Automark magazine july 2013 by Mustafa Hanif

Generated by Foxit PDF Creator ÂŠ Foxit Software http://www.foxitsoftware.com For evaluation only.

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

CONTENTS

Monthly AutoMark Bike makers looking forward for their revival Exclusive Article by Ali Hassan

12-14

The Motorcycle Industry in Pakistan: Investment Opportunities and Prospects (Part I) Exclusive Report by M. Yousuf Shaikh

15-17

Suzuki unleashes its latest heavy bikes in a glittering launch event in Lahore

Potential of Construction Machinery in Pakistan Exclusive Article by Syed Mansoor Ali

20-21

General Insurance A boon or a bane for Pakistan Exclusive Article by Azam Sultan

24-25

A Step Toward A Better Choice Pak Oasis Launched Solar Panels Production in Pakistan Exclusive Article by Asif Masood

31-32

Prime Minister Nawaz Sharif maiden visit to “China” Exclusive Article M. Yousuf Shaikh

33-36

CBI Workshop in Karachi & Lahore

An inflationary budget 2013-14 without any relief

38-39

Local Assembled Car Rates

Volvo Trucks showcases total solutions

visit: www.automark.pk

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

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

AUTOMARK Commercial significance of Karachi

Editor M. Hanif Memon Technical Editor Muhammad Shahzad

Advertising Manager Tahir Siddiqui

Circulation Manager Abdul Khaliq

Graphic Designer Salman Hanif

Web Master Murtaza Hanif

CONTRIBUTING IN THIS ISSUE Muhammad Shazad Asif Masood M. Yousuf Shaikh Ali Hassan M. Owais Khan

Advisors Syed Mansoor Rizvi Principal Officer M/s. CNH Services (Pvt) Ltd. Karachi

Advisors Imtiaz Rastgar CEO, Rastgar Group & CBI External Expert, Ex-chairman EDB Islamabad Haider Nawab Advisor Planning & Development Toyota Southern Motors Toyota Defence Motors Karachi Muhammad Yousuf Shaikh Founder & Chairman Pakistan China Motorcycle Industry Council Karachi Abdul Majeed Sheikh President, AOTS-ABK Dosokai, Karachi Regional Center Director Industrial Lesion, NED University, Karachi Engr. IHT Farooqui GM Plant P.M. Auto Industries Hyderabad J. Pereira GM After Sales Al-Haj Faw Motors (Pvt) Ltd. Karachi

The views expressed by contributing writers and comments do not necessarily reflect the views and policies of the Monthly AutoMark magazine's management. AutoMark REGD: SC-1330

Published every month by M. Hanif Memon Postal Address Active Communications D-68, Block-9, Clifton,Karachi Visit us: www.automark.pk E-mail: automarkpk@gmail.com Tel : 021-32218526 Mobile: 0321-2203815

The largest metropolis of Pakistan on modern lines with infrastructure development and execution of mass t r a n s i t p r o j e c t , pa r t i c u l a r l y establishment of metro-rail across Karachi, execution of rapid bus service, advanced traffic management system. The city holds a unique i m p o rt a n c e a s t h e f i n a n ci al , commercial and industrial hub of Pakistan which accounts for a lion’s share in the country’s revenue generation. The sea ports of Karachi handle 95 percent port activities. More than 16000 industries were operating in the seven industrial zones of Karachi. There were 1.5 million SMEs and cottage industries a nd ar ound 500 marke ts and commercial centres which collectively provide bread and butter to millions of people. The projects like masstransit, solid-waste management and sea water desalination plant are indispensable for Karachi. There is a dire need to establish combine effluent treatment plants in all the industrial zones of Karachi to protect the environment. The mega city, keeping in view, the unrest and precarious law and order situation also needs another Expo Centre in the area of Karachi Airport whereby the foreign exhibitors may come to participate in the exhibitions and fly back. Of course, new five star hotels are also required to be established in the adjoining area of new expo centre in the vicinity of airport. Karachi also requires a master safety and security plan with a rapid police force. The city also requires efficient water supply and sewerage system. Necessary project can be initiated on Public-Private Partnership Basis or Build-Operate-Transfer (BOT) basis.

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Automotive Sector - Update

Bike makers looking forward for their revival EDB warns non-compliant assemblers

The EDB also informed the assemblers that the current Customs Computerized Clearance System of PRAL i.e. one customs system, applicable for the clearance of consignments imported under SRO 655 and SRO 656 would not be accessible for the clearance of consignments after June 30, 2013.

The Engineering Development Board (EDB) is in the process of forwarding the records of such non-compliant assemblers to the Federal Board of Revenue (FBR) / Collect orates /RTO as well as to Excise and Taxation Departments and PSQCA for the purpose of initiating chain audits and stopping certification and registration of their vehicles. The EDB cautioned all the assemblers in third week of June through a letter regarding illegal assembly of vehicles and non-revalidation of manufacturing certif icate and list for 201 3-2014. The OEMs of vehicles, who avail the c onc es si ona r y r eg i m e of SR O 656(I)2006 for the assembly/manufacturing of vehicles are liable to follow all the conditions of the aforesaid SRO. As per condition of the SRO, it is mandatory for the OEMs to make direct import of CKD components duly approved by the EDB under condition (iii) of the SRO or procure them from the sales tax registered local vendors,

manufacturing such components. As such, for the legal assembly of vehicles, procurement of components is allowed either through direct imports and its release through PRAL’s OCS or procurement from the local sales tax registered vendors, as mentioned above. As per condition (xii), in case of violating of any of the condition of the SRO, EDB may suspend or not revalidate certificate for assembly of vehicles and list of importable components. It is, therefore, obligatory for the OEMs to operate w it hi n p ar am eter s of th e sa id notification as non-compliance to it attracts proceedings under the law. The OEMs operating outside the ambit

of the regulatory regime of SRO 656 are th erefor e not entitled to EDB’s m an u fa ct u r i ng ce r ti fi c at e a nd concessionary import of inputs i.e. CKD parts for the assembly/manufacturing of vehicles. The EDB has observed that majority of OEMs after enrolling under SRO 656 and obtaining manufacturing certificate and list of importable components resort to procuring their parts/components from commercial importers/traders instead of direct imports. This misprocurement leads to illegal assembly of vehicles, resu lts in substandard production of vehicles and above creates an uneven playing field for genuine players. Most importantly, firms engaged in such unscrupulous activity are putting a colossal loss dent on national kitty through evasion of duties and taxes. The EDB said that the units which are operating in non-compliance to the conditions of the SRO, whether partially or fully procuring components from illegal sources and are engaged in illegal assembly, shall not be facilitated for revalidation of their manufacturing certificates and lists of importable inputs from the fiscal year 2013-2014. The EDB also informed the assemblers that the current Customs Computerized Clearance System of PRAL i.e. one customs system, applicable for the clearance of consignments imported under SRO 655 and SRO 656 would not

Ministry of Industry Government of Pakistan

www.automark.pk | July-2013 | Page 12

continued on next page

Generated by Foxit PDF Creator ÂŠ Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Exclusive Article - continued be accessibl e for the clearance of consignments after June 30, 2013. All the consignments imported under SRO 655 and SRO 656 by the approved vendors and vehicle assemblers would be cleared through WeBOC.

