piracha also spoke on the occasion. Hiroshi Oe said that the business environment in Pakistan is far

better and it is a safer place as far as working conditions are concerned. The econ omy an d in frastructure development are the priority areas and Japan government is focusing on them. The Ambassador also stated that Japanese government has hosted investment seminars for Pakistan to further strengthen bilateral relations. “Japanese businessmen are being motivated for establishing business with their counterparts in Pakistan. He said Japan will continue to provide financial and technical assistance to Pakistan as we believe that this country has a great potential for the future. There are spectacular development and investment opportunities in various fields as few countries are gifted with natural resources, the Ambassador said.

Honda Motorcycle Production totals 200 Million Japanese motorcycle manufacturer Honda announced that its motorcycle production reached 200 million units since 1949 when the company built the first Dream D-type model. Honda owns no less than 32 production facilities in 22 countries around the world, with R&D centers in U.S., Germany, Italy, Thailand, China and India. Moreover, Honda says that its annual sales exceeded 10 million units in 2004 while in 2007, they reached a record of 13.47 million sold motorcycles. Although it may sound impossible in the context of the global economic crisis, the company predicts sales of more than 18 million units in 2010. And since we're talking about the global recession, Honda is one of the first companies that announced job cuts and lowered production in the North American market, together with two other motorcycle giants, Suzuki and Yamaha. Honda reduced the number of

motorcycles to be built in the United States by 100,000 units after the whole motorcycle industry recorded lowered demand. O n the other h and, H onda also encountered problems in the automotive market, with production reduced in both t he Ja panes e and non -Ja pan es e factories. “Production in Japan for the first half of the current fiscal year experienced a year-on-year decrease for the second consecutive year (since the fiscal year ended March 31, 2008),” the Japanese company said in a press statement. However, Honda had pretty good sales in Japan, according to the same press release. “Total Japan domestic market auto sales for the first half of the current fiscal year experienced a year-on-year increase for the first time in three years (since the fiscal year ended March 31, 2006),” it said.

“Pakistan is facing difficult challenges which will be over soon,” adding that he will continue to strive to deepen mutual understanding through economic, educational, cultural and political exchanges. Speaking on the occasion, the LCCI President Farooq Iftikhar said that Japan is third biggest and one of the trillion dollar economies of the world and is an important trading partner of Pakistan as well as a major donor. He said that availability of inadequate traderelated data is one of the hurdles in the way of expansion of trade between two countries. The LCCI President said that export potential of Pakistan is great which may be shared with Japanese businessmen and investors. Frequent exchange of sector-specific delegations can make the representatives of private sectors explore th e opp ort un ities o f t rad e a n d investment in Pakistan. Japan is an important player for peace, progress, cooperation and stability in the world and its role in assistance to developing countries and regions is laudable.” Farooq Iftikhar said that share of Japan in Foreign Direct Investment in Pakistan is very low despite the fact that the country has a unique standing in terms of its strategic location and countless investment opportunities. Meanwhile, a high-powered six-member Polish Parliamentary delegation, headed by the Chairman of Polish Senate, Mr. Bogdan Borusewicz Marshal, Thursday visited Lahore Chamber of Commerce and Industry and emphasized the need for enhanced economic cooperation between Pakistan and Poland to boost trade and investment. LCCI Presiden t Faro oq Iftikh ar presented the address of welcome to the Polish Parliamen tary delegation .

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Pakistan likely to be among top 5 motorcycle producers, exporters Pakistan will be amongst the top five countries producing and exporting high quality motorcycles in the next few years, said T Oyama, senior managing director of Honda Motor Company Japan at the launch ceremony of the firm’s new model Pridor, said a press statement. With the hard work of associates, Atlas Honda today stands at the turning point from where the sales and production will touch the ever highest in the history of the country, he said. It is encouraging that after investing $35 million this year, Atlas Honda has increased its motorcycle production capacity to 750,000 vehicles annually keeping in mind the growing local demand, one of the largest motorcycle markets in the world, and export potential to regional countries, he said. The leading motorcycle manufacturer is currently conducting a study for an

expansion to 1 million units’ production capacity, which is estimated to cost around an additional $50 million. By launching yet another state of the art model Pridor, surpassing all available technologies in the country, Atlas Honda has also proven its commitment to Pakistan’s market, he said. He said that it is very encouraging to know the government of Pakistan is supporting localisation in the country; especially the recent decis ion of Economic Coordination Committee depicts the government’s localisation friendly p olicy. Aoyama , GM Moto rcycle Business Planning, Honda Motor Japan, expressed gratitude to the Pakistani customers for their confidence in Honda with the assurance that Honda will continue to bring new models with same great quality which is their hallmark...

Pak-Suzuki Motor seeks nod to import Alto car parts from India Pak-Suzuki Motor Company has asked the Pakistan Government to permit the import of parts for the Alto model car from India so that it can revive the production of the vehicle, according to a media report today. Pak-Suzuki had discontinued the production of t he Alt o in July. This was done after it converted all models to Euro-II standards, except Alto as its “complete knock down” (CKD) kits that meet Euro-II standards are only available in India. India is the only country in the region producing EuroII compliant parts. The company had discontinued various cars that need to have Euro-II compliant engines from June. A spokesman for Pak-Suzuki, Shafiq Ahmed Shaikh, told media that 159 parts of the Alto, which are Euro-II compliant, are only made in India. The compan y ha s requested the

government to allow import of these parts from India but so far nothing has been done, he said. The parts sought from India were included in negative list and this caused the discontinuation of Alto production in Pakistan, he said. However, this negative list would be eliminated by December, Shaikh noted. The Pakistan Association of Automotive Parts and Accessories Manufacturers (P A AP AM ) t o o h a s u rg e d t h e Government to remove these 159 parts from the negative list so that the vacuum in 1,000cc car segment can be filled, he said. The vendors pointed out that India is the only country where Euro-II Alto parts are available and Suzuki Japan has made India an investment centre for research and development and engine manufacturing.

PSO to set up refinery in KPK, 100 LPG outlets across country: MD PSO says The Pakistan State Oil (PSO) will set up 100 Liquefied Petroleum Gas (LPG) auto filling stations in the country within a year, besides initiating construction of a modern crude oil refinery in Khyber Pakh tunkh awa, w hich would be completed in four years, PSO’s Managing Director Naeem Yahya said at a press conference last month. Furthermore, the MD said that PSO intended to set up itself as the leading company in Pakistan within two years, a regional player in four years and a member of global oil conglomerates within the next six years. Establishment of over 100 LPG autogas stations over the next year and agreements with Parco, Byco and Bakri Trading for acquisition of POL products.