Under the system, following business process has been developed by Director WeBOC as EDB shall up-load the file in respect of each quota approval as per prescribed format, the system shall assign unique record number of each item, agent/trader shall claim quota against that system generated unique number while filing GD, assessing officer shall assess the GD after viewing the details of claimed quota and the system shall auto debit the claimed/assessed quantity.

Bike makersâ&#x20AC;&#x2122; hope

The government has raised the general sales tax (GST) by one per cent to 17 from 16 per cent and to 19 per cent on non registered buyers in the Budget 2013-2014, raising the bikes prices while the industry is analyzing the impact of other taxation measures. Chief Coordinator Association of Pakistan Bike Assemblers (APMA) Mohamamd Sabir Shaikh said that Chinese bikes have become costlier by Rs 600-1,200 depending on the increase of one and two per cent of GST on registered and non-registered dealers while Japanese bikes price has risen by Rs 1,000-2,000. He was of the view that increase in taxes and duties would improve revenue and bring many sectors into the tax net. However, he added businessmen had already warned the government not to impose any fresh taxation measures as it would trigger only inflation besides raising cost of doing business.

In the last 10 years, there was huge sales tax evasion and under invoicing of imported parts due to non registration in sales tax by auto sector dealers all over Pakistan. APMA coordinator was of the view that this is high time that the government should frame such policies which would lure new investors for which the government has to simplify laws as there are reports of tax evasion, a uniform policy is needed. vast experience of running the affairs of finance ministry. They believe that Mr. Dar will take such steps which would encourage assemblers to come out with new models especially replacing the decades-old 70cc bikes which do no t e xi st in any c o untr ie s.

The Chinese bike assemblers, he said, have set their eyes on all four federal ministers belonging to ministry of industries and production, ministry of commerce, ministry of finance and ministry of science and technology. The assemblers are highly hopeful especially from Mr. Ishaq Dar due to his

Sabir said Prime Minister Nawaz Sharif has already announced that all the ministers of their relevant ministries would review the decisions and its implications after every three months. Prime Minister gave his ministers tough task, asking them to deliver on promises made by the PML-N in its election manifestos, set priorities and targets within two weeks, reduce non development expenditure by 30 per cent, and put the economy back on track. Chief Coordinator APMA Sabir Shaikh frankly said that there has always been a turn of Atlas Group and Indus Motor Company (IMC) in influencing the government in policy and taxation measures including all four ministries. In case the new PML-N government maintains the same policy, which had been vogue for the last 14 years with a monopoly of some assemblers, then the auto sector will fail to prosper in coming years. It is high time that the government should take into account the

www.automark.pk | July-2013 | Page 13

continued on next page

Generated by Foxit PDF Creator ÂŠ Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Automotive Sector - Update

'Indo-Pak trade can increase by $7.5bn per annum' Pakistan and India have the potential to take bilateral trade from current $2.5 billion to $10 billion per annum and both countries should focus on expanding cooperation from 'goods' to 'services' as well as build capacity of public departments to facilitate the growth of trade up to full potential. This was stated by MAP Services Group Managing Partner Huma Fakhar while exchanging views with Islamabad Chamber of Commerce and Industry President Zafar Bakhtawari during her visit to ICCI on last week. She briefed the ICCI president about the activities of MAP Services Group and informed that the group is working on Indo-Pak Trade and Investment Project to promote trade and investment between the two countries. We are also in the process of setting up an Indo-Pak Trade Portal for SME s and young

entrepreneurs to help them in improving trade. S h e i d e n t i fi e d r e se a r c h a n d development, information technology, telecom, entertainment, agriculture, textile, pharmaceutical, automotive parts, light engineering an d food packages as potential areas of mutual cooperation between Pakistan and India and added that Pakistan's SME sector can also tap into knowledge economy of India. She said that despite non-tariff barriers, the value of Indian goods entering

Pakistan through informal channels was around $4.2 billion annually and said that the best way to promote formal trade is to make easy th e trade procedures and processes. She said customs approvals should be automated with provision of single window facility and helpdesks at customs check points to facilitate the traders of both countries. She said MAP Services would keep updating ICCI about the progress of Indo-Pak Trade and Investment Project so that the interested members of ICCI could benefit fro m this initiativ e.

development of Chinese bike assemblers and their thriving vendor base relating to production, sale and market share before finalizing a new policy for the sector. In the past, Atlas Honda, being the number one assembler and market leader, had remained in the forefront in guiding the government. Sabir said all zero rated imports must be fixed at minimum fiv e per cent customs duty. In auto sector, all the Input Output Ratio Certificates (IORCs), which are valid up to June 30, 2013 should not be revalidated and one customs duty on imported parts and one customs duty on CBU imports (e.g. for two wheelers customs duty on CKD parts (localized or non-localized) should be fixed at 25 per cent. Currently non localized parts have 10 per cent customs duty and duty on localized parts is 38.75 per cent. He said customs duty on CBU two wheelers should be not more than 45 per cent which is currently over 50 per cent. The government which issues list for import through EDB to OEMs and assemblers sh ould be abolish ed

immediately as it was cumbersome and time consuming exercise. Besides, he said the entire auto sector is burdened with many SROs and notifications and there must be one policy document or the SRO or notification for entire auto sector which will discourage corruption. Valuation advises and ruling issued in the last 10 years on auto sector should be scrapped immediately as they had only encouraged informal trade through various channels and mis-declaration. He said there is a dire need for posting of reliable, sincere and reputed officials at the dry ports which had never been involved in an y corruption cas es. Sabir said the government should also strive hard to register all dealers of two and four wheeler including all the entire auto sector stakeholders in the sales tax net. In the last 10 years, there was huge sales tax evasion and under invoicing of imported parts due to non registration in sales tax by auto sector dealers all over Pakistan. APMA coordinator was of the view that this is high time that the government should frame such policies which would

lure new in vesto rs for wh ich the government has to simplify laws as there are reports of tax evasion. A uniform policy is needed. He said the government should also ponder in fixing an age limit of two wheelers as people still own decades old bikes. Sabir Shaikh said exports of bikes have sharply fallen for the last over one year due to bureaucratic red tape as the export refund to Afghanistan, the leading importer of Pakistani bikes, were not being entertained as a result of change in Afghan customs procedure. The exports refunds of many industries had been in doldrums as the Afghan Customs had been computerized which did not provide a copy of the invoice of the cl eared consignments to the importers. The Afghan customs was relying upon a computer generated invoices and did not provide any document on the clearance of goods to the Pakistani exporters. He said the government should find a way to resolve the issue otherwise exports of bikes and other products would continue to suffer.

www.automark.pk | July-2013 | Page 14

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Exclusive Report by M. Yousuf Shaikh

Pakistan

PAKISTAN CHINA MOTORCYCLE INDUSTRY CONCIL

The Motorcycle Industry in Pakistan: About The Pakistan China Motorcycle Investment Opportunities Industry council and Prospects (Part I) (PCMIC) This organization is 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, a business consultant and an avid follower of the Chinese Motorcycle Trade & Industry markets. The Pakistan China Motorcycle Industry Council (PCMIC) has been created as an instrument to aid the harmony between the Pakistani importer cum motorcycle assemblers and Chinese exporter cum motorcycle manufactures. The PCMIC’s main goal is to smooth the way for further expansion by all parties and to aid in communication and develop better relationships. Global Chinese motorcycle makers are welcome to seize opportunities in Pakistan and further increase their market shares as currently 55% are Chinese branded motorcycles and 45% Japanese.

The report title ‘Motorcycle Industry in Pakistan; Investment opportunities and Prospects’ presents a valuable resource on Pakistan’s leading and potential motorcycle industrial sectors highlighting useful information and data in a concise way so as to facilitate entrepreneurs with informed decision making with regard to investment in a particular sector. The report highlights sector situation analysis including existing capacity and production trend, trade data, t e ch n o l og y l ev e l , i n v es t m e nt opportunities, export potential etc. Efforts have been made to enlist

M uha mmad Y o us uf S hai kh The Founder & Chairman of Pakistan China Motorcycle Industry Council, offers his analysis of the motorcycle trade & industry trends from Pakistan & China. As the chairman PCMIC working with motorcycle trade & industry for over two decades, Yousuf believes that new projects with foreign investment particularly Chinese investment could help Pakistan to design and produce its own automobiles mainly motorcycles & its engines, as Pakistan have strong brotherly & bilateral trade relation with Chinese. pakchina.mic@gmail.com

l eadin g play ers in t he se ct or. Possibilities for foreign investors, wherever possible, of entering into technical collaboration or joint venture with Pakistani companies have been highlighted. In addition, outsourcing po ssi bi lit ie s, especially in t he motorcycle parts and components sub-sectors, have also been made part of the report. DISCLAIMER T he t eam of P aki s t an C h i na Motorcycle Industry Council’s experts, Global Auto Sources (GAS Magazine) an d C HI NAM OT OR M agazi n e endeavor, using their best efforts in

the time available, to provide high quality services hereunder and have relied on information provided to them by a wide range of other sources. However, they do not make any re pres en tat io ns o r w arran t ie s regarding the complete ness or accuracy of the information included this report. The information provided in this is report does not necessarily represent t he vi ews or po sit io ns of an y stakeholder. April 12, 2013

www.automark.pk | July-2013 | Page 15

continued on next page

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Automotive Sector - Update

Release Rights of the report The author give release right of the report in P.R. of CHINA to CHINAMOTOR Magazine and in Islamic Republic of Pakistan to Monthly AUTOMARK Magazine. This report has been prepared by Muhammad Yousuf Shaikh, Founder & Chairman, Pakistan China Motorcycle Industry Council (PCMIC). PCMIC HOUSE; 99/II, 3rd Commercial Street, Phase IV, Karachi 75500, Pakistan. Tel: 0092 21 35381835, 0092 21 38108345 , Cell: 0092 300 2613692 Email: yousufshaikh@hotmail.com

CONTENTS EXECUTIVE SUMMARY CHAPTER 1.0 CHAPTER 2.0 CHAPTER 3.0 CHAPTER 4.0 CHAPTER 5.0 CHAPTER 6.0

INTRODUCTION THE MOTORCYCLE INDUSTRY ORIGINAL EQUIPMENT MANUFACTURERS AND STAKEHOLDERS PARTS & COMPONENT SUPPLIERS (VENDORS) EXPORT STRATEGY INVESTMENT OPPOURTUNITIES AND PROSPECTS

EXECUTIVE SUMMARY P a kis ta n mo tor c yc le sec t or — investment opportunities and prospects, Pakistan motorcycle industry sector is vibrant, flourishing and exemplary, as it achieved 95 percent localisation of body parts of only small engine capacity up to 70cc through latest technology transfer, billions of rupees investment and hundreds of thousands of skilled workers generated. But industry still f ar aw ay of m anu fac tu ri ng a nd assembling of new technology, new design motorcycle up to 100 cc to 250cc as Pakistan market have big gap and potential of modern low cost motorcycle which is possible from china and sure it is great opportunity for Chinese bikes

manufacturers. The sector progressed tremendously so far due to consistent policy of the government, while it gave protection to local and foreign investors to expand its businesses locally as well as globally. The sector is apparently standing on its feet as it is not only able to meet the local demand but soon should also capable of exporting various models to various countries, resulting in becoming a strong foreign exchange earning arm of the country. Motorcycle production in Pakistan has incre ased in past 12 years. It has increased from a mere 100,000 units at the start of the century to around 2.0 million this fiscal. No other industrial

sector has shown high and sustained growth during the past one decade. In fact Pakistan has emerged as global l ea d er i n p r od u c ti on o f 70 c c motorcycles. Now even new 125cc bikes are also being exported. However the proposed abrupt change in policy has promoted the confidence o f for eig n invest ors and loc al manufacturers, following government initiatives to incentivise any new bike maker to enter the Pakistani market to produce new technology motorcycle up to 100cc at lower rate of customs duties. The plan to allow any new investor to import all motorcycl e parts of new technology and new design motorcycle

www.automark.pk | July-2013 | Page 16

continued on next page

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Exclusive Report - continued