Car sales fall 32 percent from last year Pakistan car sales (including LCVs, vans and jeeps) declined to 39,938 units during the first quarter of FY13 – down 32 percent compared to 58,801 units in the same period last year – according to the data released by Pakistan Automotive Manufacturers Association (PAMA). During October, sales declined further to a 16-month low – 9,397 units, down three percent from last month and down 38 percent compared to last October. Among individual companies, Pak Suzuki (PSMC) sales during the first quarter of FY13 declined by 35 percent to 22,753 units as against 34,877 units sold in the same period last year. In October, the company sales stood at 5,094 units – down 40 percent from 8,462 units in the same month last year. Similarly, during the first quarter of FY13, Indus Motor Company (IMC) sales have declined to 11,003 units – 38 percent down compared to the same period last year.

No CNG for vehicles above 1000cc Advisor to Prime Minister on Petroleum & Natural Resources Dr. Asim Hussain declared that a decision to allow CNG only in public transport has been taken and all is set to ban CNG for above 1000CC vehicles. Dr. Asim stated this while addressing

Annual Technical Conference organised by Pakistan Association of Petroleum Geoscientists. He said if usage of Compressed Natural Gas (CNG) as a fuel in vehicles has not been discouraged then all vehicles would convert on CNG and if usage of CNG

goes on in the cars then it would be difficult to meet country’s need as currently fertilizer and industrial sectors of the country are facing shortage of gas. He further said that owing to low price of the commodity, consumption of CNG has witnessed increase.

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by Haider Nawab from Toyota Souther Motors

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INVISIBLE FORCE

Drag Phenomenon has a great affect on the fuel consumption of any vehicle may be a mini car or Heavy Goods Vehicle (HGV). In fluid dynamics drag is called air / wind resistance which refers to forces acting on any solid object in the direction of fluid flow velocity: Most of the drag on a vehicle is aerodynamic drag rather than rolling resistance. Usually vehicle owner is helpless to reduce drag figures but in some cases unconsciously owners cause to increase drag spec ially in the Heavy Goods Vehicle by means of non-aerodynamic body design creating frontal areas. Some parts naturally contribute in the creation / increase of frontal area and turbulence such as:

MIRRORS Both mirrors (may be more if equipped) c re at e a la r g e a m o un t t o t h e aerodynamic drag of a vehicle. This drag can be reduced by using small size mirrors. It would be appropriate if folding type mirrors are turned to collapsed condition while driving on high or motor way, however the new technology will

eliminate the requirement of mirrors and we shall be using cameras in near future.

TIRES Tires are the 2nd major source of aerodynamic drag after body, slimmer tires may reduce drag.

WARNING LIGHTS T he s e lig h t s a re mandatory for law enforcing authorities, Fi re â&#x20AC;&#x201C; v e h ic les , Ambulances, Air port Haider Nawab utility vehicles and some other ground vehicles.

WHEELS Wheel design (without wheel cover) also causes air turbulence in the wheel well this turbulence effect will multiply the drag and increase fuel consumption. Wheel cover will help reduce turbulence and improve fuel economy.

SHOW GRILL Some grills very badly block air flow because of design / beauty which consequently add drag.

RADIATOR I t is an evil fo r d rag crea tion simultaneously good will for engine cooling.

UNDER CARRIAGE Generally low budget (low specs) cars are designed without full undertrays, however medium priced cars have half undertrays. 20% ~ 30% of the total drag on a vehicle is contributed by cars without under tray. High specs high price cars are mostly equipped with full undertrays. BOTTOM LINE Greater the drag greater the fuel consumption.

Developed by Haider Nawab

RADIO ANTENA It is usually said that 1% of the vehicle total drag is caused by open antenna.

GET READY FOR A NEW YEAR LEAVE THE OLD BEHYND

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“I think the government should now sit with the Chinese bike assemblers and discuss ways and means to introduce new models,” the Chief Coordinator of All Pakistan Motorcycle Assemblers (APMA) Mohammad Sabir Shaikh says. The working of industry would not be feasible despite changes in the tariff structure, he said. The CBU rate of duty on bikes should not be more than 50 per cent and customs duty on localized parts not more than 30 per cent and customs duty on non localized parts should be 15 per cent. Other duties through IORC should be demolished immediately. Duty on raw materials must be zero per cent plus some additional benefits for the real manufacturers of bike parts. The ECC decided in the same meeting in which all the tax structures were decided for new entrant policy. He said so far no notification has been issued yet.

Meanwhile Director General Pakistan Automotive Manufacturers Association (PAMA) Abdul Waheed Khan said attempts to create confusion on ECC decision will only hurt business environment in the country, ECC is a respected forum and any attempt to subvert its decisions will create a trust deficit between business community and the Government officials. In a letter to Finance Minister Hafeez Shaikh and FBR chairman, he said that FBR’s initiative of notifying the ECC decision in letter and spirit gives the industry very high hopes that it will go a long way in development of auto industry in Pakistan, however some elements are bent upon creating confusion about a clear decision by ECC o n 2 3 r d O c t w h i c h h a s b ee n communicated clearly in form of SROs issued by FBR. The letter says “the issue of auto industry was and is sensitive to the long term growth of a vibrant sector of the industry; the decision was given only after a dozen or so meetings and a year long dialogue. The ECC decision was clearly minuted by the Cabinet division and subsequently shared with the stakeholders in person and via the local and international media. As per sources The ECC in its meeting on 23rd Oct had clearly decided and

directed the FBR to issue SR Os amending the tariff structure for motorcycle manufacturers across the board, meaning that new or existing all players will be governed by the latest tariff structure approved by the ECC. The ECC had clearly stated that the amended structure will be reviewed after one year. However, as per sources in FBR, after failing to have much trumpeted controversial policy for new entrants approved, the Ministry of Commerce is now trying give a new turn to ECC d ecis io n, so ur ces i n FB R sa id. The minutes of the ECC meeting of October 23, 2012, clearly state at para 4 that "During ensuing discussions, the ECC noted that in its previous meeting it has agreed in principle to reduce the tariff gradually. However, the proposal is not in line with that decision and reduction in tariff in one-go has been proposed. It was suggested that ECC may consider reduction in tariff to the average of the existing rate and the proposed rates. However, the rate can be reviewed after one year. It was also stated that there was no need of a committee for receiving and approving requests of new entrants.”