upto 100cc to 250cc at 10% rate of custom duty will be reinforcement of the previous policies and will encourage all original equipment manufacturers (OEMs ). The new policies wil l be support and in the interest of the country and future industrialisation, which will help to introduce new technology and new design motorcycle from global manufacturers especially by Chinese motorcycle manufactures. Pakistan needs foreign investment particularly Chinese investment in motorcycle industry sector! However, the country attracting investment by catering to specific investment proposals as it’s mo st vibrant sectors where existing domestic and foreign are also plan to investing. The local industry, based on the projection of increase in demand, has a lr ead y emb ar ked on c ap a ci ty enhancement plans and by the end of current fiscal year will have invested around $100 million out of which a size able amount is already invested while plans for rest are already submitted. The proposal given to the government reflects that the existing OEM’s also have investment of million dollars in the initial years. So exemptions granted to new entrant should also allow to existing small & large assemblers to enhance their capabilities to produce new technology motorcycle, when all existing motorcycle manufacturers have readily pay high duty on the import of parts that are not being produced in Pakistan. Another good news aspect in this regard is the government allows the new investors particularly foreign investors to import parts from anywhere to assemble the bikes but most probably from China to encourage the new investment from Chinese manufacturers to bring new technology as the existing players have all introduced Euro 2 engines into the market through imports parts from china. Current players are

even willing to import hybrid and EFI based engine. After showing a compounded growth rate of 58% in the past 5 years, sales of new motorcycles in Pakistan appear to be stagnatin g at between 1750 – 20,00,000 units per annum. This Report titled “the Motorcycle Industry in Pakistan: Investment opportunities & Prospects” aims at identifyin g:

CHAPTER 1 INTRODUCTION 1.1 Background Th e auto industry of wh ich the motorcycle industry is a part has got deep backward (metals such as steel, aluminum. Copper, rubber, chrome, nickel, plastic, paint, glass, textiles, electrical, capital equipment, trucking, warehousing) and forward (dealerships, retailers, banking, credit and financing, insurance, logistics, advertising, repair and maintenance, petroleum products, services, parts) linkages as such any major shifts in demand are felt in a variety of other industries. The industry Worldwide has seen a tremendous growth in the past few years. Production in 2012 has been estimated at 60.0 million units with China producing 19.0 million units. This global surge in demand has also been felt in Pakistan where the industry in the financial year ending June 2012 manufactured more than 1950,000 units. Th er e are currently 93 Original Equipment Manufacturers (OEMs) in

the Industry. These OEMs are supported by nearly 2,000 parts and component manufacturing units employing close to 50,000 persons. The industry is volume driven and needs a critical mass before costs and hence prices can start coming down. This critical mass has been reached and the prices in Pakistan have on the average come down by 30% in the past 5 years. The development of China as the major player in the global motorcycle industry has been achieved by linking its strong domestic demand to the abundance of C h i n es e o w n t e c h n ol og y a nd independent manufacturing. Pakistan has similar situation with its current suppressed demand. As compared to other industries in which competitiveness can only be achieved with high levels of human capital, the motorcycle industry is more concerned with better management of human resources and high levels of productivity at all levels, i.e. OEMs as w e ll a s p a r ts a nd c om p one nt manufacturers.

1.2 OBJECTIVES AND SCOPE OF THE REPORT The primary objective of the report is to carry out the local motorcycle industry along with promotion of the sector and recommending the investment in the sector for both new and existing players. Scope of work included carrying out a Survey of the OEMs, component manufacturers, government agencies and other stakeholders. (To be continued.....)

www.automark.pk | July-2013 | Page 17

Generated by Foxit PDF Creator ÂŠ Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Automotive Sector - Update

Naghmi given EDB CEO's charge to himself?

The appointment of Qazi Ibad had been challenged by his predecessor, Aitzaz Niazi in the IHC on the plea that since his extension case was pending with the performance evaluation committee, the appointment of his successor was malafide. The Ministry of Information and Broadcasting recently floated advertisements in the media for appointment of new Chief Executives officers (CEOs) and Managing Directors for Public Sector Entities (PSEs) which has been found to be in conflict with the decision of Supreme Court of Pakistan. Secretary Industries, Shahfqat Naghmi has reportedly given the additional charge of Chief Executive Officer (CEO) Engineering Development Board (EDB) to himself after the services of Qazi Ibad were terminated in light of a decision of Islamabad High Court (IHC). The appointment of Qazi Ibad had been challenged by his predecessor, Aitzaz Niazi in the IHC on the plea that since his extension case was pending with the performance evaluation committee, the appo intment of his successor was malafide. The Ministry of Information and Bro adcasting recentl y floated advertisements in the me dia for appointment of new Chief Executives officers (CEOs) and Managing Directors for Publ ic Se ctor Entities (PSE s) which has been found to be in conflict with the decision of Supreme Court of Pakistan. According to the advertisement, the age for the new CEO has been fixed at 65 years, which insiders claim is an age lim ited d esigned sp ecifi cally to accommodate Qazi Ibad. " Besides being discriminatory in requirements of educational qualifications, experience

Aitzaz Niazi Shahfqat Naghmi

Qazi Ibad

and maximum age limit, the plan of inviting applications without setting up of the Independent Commission as ordered by the Supreme Court of Pakistan may also be an act of contempt o f c ou r t, " sa i d T r an sp a r e nc y International Pakis tan in a recent communication w ith th e federal government. This correspondent sent a message to Qazi Ibad to ascertain whether he has any plans to apply for the slot of CEO again; he sent a detailed reply which is as follows: " I have few top offers both d omestic and fr om abroad . My immediate primary objectives was to give our country solution to tide over urgently the energy crisis and EDB with its strategic partner successfu lly developed the coal fuel within few

Motorbike prices increased Motorbike prices in Pakistan, including those of Japanese and Chinese brands, have increased due to the one percent hike in general sales tax, Sabir Shaikh, former chairman of Association of Pakistan Motorcycle Assemblers, said. Shaikh said there confusion prevailed in the market as a few dealers were charging their invoice at 15 percent or 17 percent. From June 28, the price of Chinese bikes

below the range of Rs50,000 from registe red dealers will increase by Rs500, while for unregistered dealers the price increase will be Rs1,300. Japanese bike prices will rise by Rs1,000 for registered dealers and by Rs2,500 from unregistered dealers. He added that the budget 2013-14 did not clarify issues concerning duties on motorbike parts.....

months of my joining and this was also presented at the workshop at NUST recently. Next we formulated both the automo tive and electronic po licies awaiting fin al isation although the stakeholders during our exhaustive meeting with the automotive sector were all on board barring an odd or so. Attracted new entrants and almost finalised agreement with a foreign strong brand motorbike manufacturer and two others with joint collaboration with two big foreign investors. Two new Chinese car variants will be introduced this year. Within two years the automotive landscape will change with new entrants and competition will reduce cost and improve safety and quality with more options for buyers. Hybrid electric vehicle has been planned for local production and foreign joint partners have committed during meeting. If the country needs my services I will give it priority". Transparency International Pakistan maintains that the recruitment plan in present form in the first instance is a waste of funds due to following reasons: (i) the entire exercise will have to be repeated, once the Independent Commission for a 4 year term is formed by the Federal Government, which will be the only body to approve the terms, nature and period of appointments, remunerations /perks, criteria of selection required for each post, based o n t he r equ ire men ts and recommendations of the relevan t ministries; and (ii) competent and experienced professionals will get confidence that their selections will be on merit, and will apply.

18ww.automark.pk | July-2013 | Page 18

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

New Heavy Bike Launch - Event

Monthly AutoMark Magazine

Suzuki unleashes its latest heavy bikes in a glittering launch event in Lahore Pak Suzuki Motor Co. Ltd., one of the largest assemblers of automobiles in Pakistan, launched their most popular heavy bikes series at a glittering event at the Pearl Continental Hotel, Lahore on the 22nd of June 2013. Suzuki Motor Corporation are a world leader in the production of heavy and racing standard motorbikes and are noted as reigning champion in the F1 Motorcycle GP. The heav y bikes launched at the event included the 250cc Suzuki Inazuma, the 800 cc Suzuki Intruder M and the flagship 1300 cc Suzuki Hayabusa which is one the fastest motorbikes in the world with a top speed of over 202 Mp/h. Suzuki is branding these Heavy Bikes as its Power League. This is the first time in Pakistan that an original equipme nt manufacturer (OEM) is introducing brand new heavy bikes. Customers will be provided with Suzuki’s high product design and quality, wide dealership network and after sales services available in all major cities across Pakistan. Speaking about the event, Hirofumi Nagao, Managing Director, Pak Suzuki Motor Co. Ltd., said, “Suzuki has long been involved in Pakistan and we are proud to be introducing our latest range of sports / heavy bikes for enthusiasts in the country. We are very excited and passionate about promoting sports biking in Pakistan by introducing these beautiful and powerful heavy bikes for our valued customers and sports biking fraternity as a whole. The launch of these three heavy bikes in Pakistan once again reiterates our ever growing bond of trust and reliability. I am confident that

like our other products these heavy bikes will appeal to bik e enthusiasts in Pakistan.” he further added.

The event was attended by celebrities and motorbike enthusiasts from across Pakistan.

www.automark.pk | July-2013 | Page 19

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Exclusive Article by Syed Mansoor Ali

Monthly AutoMark Magazine

Potential of Construction Machinery in Pakistan

Current developmental projects include the construction of 7 or 8 dams, anew airport in Islamabad, Iran-Pakistan gas pipeline, Karakoram highway being upgraded to a double road, Hyderabad-Karachi and Faisalabad – Multan motorway, increasing development of Gwadar, and many other major projects, like the Thar Coal project are underway, all of which demand machinery.

Syed Mansoor Ali

Pakistan is a developing country with anenormous potential to get developed in a short span of time as God has be sto wed this land with excellent manpower, with majority falling in the working age, mountains full of minerals, rivers, tourist sites, agricultural lands, Asia’s lar gest irrigation system, abundant vegetables and fruits, large cash crops, suitable weather, fertile land an d deserts, w orld’s large st coal reserves, china clay, marble, and granite, almost every terrain and weather due to long spread of latitude. All these factors coupled with its geographical location, Pakistan enjoys a key position in south-Asia. These factors hav e granted the country a strategic position in the eyes of world powers that are interested in business and development in Pakistan. On the contrary, the ground reality portrays a darker picture dueto the nation’s inability to tap into these

resources. Besides other deficiencies, the construction machinery sector, which should be given priority on account of tremendous potential of development in each area, is ignored badly. The provision of acquiring new machines is extremely difficult due to absence of financial mechanism and easy solutions for the end-users. There are no retail and proper renting outlets avai lable in th e count ry. Th e government departments are starving due to funding difficulties. As a result, we are unable toexploit these natural bounties by developing tourist sites, cl eanin g canals, riv ers and dams, recl amation of agricultural lan ds, infrastr uct ure such as r ur al t o urban ro ads, linking of big cities, coal mining, marble, ch ina clay and granite excavation, oil and gas, and many others, that require h eavy machinery.

Although in order to meet basicrequirements, this industry is importing around 2000+ second-hand construction machinery and approximately 200 new machines each year, but this volume is insufficient when looking at the jobs needed to be accomplished swiftly. Current developmental projects include the construction of 7 or 8 dams, anew airport in Islamabad, Iran-Pakistan gas pipeline, Karakoram highway being upgraded to a double road, HyderabadKarachi and Faisal abad –Multan motorway, increasing development of Gwadar, and many other major projects, like the Thar Coal project are underway, al l of which demand mach inery. Provincial governments, pr ivate ent repreneur s and const ruc tion companies need machinery such as bulldozers, excavators, wheel loaders,

www.automark.pk | July-2013 | Page 20

continued on next page

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Exclusive Article on construction machinery

Monthly AutoMark Magazine

On the other hand the state of old/used machinery demands government intervention to stop mass in flow of used construction machinery from Afghanistan due to slow down or complete halt of development projects over there (in 2014 NATO is pulling out their armies from Afghanistan) Pakistan is a developing country with anenormous potential to get developed in a short span of time as God has bestowed this land with excellent manpower, with majority falling in the working age, mountains full of minerals, rivers, tourist sites, agricultural lands, Asia’s largest irrigation system, abundant vegetables and fruits, large cash crops, suitable weather, fertile land and deserts, world’s largest coal reserves, china clay, marble, and granite, almost every terrain and weather due to long spread of latitude. All these factors coupled with its geographical location, Pakistan enjoys a key position in south-Asia. These factors hav e granted the country a strategic position in the eyes of world powers that are interested in business and development in Pakistan. On the contrary, the ground reality portrays a darker picture dueto the nation’s inability to tap into these resources. Besides other deficiencies, the construction machinery sector, which should be giv en priority on account of tremendous potential of development in each area, is ignored badly. The provision of acquiring new machines is extremely difficult due to absence of financial mechanism and easy solutions for the end-users. There are no retail and proper renting outlets ava ilable in th e cou nt ry. Th e government departments are starving due to funding difficulties. As a result, we are unable toexploit these natural bounties by developing tourist sites, cleanin g canals, riv ers and dams, reclamation of agricultural lands, infrastr uc tur e suc h as r ur al to urban roads, linking of big cities, coal mining, marble, china clay and granite excavation, oil and gas, and many others, that require h eavy machinery.