A letter dated November 30, 2012, has been sent to the FBR, with copy to Ministry of Industries, by MOC alleging that ECC has approved the “New Entrant Policy” for motorcycles in its meeting dated October 23, 2012. Through this letter the MOC has conveyed an understanding that ECC in its decision dated 2-10-2012

has approved New Entrant Policy for motorcycle industry. It is interesting that as per ECC decision dated 2-10-2012 at Sr. No. II it is simply stated that “ The proposed duty structure would apply equally to new entrant and existing manufacturers so as to provide a level playing field to all the manufacturers.” Abdul Waheed said that the MOC is making a mockery of the SROs and subsequent formalities which followed the decision by ECC, which were made in spirit of protecting the local industry while giving a projection of next year to all the stakeholders. Creating a confusion out of a speaking order is not only detrimental to the industry but will create yet another e mba rr as s in g s it ua tio n fo r t h e Government which is already facing difficult situation in front on the courts. He said that industry will not waste a single day and will take the matter to courts if the MOC doesn’t stop playing the game sponsored by vested interest. On the other hand better sense seems to have prevailed at FBR as they have already uploaded the relevant SRO’s specially SRO 693 (I)/2006 with new entrant policy as approved through ECC d e cis i o n o f t h e C a s e N o . E CC 168/13/2007 dated 13.11.2007. This policy uploaded on the FBR site given in SRO 693/2006, covers only Cars, Trucks and Busses etc. but leaves out the two-three wheelers. These SROs were uploaded on FBR site on November 30, 2012, while Revenue Division, FBR letter for clarification on the issue was written on November 21, 2012. This goes to prove that FBR is not satisfied with what it is being dragged into. They have taken a strong position in face of MOC letter and pressure from powerful quarters.....

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China Automotive Industry - Update

Chinese cars yet to motor along U.S. roads

China continues to be the world’s largest automotive market. However, Chinese car manufacturers are still several years away from putting their products in the U.S. market, according to Michael Dunne. Dunne is the president of Dunne and Company, a strategic marketing group helping auto companies expand in Asia. Dunne addressed the status of China’s car industry, citing economic tensions with Japan. “There is serious animosity between China and Japan. In China, all of the cities are competitive against each other. It’s a zero sum game,” said Dunne. According to Dunne, General Motors has the largest presence out of all America n auto makers in China . “General Motors is going to sell 2.5 million cars in China. Second is Ford,

Renault to set up plant in China French car maker Renault is planning to build a 200,000-vehicle a year plant in China, but needs political support to go ahead, a source with knowledge of the scheme said on Tuesday. For years Renault has lef t the Chinese market the world`s biggest to its Japanese alliance partner Nissan, as part of their geographical division of markets. The factory is to be built in Wuhan, in central China, byRenault and its joint venture partner Dongfeng, said the source, who works in the same area. B u t a n e n v i ro n m e n t a l i m p a c t assessment still has to be completed and the approval process will take several months, the source told AFP, and was likely to involve high-level political figures from France and China. `It will be good if the foundation can be laid before the end of 2013,` the source said.

Yokohama tops tire satisfaction survey in China

with roughly a fifth of what GM does. Ford has never been in better shape in China than today. Chrysler is starcrossed. They find themselves on the outside looking in, now,” said Dunne. Dunne says China’s affordable costs makes it a desirable location for manufacturing. “The world of business is going to look for low-cost. China has proven itself to be an ideal manufacturer of simple parts at high-scale and low-cast,” said Dunne. According to Dunne, Thailand’s place in the auto industry is of growing importance. “There is no question Thailand is a rising star in the auto industry. It will export more than a million cars this year, but let’s not forget the reason why American automakers are in China... it’s the biggest market in the world,” said Dunne. Perhaps the biggest misconception about the Chinese auto industry, says Dunne, is how soon the country will enter the U.S. market. “Chinese automakers are at least five, maybe ten years behind in terms of quality reliability. There is no immediate threat of having an invasion by Chinese car makers,” said Dunne.

Japanese tire maker Yokohama Rubber Co. ranked first in the 2012 China original equipment tire satisfaction survey conducted by J.D. Power and Associates. Yokohama scored 843 out of a possible 1,000 points. Dunlop ranked second at 837, while Bridgestone and Continental tied for third at 833. T he s urvey meas ured con sum er satisfaction with a tire's appearance, durability, traction, handling and ride. J.D. Power surveyed car owners about their original-equipment tires during the first 12 to 24 months of ownership. The California-based research firm survey ed motorists from February through May in 37 major Chinese cities. As a group, tire makers had an average score of 801. In addition to the top three companies, four tire brands with aboveaverage results were Pirelli, Michelin, Goodyear and Maxxis. No Chinese tire makers achieved aboveaverage scores. Japanese tire brands averaged 834, followed by European brands at 833 and U.S. brands at 817.

VW, FAW extend partnership beyond 2016

Toyota to launch 20 new models by 2016

Volkswagen AG and China FAW Group Corp. have agreed to extend their partnership beyond its 2016 expiration date, the German automaker said on last month. The joint ven ture, wh ich makes Volkswagen and Audi cars, also will ex p a n d i t s p r o d u c t p o rt f o l io , Volkswagen said without elaborating. VW brushed aside German media reports that FAW had infringed on VW's intellectual property rights. VW also operates a joint venture in China with SAIC Motor Corp. Over the next three years, VW's two joint ventures will invest 9.8 billion euros (79 billion yuan) in the country, a VW spokesman said.

Toyota Motor Corp. will introduce 20 new models in China over the next three years to boost its business in the Chinese market, a company executive said last week. Of the 20 new models, two small cars - a three-box sedan and a hatchback -will hit the Chinese market in the second half of 2013, said Hiroji Onishi, a senior managing officer in charge of Toyota's China business, in a written statement issued during the Guangzhou auto show. The three-box sedan will be built at Toyota's joint venture with China FAW Group Corp., while the hatchback will be made at Toyota's partnership with Guangzhou Automobile Group Co. Onishi didn't disclose further details about the new models his company will launch in China from 2013 to 2015.

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Automotive Industry - Update

Pak-Suzuki Motor seeks nod to import Alto car parts from India Pak-Suzuki Motor Company has asked the Pakistan Government to permit the import of parts for the Alto model car from India so that it can revive the production of the vehicle, according to a media report today. Pak-Suzuki had discontin ued the produ ctio n of the Alto in July. This was done after it converted all models to Euro-II standards, except Alto as its “complete knock down” (CKD) kits that meet Euro-II standards are only available in India. India is the only country in the region producing EuroII compliant parts. The company had discontinued various cars that need to have Euro-II compliant engines from June. A spokesman for Pak-Suzuki, Shafiq Ahmed Shaikh, told media that 159 parts of the Alto, which are Euro-II compliant, are only made in India. The company has requested the government to allow import of these parts from India but so far nothing has been done, he said. The parts sought from India were included in negative list and this caused the discontinuation of Alto production in Pakistan, he said. However, this negative list would be eliminated by December, Shaikh noted. The Pakistan Association of Automotive

Parts and Accessories Manufacturers ( P AA PA M ) t o o h a s u r g ed t h e Government to remove these 159 parts from the negative list so that the vacuum in 1,000cc car segment can be filled, he said. PAAPAM had informed the Commerce M in ist ry t ha t clo sin g do wn the production of the Alto production had hit 76 small and medium sized auto parts makers with an estimated annual loss of Rs 700 crore. The association said these organisations employed over 12,000 people and had made investments of Rs 2 billion for the Alto. The vendors pointed out that India is the only country where Euro-II Alto parts are available and Suzuki Japan has made India an investment centre for research and development and engine manufacturing. Shaikh said the company had already informed the Commerce Ministry that India would provide a large market for exports and would be an alternative source of imports, resulting in cost benefit and reduced freight charges. He said Pak-Suzuki is in a crisis because of falling production and sales, especially due to influx of imported used vehicles coupled with n o permis sion for importing Alto parts from India.

Monthly AutoMark Magazine

Lifan KP 250 concept With 2,500 euros!

Italian design, construction and ... Chinese Japanese aesthetics is the original KP 250 presented by the i n t e rn a t io n a l e x h i bi t io n L i fa n m o t o r c y c l e C I M AM o t o r 2 0 1 2 . Definitely an impressive aesthetic concept of Lifan and familiar at the same time as the model resembles the middle street of another Asian manufacturer of Kawasaki. This is something that acknowledges the designer of compact air-cooled motorcycle with a 250 cc engine and 19 bhp, the Italian Nico Butti, in statements he gave to the British newspaper «Motorcyclenews»: It is actually inspired from Kawasaki. The instructions I had in my hands was to make something with a European aesthetic which at the same time be accessible (aesthetically) and the Chinese. "According to the British newspaper, this prototype could go into production within the next month a price that is just under 2,500 euros. If it could be introduced in the UK in a similar price it would make, if not cheaper, one of the cheapest bikes in any cubic for the British (and by ex ten sio n E uro pean ) ma rket .

China’s New Recall Law Presents Huge Risks For Foreign Car Importers A new law covering automotive recalls in China comes into force on 1 January 2 0 1 3 , a s p a rt o f t h e C h in es e go vern men t’s moves to in crease consumer protection . Whilst the regulations increase the obligations for manufacturers in terms of quality control and documentation, the new ru les a re als o lik ely to c rea te unanticipated disputes within the Chinese market. I n a ddit ion to re-d efin in g ‘manufacturers’ and ‘defects’, the new automotive recall law broadens the definition of ‘complainants’ to include any organisation or individual, not just the owner or driver of an automobile. Under the new law, any organisation or individual will be able to complain about possible defects in automotive products to AQSIQ (State Administration of Quality Supervision, Inspection and Quarantine). There is no requirement for the complainant to prove that he or

she is the vehicle owner, as under the current provisions. Under the new law, any organisation or individual will be able to complain about p os s ible de fect s in a u to m ot ive products… There is no requirement for the complainant to prove that he or she is the vehicle owner Risks of abuse are evident, especially in China where the government at all levels tends to interfere in private business. Manufacturers could expect to see a range of complaints from bodies without a genuine liability problem, who are motivated to disrupt competition in the market and protect local brands. Au to m ot iv e ma n u fac tu rer s a n d suppliers need to understand their obligations under the regulations and adjust their operation s in China accordingly, especially the focus on quality control. Con sidering the possibility that the new complainant rights may be abused, foreign vehicle

manufacturers should consider cooperating to promote a revision of the regulations in this matter. From 2013, manufacturers will be d efin ed as bein g o n ly C hin e se a u to m o ti ve m a n u fa ct u rer s a n d importers of foreign cars into China. Foreign manufacturers will now be excluded from recall liability in China. The intention here is to ensure that importers of foreign vehicles will not be able to shift the recall responsibility back onto foreign manufacturers in the future. Although foreign manufacturers will welcome the fact that they are now lega lly excluded from th e recall obligations, this does not mean that they can forget about recalls in China. In practice, the foreign mother company will still need to provide full support to their own importers and their localised manufacturing companies.

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Car / Light Vehicle Price List

SUZUKI

HONDA

Model Model MEHRAN VX 800cc Euro II MEHRAN VXR 800cc Euro II SUZUKI SWIFT 1.3L DX SUZUKI SWIFT 1.3L DLX SUZUKI SWIFT 1.3L Automatic CULTUS Efi VXRI Euro II LIANA 1.3L RXI MT PETROL LIANA 1.3L RXI MT (CNG) BOLAN VAN VX Petrol Euro II SUZUKI VAN CARGO Euro II APV 1.5L GLX MT (Petrol) APV 1.5L GLX MT (CNG) JIMNY JL SX MT JIMNY JL DX MT)

Price Price Rs. 575,000 Rs. 632,000 Rs. 1,151,000 Rs. 1,231,000 Rs. 1,366,000 Rs. 985,000 Rs. 1,382,000 Rs. 1,461,000 Rs. 654,000 Rs. 630,000 Rs. 2,099,000 Rs. 2,174,000 Rs. 1,074,000 Rs. 2,223,000

Model Honda CRV Automatic 2400cc Japan Honda Accord Automatic 2400cc Japan Honda City Manual 1300cc HYUNDAI Honda City Prosmatec 1300cc Honda Civic VTI Manual 1800cc Honda Civic VTI Manual SR (Oriel) Honda Civic VTI Prosmatec 1800cc Honda Civic VTI Prosmatec SR (Oriel)