to be accomplished swiftly. Current developmental projects include the construction of 7 or 8 dams, anew airport in Islamabad, Iran-Pakistan gas pipeline, Karakoram highway being upgraded to a double road, HyderabadKarachi and Fais alabad –Multan motorway, increasing development of Gwadar, and many other major projects, like the Thar Coal project are underway, all of wh ich demand machinery. Provincial gover nments, p rivate entrepr eneur s and const ruc tion companies need machinery such as bulldozers, excavators, wheel loaders, backhoe loaders, motor graders, and many other machines. The escalating prices of diesel, high maintenance costs, and environmental awareness, are now even compelling buyers of old machines to go for new machines to be more cost effective, productive and efficient. On the other hand the state of old/used machinery deman ds government intervention to stop mass in flow of used c o ns tr u c t i on m a c h i n er y f r om Afghanistan due to slow down or complete halt of development projects over there (in 2014 NATO is pulling out their armies from Afghanistan). These machines were exported around 200520 08 du r ing Gen. M ush ar ra f’s government when business activities in Afghanistan were at their peak. At first place these machines were already “used” when imported by Pakistani importers from different countries. One can imagine the physical state of these machines after an exhaustive/extensive use in different constructions projects in Afghanistan. It is said that during these years average 7000 machines /year were imported by Pak istani companies. Due to high demand in neighbouring Afghanistan 70% of these machines were sold there in hefty prices. The demand could be gauged from the fact that the rent of an excavator or other major construction machinery was three to four times higher than Pakistan. The back flow of these machines will turn Pakistan into a massiv e junk yard and/or the machines fixed to put to work wil l hav e brutal effect on

productivity, op erating cost and environment. Consultations with variou s usedmachinery importers revealed that new machines are required but due to weak purchasing power of buyers, no easy avail ability of bank loan /leasing opportunity, high tax rate and dollarrupee parity are making it next to impossible for small private groups to import new machinery. The benchmark to assess tax to be imposed on used machinery is the weight of the machine and not the invoice value. This creates a major difference in the final price when 24% tax is applied to an invoice value of a new machine compared to 1.5 USD/kg to the weight of the used machinery. The impact on the price could be assessed from the example that a 40 ft. container containing two units of Daewoo 130 used to cost 100,000 rupees before the imposition of tax on old machines, now it cost 1 millio n rupees to clear th e same container. There are three prominent companies like Orient Energy Systems (New Holland Construction Machinery), Allied Engineering and Services Ltd (Caterpillar) and Jaffers Brother Ltd (Komatsu) providing necessary infrastructure to market new machines in Pakistan. However, the market segment for them is mainly limited to government tenders. There is a long list of second hand machinery retailers. Usually these machines are imported from Dubai, Korea, Japan and Canada.

The most popular among them are Japanese and Korean machines. The names and current market prices of popular brands/models of used machinery available for sale are as such: D-155 Komatsu (3.2 million rupees) Roller Dynapac CA251D/CA301 (3.0 million rupees) Nishan Dumper 96/97 V-8 engine (3.5 million rupees) Excavator solar 130 Korea 2003 (3.3 million rupees)

ww.automark.pk | July-2013 | Page 21

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Automotive Sector - Update

Locally assembled cars sales down 24% in 11 months The market leader Pak Suzuki Motor Company (PSMC) saw its sales move in tandem with the industry as Bolan and Cultus sales increased by 44 percent MoM and 32 percent MoM respectively. The sales of locally assembled cars went down by 24 percent to 121,639 units in 11 months of current fiscal year as compared to 159,983 units in the same period last year, according to Pakistan Automotive Manufacturers Association (PAMA)’s data. Analysts attributed this decline mainly to the huge influx of used imported

Complete Built Unit (CBU)’s in first half of 2012-13, termination of Non Euro-II compliant cars (‘Alto’ and ‘Coure’) and absence of taxi scheme. However on a monthly basis, the election month drove the demand of automobiles up by 11 percent Month on Month (MoM) in May 2013 to 13,302 units compared to 12,011 units in last month,

Import of hybrid cars at zero percent to cause huge losses The economy would lose over $6 billion in the next five years if only 25,000 units of hybrid vehicles are imported per annum at zero percent duty, Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) calculations stated on Saturday. PAAPAM Chairman Munir K Bana said instead of allowing concessions on the import of Completely Built Unit (CBU), the government should emphasise on the transfer of hybrid technology for local manufacturing by the existing players and new entrants in the industry that would also generate investment and job opportunities in the co untry. He said the government should encourage local assembly of hybrid vehicles by allowing import of hybrid specific parts like Lithim Battery, etc at zero percent duty, as is a common practice in other countries like Thailand, Malaysia etc. PAAPAM forecast the import of hybrid cars would kill local manufacturing industry and many skilled work force would lose jobs. Such layoff would stand at around 6 percent in coming fiscal year FY 2013-14 and increase to over 12 percent in the next fiscal year 2014-15. Current petroleum import bill stands at $14,368 million. With the import of hybrid cars the fuel import bill is anticipated to reduce only by $24 million making 0.17 percent red uction.