TOYOTA COROLLA

Karakoram Motors Model Chery Standard Petrol Chery Standard CNG Chery Deluxe Petrol Chery Deluxe CNG Gonow Victor Gonow Troy Standard Gonow Troy Deluxe Gilgit (Double Cabin) Pet. Gilgit (Double Cabin) CNG Kaghan XL Petrol Kaghan XL CNG

Price Rs. 7,20,000 Rs. 7,70,000 Rs. 7,70,000 Rs. 8,20,000 Rs. 1,499,000 Rs. 9,99,000 Rs. 1,049,000 Rs. 3,85,000 Rs. 4,20,000 Rs. 1,285,000 Rs. 1,375,000

MASTER MOTORS DAIHATSU Model Model

Price

Master Highland M-260 Rs. 1,188,000 Master Forland M-330 SUP Rs. 1,235,000 Master Grand M-410 SUP Rs. 1,720,000 Master Grande Bus Chassis YL41B Rs. 1,625,000 Fuso canter (Japan) Bus Chassis Rs. 2,950,000 Fuso canter (Japan) Rs. 3,025,000 Fuso Prime Mover (Japan) Rs. 9,450,000 Unit Price without Deck

Price Rs. 7,117,000 Rs. 6,617,000 Rs. 1,497,000 Rs. 1,638,000 Rs. 1,851,000 Rs. 2,043,000 Rs. 1,971,000 Rs. 2,121,000

Model Model XLI VVT-i 1.3 M/T 1299cc Petrol GLI VVT-i 1.3 M/T 1299cc Petrol GLI VVT-i 1.6 A/T 1599cc Petrol XLI VVT-i 1299cc ECOTEC GLI VVT-i 1299cc ECOTEC 2.OD STD 2000cc 2.OD SALOON MT 2.OD SALOON SUNROOF ALTIS 1.6L Dual VVT-i MT ALTIS 1.6L Dual VVT-i MT SUNROOF ALTIS 1.6L Dual VVT-i AT Cruisetronic ALTIS 1.6L Dual VVT-i AT SUNROOF Toyota Avanza (Standard)

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

Toyota Avanza (Up Specfication)

Rs. 2,160,000

Price Price 1,537,500 1,672,500 1,827,500 1,602,500 1,732,500 1,607,500 1,809,000 1,914,000 1,902,500 1,997,500 1,997,500 2,087,500 1,960,000

Hilux Pickup 4x sc Model

Price

Brand New Toyota Hilux Pickup, 4x2, Single Cabin, (Local Assembled)

Rs. 1,763,500

Hilux Pickup 4x4 D/C Model

Price

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

TOYOTA VIGO DAIHATSU Model Model

Price Price

Rs. 2,878,500

LAND ROVER Price

Model

Vigo Champ M/T Rs. 3,178,500 DEFENDER (WHITE ,BLACK,STRONG BLUE & SILVER )

STATION WAGON 90 Rs. 3,560,000

Vigo Champ A/T Rs. 3,378,500 STATION WAGON 110 Rs. 4,260,000 (WHITE ,BLACK,STRONG BLUE & SILVER )

(N/A)

Price updated Dec- 2012

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December-2012

Upcoming Exhibitions in China - Update

Monthly AutoMark Magazine

The 9th China International Automotive Aftermarket (AAITF 2013)

The 9th China International Automotive Aftermarket Industry and Tuning (Guangzhou) Trade Fair, will take place on February 26-28, 2013, at China Imp ort & Ex port Fair Complex, Guangzhou, China. At the 3-day exhibition, AAITF 2013 will expect over 3,000 exhibitors and 250,000 visitors from all over the world, where more than 10,300 kinds of new products will be introduced under one roof. The show space will reach 220,000 s qua re m eter s, to ma k e it t he largest annual gathering for automotive aftermarket and tuning in the world. In addition, AAITF Committee provides all the participants with various industrial conferences, seminars, forums an d workshops for intern ationa l n e t w o r k in g a n d n e w b u s i n es s development. The famous experts will be invited to make speeches and discuss th e in dus try trends w it h g loba l audiences. The One-to-One trade matching program is another value-

added service for buyers and suppliers to meet their targeted clients with the help of AAITF Committee. The professional international buyers are encouraged to take part in AAITF, with free accommodation offered by the committee. Show Name: The 9th China International Automotive Aftermarket Industry and Tuning (Guangzhou) Trade Show Date: February 26-28, 2013 Official Website: www.aaitf.org Venue: China Import & Export Fair Complex, Guangzhou, China Address: No. 3 80, Yuejian g Zhon g R oad, Guangzhou, China Opening Hours: For Exhibitors For Visitors February 26 9am-5pm 9:30am4pm February 27 9am-5pm 9:30am-

4pm February 28 9am-5pm 9:30am4pm Exhibition Space: 220,000 square meters Exhibitor Number: Over 3,000 exhibitors Visitor Number: 260,000 visitors AAITF History AAITF is the premier trade show accompanying the fast development of China’s automotive aftermarket and tuning industry. Since the first debut in 2006, AAITF grows rapidly in recent years to be the world’s NO.1 exhibition of this industry. Compared with its first annual of 3,000 square meters in 2006, AAITF 2012 developed into 220,000 square meters, which set a new record for the auto aftermarket trade show worldwide. The show area of 260,000 square meters is expected in AAITF 2013! FOR MORE INFORMATION SEE THE ADVERTISEMENT ON PAGE NO.

The 16th International Expo For Auto Electronics, Accessories, Tuning & Car Care Products (CIAACE-2013)

16th China International Expo for Auto Electronics, Accessories, Tuning & Car Care Products (CIAACE 2013) will be held in the International Exhibition Center (New Venue) in 1-4, March, 2013, the exhibition was segmented into 7 categories, including Auto Electronics & International Pavilion, Auto Interior & Exterior Pavilion, Floor Mats Pavilion, Car Care Products Pavilion, Solar Film Pavilion, Auto Perfume, Seat Cover & Wheel Cover Pavilion, Seat Cover Pavilion. In addition, the CIAACE provides exhibitors and attendees with

various concurrent events like Forum on China Auto Consumption, New Products Release and more. CIAACE has been regarded as the must attend event in the China Auto Accessories Industry. Event Name: 16th China International Expo for Auto Electronics, Accessories,Tuning and Car C ar e Pr o du c t s ( CI AA CE 20 1 3 ) Date: March 1-4, 2013 Venue: ChinaInternationalExhibitionCenter (New Venue)

(88 Yuxiang Rd., Tianzhu Zone, Shunyi Dist., Beijing 101318, P. R. China) Schedule: Booth Setup: February 27-28 (8:3016:30) Open to Public: March 1 (9:00-17:00) March 2 (9:00-17:00) March 3 (9:00-17:00) March 4 (9:00-16:00) Booth Dismantling: March 4 (16:00) FOR MORE INFORMATION SEE THE ADVERTISEMENT ON PAGE NO.

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

Monthly AutoMark Magazine

Cabin Air Filter…

a part provides breath of fresh air Cabin air filters are typically located under a vehicle's dashboard or attached to the glove box. Others may be located in the engine compartment There are two types of air filters in your car, one is to provide clean, filtered air for engine’s health and other one is a cabin air filter which is for breathing clea n air fo r your h ealthy life. Many car owners don’t realize that they have a cabin air filter lurking in their car. However, cabin air filters provide a very important service to the driver and his passengers.Indeed, a car’s ventilation system is a breeding ground for a wide variety of microbes, including mold, bacteria and germs. When you turn your ventilation fan on, these micro-organisms are blown into the passenger compartment and inhaled by you and your occupants. This poses a potentially harmful health problem, especially for people with respiratory s en s it iv it ie s a n d fo r c h i ld ren . Hence a cabin air filter is an integral part of your car’s ventilation system that captures unwanted particles such as pollen, dust and other pollutants before they enter your car’s cabin, which can greatly compromise the quality of cabin air. It is also important due to the fact that car ca bin can con tain h igh concentrations of dust, pollen and other unwelcome air particles which can potentially affect the comfort and health of occupants and aggravate allergies

Type of cabin air filters: Pollen filter; a standard filter designed to capture particles including pollen, dust and other allergens. Electrostatics Filter; functioning much like a Pollen Filter. It also holds a static

or earlier depending on road and environmental conditions. Replace more often if you aredriving in a dusty, in dus trial or con struction zon e.

Simple w ay to clea n cabin air: charge that captures smaller particles like brake and tire dust. Charcoal Filter; Made from the same high quality filter material as the cabin air filter, the charcoal filter adds a layer of activated charcoal to absorb and remove odours. Cabin air filters are typically located under a vehicle's dashboard or attached to the glove box. Others may be located in the engine compartment. Filter loc at ions , requir ement s , a nd configurations vary by car type and manufacturer. See your maintenance manual for details. Over time filters become dirty which reduce your car’s ventilation, defrostin g, heating and AC cooling performance. Periodic replacement of a cabin air filter is a quick an d inexpensive way to get cleaner and fresher air inside your car and enhance de-frosting in winter. You should replace your cabin air filter as soon as possible if the interior air smells musty or mouldy. Do not attempt to clean and use the same cabin air filter again though. Your cabin air filter should be inspected on every oil change and replaced once a year or every 20,000km

Turn ON fan at high speed, outside air at circulation mode, set air control direction to face, heater to middle, turn on A/C and close all windows. Now take a can of aerosol household germs killer and spray on outside air vents below front windshield, this will clear and kill all germs that caused odour in the cabin through ventilation system. You can also choose air freshener instead germs killer that will bring fragrance air into your car’s cabin. This is a very fast and effective way to combat the problem of offensive odoursthroughout your vehicle. This simple task will improve in-car air quality for you and your passengers. Breathe clearly and enjoy healthy motoring! This exclusive article on Cabin Air Filter… a part provides breath of fresh air has been written by Mohammad Shahzad S.A.E., D.M.P. , specially for M on thl y A utoM ark Mag az ine . (Automotive En gineer/Doctor o f Motors) He is a Senior Group Manager for Customer Management Operations with The Brimell Group, Brimell Toyota and Brimell Scion in Toronto, Canada. Free advice for Automark readers; please do not hesitate to contact him at shah@b rim ellt oy ot a.c om or magazine@automark.pk

www.automark.pk | December-2012 | Page 37

Pakistani Companies Participate at Airtec2012 at Frankfurt Airtec Showcases Aerospace Technologies and Suppliers As Airtec 2012 opened at the Messe Frankfurt, at least one Pakistani company was seen displaying in Hall 11, at the CBI Stand, while some others were seen present walking the aisles to identify potential customers among the world’s leading aerospace technology companies. Specialized companies working in metal parts production , electronics and system integrations from Pakistan are already servicing customers in the aerospace market abroad. Companies like R&D Engineering,Mistequay, East West Infinity, Trojan Pakistan and many others are already in the aerospace export market. Products from these companies vary from high precision parts , specialized heat treated coated parts, electronic integration, radar and wireless products, antennae ,engineering design, reverse engineering, precision investment casting in low volumes and more. Government ventures into production of training aircraft and joint production of a multirole Jet Fighter , JF-17 “Thunder” with China has led to the development of a number of small specialized companies who are now flexing to look for markets outside Pakistan in order to balance their order books and divide their pie-charts. Facilities created for servicing of aircraft have also created SME business in aircraft business. An enterprising businessmen in Lahore brings in small plane kits, assembles these into planes, then ships them out to various destinations. Hybrid Aviation, from Lahore again runs an air taxi service but also runs an engine overhaul business as well as a flying school training students from several Asian and African countries to become commercial pilots. Airtec Frankfurt is one of the largest fairs of Suppliers for aerospace. It is a networking platform for the aerospace supply chain where SME firms can meet the buying agents of large corporations and be discovered or cement already existing ties. The fair offers a comprehensive program with several special events, theme parks and professional conferences. Also this year special shows will take place on innovative and pioneering technologies. In addition, prominent expert speakers will report on industry critical questions and discuss. This year, as part of the Airtec fair for the first time instead of the UAV World. UAV's (Unmanned Aerial Vehicles) are unmanned aircraft, which now meet various civil and military missions. The UAV market is growing rapidly. This increasing importance does the Airtec fair on the UAV World. To provide a forum for users, researchers and manufacturers, is also the first time in parallel instead of the UAV World Conference. The Pakistan entry of R&D Engineering was organised by the CBI, Dutch Ministry of Foreign Affairs, which has program in Pakistan for promotion of exports....