PAAPAM estimated some calculations based on the import of about 25,000 hybrid vehicles every year for next five years, out of which the number of standard vehicles were estimated at 20,000 and luxury vehicles at 5,000. According to the calculations, with the import of these 25,000 hybrid vehicles the increase in the import bill would stand at $423 million per annum that will accumulate to $2.117 billion for five years. The duty loss due to zero percent rate would be annual $551.40 million accumulating to $2.757 billion at the end of five years. The loss of revenue on petroleum products was estimated at $8.25 million that becomes $124 million after five years. Tax revenue losses were estimated at $272.75 million on annual basis that will stand at $1.364 billion after five years. Besides these apparent costs, the impact on fuel consumption between conventional and hybrid cars was estimated at $23.82 million per year that will sum up to $357 million at the end of five years. These all costs if added together result a huge loss of over $6 billion to the economy. This loss is attributed to $1.63 billion from the import of 20,000 standard hybrid cars and $4.37 billion from the import of 5,000 luxury hybrid cars...

said Abdul Azeem of Invest Capital. Although sales picked up in second half FY 2012-13 due to easing pressures of used imported cars and elections related demand, overall sales in 11 months FY 2012-13 remain subdued owing to the huge influx of used imported CBU’s in first half FY 2012-13, termination Alto and Coure and absence of taxi scheme, said Zeeshan Afzal of Topline Securities. Passenger car sales improved by 14 percent to 11,786 units in May 2013 as against 10,384 units in April 2013 while LCVs sales declined by 7 percent to 1,516 units in May 2013 compared to 1,627 units in April 2013. The market leader Pak Suzuki Motor Company (PSMC) saw its sales move in tandem with the industry as Bolan and Cultus sales increased by 44 percent MoM and 32 percent MoM respectively. The Company’s prime product failed to compensate for the lost volumes, as M eh r an sales r emai ned alm ost unchanged, said Zoya Ahmed of BMA Capital Management. In 11 month FY 2012-13, PSMC sales declined by 32 percent to 68,660 units versus 100,805 units in the same period last year. However on monthly basis, PSMC sales remained improved by 11 percent to 6,971 units in May 2013 as compared to 6,261 units last month. Similarly Indus Motor Company (IMC) sales also went down by 31 percent to 33,533 units in 11 months FY 2012-13 as against 48,907 units in the same period last year. Decline in sales is mainly attributed to 31 percent softness in ‘Corolla’ sales to 28,969 units in 11 months of current FY as against 41,720 units in the same period last year and termination of ‘Coure’, said Afzal. Further on monthly basis, IMC sales have declined by 4 percent to 3,768 units in May 2013 versus 3,936 units in April 2013. Although ‘Corolla’ sales increased by 2 percent MoM to 3,339 units.

ww.automark.pk | July-2013 | Page 22

Generated by Foxit PDF Creator ÂŠ Foxit Software http://www.foxitsoftware.com For evaluation only.

Exclusive Article by Azam Sultan Ahmed

Monthly AutoMark Magazine

GENERAL INSURANCE A BOON OR A BANE FOR PAKISTAN In this day and age general insurance is not a luxury but a necessity in Pakistan, the government should reduce the heavy taxation imposed on this sector which is barely managing to break even.

27th December 2007 was

a day hardly any Pakistani can forget, but the Insurance Industry will never forget that day because of the huge losses it had to bear. Unrest in Karachi and other parts of the country in reaction to the assassination of Benazir Bhutto had led to a massive increase in payment of claims by the insurance companies. Over 700 motor vehicles were torched alone in Karachi while over 300 bank branches were set ablaze across the country. The claim ratio in property reached 117 per cent, showing that violence resulted in more damages to properties. Factories, commercial properties and banks were targeted in violence in Sindh, b ut ur ban areas, l ike Kara ch i, Hyderabad and Sukkur, were special targets. Hundreds of vehicles burnt on highways were not insured. The claim ratio in motor insurance increased by 79 per cent, reflecting the

scale of damage to vehicles during violence. Such was the tenacity of this huge loss that the leading insurance companies with profitable balance sheets went to a declining position and had to declare underwriting losses. This was due to the fact that this was indeed the heaviest cumulative loss in the 60 year history of Pak istan. The insurance companies collectively paid Rs. 13.265 billion as net claims. General insurance business has grown substantially high during a decade mainly on account of deteriorating law and order situation in the country. However, the non-life in su rance penetration as a percentage of gross domestic pro duct is only 0.7% in Pakistan. In contrast, it is 1.2% in Bangladesh, 2.5% in Malaysia and about 4.5% in India, according to Ahmed.

If we look at motor insurance we find cases of car theft has been rising for last five years and there w as no ap par ent decline in this trend, which absorbs huge Azam Sultan am o un t o f t he insurance sector. The theft of vehicle has also resulted into very high premium rate for new vehicles, which has more than doubled in last five years with stringent conditions by the insurers of tracker and anti jamming devices. General insurance is a fundamental in these violitile and turbulent times, a penny saved today is useful tommorow. The same way money allocated for general insurance can save you from large losses in the future, not that it can prevent a loss but it can provide monetary compensation in case a loss occurs. Floods and earthquakes have occurred in Pak istan in the last few years, according to IAP Chairman Mr. Tahir Ahmed, who also serves as Managing director and CEO of Jubilee General Insurance, insurance companies paid next to nothing in cl aims after an earthquake devastated large swathes of

www.automark.pk | July-2013 | Page 24

continued on next page

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Energy Sector - Update

USAID to help Pakistan to mitigate energy crisis The USAID Power Distribution Program under the project "Together we will create a roshan Pakistan" will provide assistance to the government of Pakistan in its efforts to reform the power sector to mitigate the current energy crisis. The program will help DISCOs improve their performance through a reduction in losses, increased revenues, and enhanced customer services. In this regard, stakeholders workshop for the development of National Electric Safety Code (NESC) was held here today in c ollab ora tion w ith Paki stan Engineering Council an d USAID. The workshop was attended by experts from both the private and public sector including prominent safety experts from across the country. Pakistan in 2005. “There w as no insurance penetration in the areas that were hit by the 2005 earthquake. So, while the government had to seek money from all available international and domestic sources, we received few insu rance c la ims,” A hmed said . There has been “no tangible growth” in Pakistan’s non-life insurance sector due to a lack of awareness and sluggish economic growth. Insurance companies are now coming up with aggressive sales strategies to raise the aw areness levels of th e customer in this connection Ban k Assurance has been designed to reach out to all bank account holders in the country and insure their lives, vehicles, homes & properties etc.

Presently there are three types of customers 1) Those who buy out of necessity 2) Those who are reluctant to buy insurance such as householders, shopkeepers and departmental store owners but when they are approached and convinced positively they are ready to buy in large numbers. This in turn also enhances the quality of their lives and sustainability of their business. 3) Then there are those who never think of insurance or who simply can’t afford it. For instance people

While addressing, the chief guest Senior Advisor Engineering for USAID Power Distribution Program Dick Dumford praised the initiat ive of NES C. "NESC will go a long way in reducing the number of casualties as well as serious injuries that in the past could not be avoided due to an absence of a comprehensive safety code," he said. Dumford further added that 2012 alone witnessed over 200 casualties while an equ ally hig h nu mber of serious disabilities w er e also recor ded. "Such a high accident rate suggests that not only linemen and technical field staff are at very high risk, but infrastructure and the public at large are also indirectly at risk," Rob ert Kolling, Senior Distribution Adviser of the USAID

living just above or below the poverty line. Furthermore, rural sector by and large is not serviced by the insurance industry.