TiE Islamabad Charter Member Imtiaz Rastgar Mentors this team together with Peter Lichthart of CBI.

Monthly AutoMark Magazine

Exclusive Article by Sania Zaib Abbasi

Monthly AutoMark Magazine

Trends in Pakistan road freight industry 1985-2012 (An Overview Part I)

Sania Zaib Abbasi

Road freight transport is one of the most important components of the transport sector in developing countries. In Pakistan it accounts for three quarters of the initial inland freight tone-kilo metros and in expenditure terms it is equivalent to between three and four per cent of GDP.

The 18% demand for auto parts is consumed by trucks, buses & tractors. This demand is met by imports which caters 22% while the remaining 78% is supplied by the local manufacturers. The overall study was carried out under a program of cooperative research between the Overseas Unit of the T ra n s p or t a n d R o a d R e s ea r c h Laboratory and the National Transport Research Centre, Islamabad. It is intended that the results of the research will be useful both in formulating general freight transport policy and in assisting with the more specific aspects of modeling vehicle operating costs used in road invest men tal pla nning .

VEHICLE IMPORT AND ASSEMBLY During the 1970s and 1980s Pakistan’s freight vehicle fleet was dominated by one vehicle type: a two axle Bedford truck with 7 tons carrying capacity and a 98 hp engine. The design of this vehicle has changed little over the past 30 years. Bedford trucks were imported in completely knocked down” (ckd) form and assembled locally. Over the years,

the Iocal content was progressively Increased and by 1987 amounted to about 55 percent of the vehicle value.

During the 1970s the protection given to the Bedford helped to prevent other makes from becoming more established. However during the 1980s protection was relaxed and the import and assembly of many Japanese trucks became possible. In 1979 Bedford sales accounted for over ninety percent of total truck sales In Pakistan: since then the ratio has declined and by 1984 they accounted for only 58 per cent of total sales. In Pakistan three principal makes of Japanese trucks (namely Isuzu, Hino and Nissan) are assembled in Pakistan. In 1986 the local content by value of these vehicles was well below 20 per cent. Details of the most common vehicle types used by the private market are shown in Table.

Under agreements with the Government each manufacturer is obliged to increase progressively the local content of the imported vehicles that it sells. Other vehicle makes have been brought Into Pakistan already assembled. Many v er y o ld s e co n d h a n d v e h i cl es (Particularly Mercedes and Bedford trucks) were brought Into Pakistan by the Afghan Refugees.

The NLC imported Mercedes Benz, Saviem, Hino and Fiat trucks. A number of Mitsubishi tractor units have also been Imported privately under a regulation which allows tractor units to be Imported as “machinery”. Three-axle vehicles made up four percent and tractor trailer combinations another three per cent of the total surveyed: in both categories Nissan was the dominant make. In Pakistan’s commercial fleet semi-trailers are nearly always operated with the same tractor unit and for the purposes of this report they are regarded as one vehicle. Although the NLC does use draw-bar trailers these are very rare in the commercial fleet. Vehicle bodies are made locally in Pakistan and are added to the truck chassis after it has left the factory. Apart from tankers, vehicle bodies are made almost exclusively of wood and in most cases are highly decorated. There is usually a purpose built space on top of the cab where assistants and second driver can rest or sleep while the vehicle is in motion. In all categories, apart from tractor, trailers, high sided bodies are the most common; accounting for 80 per cent of the total. The flexibility offered by high sided vehicles is most appropriate to Pakistan’s conditions. They can easily carry loose building materials, general cargo and animals. Tarpaulins are carried for when it rains.

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Exclusive Article by Sania Zaib Abassi - continued

Monthly AutoMark Magazine

The past five years have been an eventful ride for the Global Heavy Duty Truck Manufacturing Industry. IBIS World estimated that industry revenue grow by just 0.9% annually during the five years through 2012. While Western economies were struggling to keep their economies afloat, China and other developing countries bucked trends by posting healthy increases in demand. In 2009, China was the only country in the world to increase its truck output. Pakistan’s high temperatures make boy bodies less appropriate because of the difficulties of carrying out manual lo a d in g a n d un lo a di n g in h o t unventilated conditions. Flat bodies are most common with tractor-trailers. These are most suitable for carving bagg ed com modities , co nta in ers and large sized loads such as motorcars. Low sided Bedford is mainly used for transporting sand and gravel. After high sided bodies, tank bodies are the second most important body type accounting for about 8 per cent of Bedford and about 23 Percent of the Japanese two and three-axle trucks.

VEHICLE MODIFICATIONS AND REPAIRS Most trucks in Pakistan, including the n e w e r J a p a n es e v eh ic l es , a r e strengthened after they leave the factory to take heavier loads, some of the modifications which are frequently made, the most popular being the strengthening of the chassis, axle springs and engine compartment. Wheel rims, tyres, and axles are also often changed for heavier duty items. By contrast little evidence was found to suggest that brakes are improved to cope with the increased loads. Bedford trucks designed to take 7 tons are commonly modified 10 carry 11 tons, while two axle Hino, ISUZUS and Nissans designed 10 take 11 tons will carry 16 tons, The two-axle Japanese trucks that are converted to three-axle vehicles carry up to 30 tons, The larger

COMMON TRUCKS IN PAKISAN

two-axle Nissan and Isuzu trucks have often been converted to tractor units with the addition of a “fifth wheel”. In addition the chassis of the semi-trailers are strengthened; loads of 55 tons and more are not uncommon for tractortrailer combinations. No evidence was found to suggest that the performance of existing engines is improved nor that more powerful engines are put into existing vehicles. It appears that attempts to improve productivity by modifying vehicles is directed entirely towards carrying heavier loads rather than to running faster. On the other hand, second hand veh icles are a ls o s tren g th en ed . Although some authorities are reluctant to register the use and conversion of the heaviest trucks others are less hesitant. A high proportion of the heaviest trucks a re reg is te red in La s B ela , in Baluchistan, rather than in Karachi, Once a vehicle is registered by one authority there is little to stop it being us ed all o ver Pak is ta n. V ehicle modifications and repairs are carried out by groups of small workshops, Each workshop has relatively little working space, employs no more than a handful of people and has only a limited access to machinery, They tend to specialize in providing a particular service, but in most towns a wide range of skills and machine tools are available and usually a full range of vehicle repairs can be carried out. Spare parts for the Bedford truck are cheap and very widely available, mainly being made In Pakistan. In most cases if a part is not immediately available it will be made locally, in the larger towns original parts for the Japanese trucks are available, but these tend to be about three times the price of the equivalent part for the Bedford.

SUMMARY OF REVIEW I) Overall the road freight transport industry is very competitive and the existing vehicle fleet is run efficiently, however there appears to be scope for the introduction of greater numbers of Iarge vehicles. ii) Road freight transport has been

growing in importance In Pakistan, in 1983 it accounted for 70 percent of total inland freight involvement. iii) During the 1970s and early 1980s the two axle 7ton Bedford truck dominated the industry, however during the last five years newer and larger two-axle Japanese trucks have taken an increasing proportion of the market. iv) Most trucks in Pakistan are strengthened to take heavier loads, it is common for the Bedford which are designed to carry 7 tons to take 11 tons and for two-axle Japanese trucks designed to carry 11 tons to transport loads of 16 tons, Three-axle vehicles carry Up to 30 tons and tractor trailer units will carry over 50 tons. v) Two-axle Bedford trucks appeared to be only marginally profitable while larger capacity trucks were found to be much more profitable, The internal ratio of return(lRR) for twoaxle Japanese trucks was estimated to be about 15 per cent while for three-axle Japanese trucks the IRR was estimated to be over 50 per cent. vi) Small repair workshops are widely distributed throughout Pakistan. Spare parts are plentiful, many are factory made in Pakistan and some are made to order in the small workshop.

About writer: Sania Zaib Abbasi is BS management sciences from University of Karachi. She served as a teacher at Fazaia College PAF Base Masroor Karachi. She got appointed as assistant editor at Monthly Automark Magazine. Her core duties include assisting the head; to ensure 360 degree marketing and promotional activities of the magazine as well as monthly magazine articles’ review and web content writing. She believes in civilized social development and aims to prove her words to acquire her thoughtful gains. As freight forwarding is her family business, utilizing her heirdom association with automotive industry, she opts to share her reviews about Heavy duty vehicles in Monthly Automark magazine

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International Automotive Industry - Update

Monthly AutoMark Magazine

Worldâ&#x20AC;&#x2122;s Top 25 Car Markets down 0.5% in September 2012 In September, the world's Top 25 car markets, counting 89.2% of total world sales, posted 5.991.504 sales, down 0.6% from previous year and breaking a series of 9 consecutive growing months. Yearto-date sales were 53.5 million vehicles, up 6.7%. In September, the world's Top 25 car markets posted a slightly negative performance as effect of many combined factors. The economic recession had heavily penalized all the European markets and Germany, the 4th world's market, posted the most negative month of the year, declining 11.1%., while France was 17% down, Italy was down 25.3%, Spain 36.4%, Netherland 26.4% and Belgium 18.7%. Only the Great Britain was positive among Europeans, posting

398.672 sales, up 7.4% and outpacing France in 9th position. Between Europe and Asia, Russia posted the 30th consecutive year-on-year monthly increase, holding the longest positive string in the world. This month the increase was 10.2% and Russia confirmed its world's 6th position. In Asia, the Chinese riots and protests against Japan and Japanese products, severely hit all Japanese brands and the market was down 7.9%. In Japan, after the end of government incentives, the market was stable (-0.5%) after 12 growing month. South Korea, the 12th market, lost 6.6% confirming the negative momentum caused by a slow economy trend. India, the 7th world's market, grew only 4.1%, still penalized by Maruti short supply.

Again in Asia, Thailand confirmed to be the fastest growing global market, surging 99% and outpacing in the month South Korea and Italy for the 11th position. Others positive Asian markets were Indonesia, 16th, up 5.0% and Australia in 14th position, up 9.0%. In America, the North area confirmed the momentum, with USA up by 13.3%, Canada, the 10th world's market, up by 6.4% and Mexico, the 15th market, up by 8.1%. In the South, Brazil, the 4th world's market was down 5.4% and Argentina the 18th market, was down 13.2%. In the year-to-date ranking, three countries had gained a position this month. Great Britain, pushed by strong September seasonality, jumped in 8th position. Turkey, which interrupted in September a long negative string posting a +16.2%, recovered one position, surging in world's 20th, ahead of Saudi Arab. Finally, South Africa, the only African country in this rank, outpaced Belgium in 24th, posting a 1.8% of increase.

Suzuki S-Cross wins Best Concept Car award at 2012 China Show Suzuki S-Cross has won the 'Best Concept Car Award' at 10th China International Auto Expo. Scheduled to compete with the Nissan Qashqai, once successfully launched, the vehicle will be a larger C-segment crossover based on an all new platform. Powered by either a 1.6 liter petrol or a 1.6 liter turbodiesel engine, the vehicle will feature the Suzuki i-AWD intelligent four wheel drive system. Comfortably seating upto five adults in its cabin and enough boot space for holiday luggage, Suzuki S Cross is ideally suited for younger buyers with sporty and adventurous lifestyles. Suzuki states that production model will be one of the lowest CO2 emitting vehicles in its segment. The S-Cross will measure 4310 mm in length, 1840 mm in width and will stand 1600 mm tall while it will sit on a 2600 mm wheelbase and will possess 20" chrome wheels with 235/55R20 tyres.

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MADE IN PAKISTAN MOTORCYCLES RETAIL PRICE LIST

70cc Motorcycle

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

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

Sr./ No. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45.

Retail Price Rs. 42,500/= Rs. 42,500/= Rs. 42,000/= Rs. 42,000/= Rs. 41,000/= Rs. 42,500/= Rs. 49,000/= Rs. 41,500/= Rs. 45,000/= Rs. 42,500/= Rs. 46,000/= Rs. 47,000/= Rs. 42,500/= Rs. 67,500/= Rs. 43,000/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 44,800/= Rs. 41,500/=

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

Retail Price Rs. 42,500/= Rs. 42,000/= Rs. 47,700/= Rs. 46,200/= Rs. 42,500/= Rs. 42,000/= Rs. 42,500/= Rs. 42,000/= Rs. 40,000/= Rs. 45,50/= Rs. 43,000/= Rs. 44,500/= Rs. 42,400/= Rs. 43,000/= Rs. 42,500/= Rs. 42,500/= Rs. 45,000/= Rs. 42,500/= Rs. 40,000/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/=

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