Motor Insurance is another critical sector which has been badly affected, from Jan to June 2013 about 10,500 vehicles have been snatched or stolen, yet more than half of the vehicles on the road are not insured not even the mandatory third party insurance, this results in serious problems in case of a claim when diyat (blood money) can not be paid as the Insurance company is not bonafide, rather a briefcase company for the record, It is the duty of the Government and SECP to ban such spu r iou s com pa nies wh i ch ar e putting the whole insurance industry in disrepute and pass a law to make third partly liability insurance mandatory for all vehicles.

Power Distribution Program said on the occasion. "In order to curtail the losses of infrastructure and human lives including employees and general pu blic, a National Electric Safety Code (NESC) is to be developed, which would be a p p l i c a b l e t o p ow e r s e c t o r , communication companies, operation & maintenance companies, and their relevant contractors and manufacturers. He showed optimism that the safety The five-year USAID Power Distribution Program was announced by Secretary of State Hillary Clinton in 2009 as one of the US efforts to support Pakistan's energy system.

In this day and age general insurance is not a luxury but a necessity in Pakistan, the government should reduce the heavy taxation imposed on this sector which is barely managing to break even. Central Excise duty was 5% now it was raised twice to 15%, Federal Insurance Fee, Capital gains tax and Stamp duty should be waived until the time this sector progress. General Insur ance p rodu cts for individuals such as home Insurance, personal accident insurance, motor vehicle insurance and shop owners insu rance ar e a vailable at very reasonable premiums, it is in the best interest of our population to follow suit to the developed nations and cover themselves against these risks so they secure their future against large financial losses. concluded...... About writer: Mr. Azam Sultan Ahmed working at Jubilee General Insurance Co. Ltd. as Vice President Special Projects, contact him: email:azam.sultan@jubileegeneral.com.pk

www.automark.pk | July-2013 | Page 25

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Automotive Sector - Update

Pakistan embraces a greener way of moving around The new government hasn’t favored the importers only as per the new budget; local auto assemblers will now be able to import CKD (Complete Knockdown Kits) on 25% duty instead of 35%. CKD (complete-knockdown-kit) is basically all the car parts which are manufactured in one country, and then shipped to another to be assembled into the final product. Duty and tax exemption on Hybrid cars h ave caused quite a stir in the automotive sector but there’s even more, VVIPs wil l now not enjoy the royal treatment of importing duty free cars and everyone would be a passenger of the same boat steered by the new Prime Minis ter Nawaz Sharif. Pakistan government has announced that HEVs (Hybrid Electric Vehicles) up to 1200cc will be completely exempted from duty, HEVs from 1201 to 1800cc will have 50% exemption, HEVs from 1801 to 2500cc will have 25% exemption and anything above 2500cc will have to bear all relevant duties and taxes. Hybrids or electric cars have been around for quite a while however, they are still in their infant age as the world is not prepared to accept hybrid/electric vehicles over normal, combustion engine vehicles. The infrastructure is not there and according to one research which was shared on Top Gear that to manufacture a Toyota Prius, which is the current th rone-h old er in h ybrid s, is so complicated that in the long-term, a Prius would do more damage to the environment then a Lan d Rover Discovery. So buying one for the sake of saving the planet is completely pointless but hybrids are nonetheless quite economical and that’s a very good reason to buy one because, we may never run out of oil but extracting oil is indeed getting more expensive and it will continue to be more expensive. The duty relaxation on hybrid vehicles have been done for only one reason; to ease the pressure on our fast depreciating gas reserves so that they can be provided to our industry and electricity generation sector. However, they may have different impact on our auto industry. Breaking th e monop oly of the local auto assemblers may right now not be one of them but they will have to expand their portfolios and decrease prices to remain

competitive as the pressure from imported hybrid cars rise. The new g overnment ha sn’t favor ed th e importers only as per the new budget; local auto assemblers will now be able to import CKD (Complete Knockdown Kits) on 25% duty instead of 35%. CKD (complete-knockdown-kit) is basically all the car parts which are manufactured in one country, and then shipped to another to be assembled into the final product. Pakistani automakers are auto assemblers and they import CKDs’ of cars and assemble them here. Hybrid vehicles operate on a combination of petrol engine and electric motors. Toyota Prius has a system where electric motor only comes into play when you’re going on low speeds, in bumper-to-bumper traffic for example, and as you speed up, the petrol engine comes into play. Another system is that electric motors power the wheels and as the battery runs out of juice, the onboard petrol engine swings into action to generate electricity to power the batteries. Apart from the importing sector, the most an automaker can capitalize on this policy is Honda as it is the only one that offers that best

Hybrid cars on the market today; Honda Jazz Hybrid with a 1200cc engine and Honda CR-Z Hybrid with a 1500cc petrol engine. The best, and the most boring and not so good looking option in the 1800cc area is the Toyota Prius which previously had a 1500cc engine but was revised to 1800cc in 2009-2010 but Yaris (Vitz) Hybrid is one better option from Toyota. Although the effect of this new policy remains to be seen on the part of local auto assemblers as Suzuki is almost empty handed on Hybrid s w hile Honda Atlas has remained quiet on this matter even though the high price of Civic has cost them a lot of customers, yet they remain anonymous on this whole development. Indus Motors was however working for a while on introducing Prius in Pakistan and they had announced they would introduce it later this year. Government denied any attention to local auto industry’s calls to reduce import age of cars or not remove duty on hybrids w hich is certainly weakens their monopoly however, we also believe that t he new gover nment shou ld ’ve introduced special schemes.

www.automark.pk | July-2013 | Page 26

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

An Exclusive review by Asif Masood

Monthly AutoMark Magazine

A Step Toward A Better Choice Pak Oasis Launched Solar Panels Production in Pakistan We are light to those people who, under the given circumstances, would be unable to get grid stations even during the next 20 years. We have a plan to improve our system and also provide solar fans and charging systems to deprived villagers of Pakistan.

ne of the prime objectives of the Government has been to achieve self sufficiency in all its energy requirements so as to cease dependence on imports of crude oil and save valuable foreign exchange. This objective can only be achieved by exploring the potential resources including the substantial untapped renewable energy resources. The evidence is quite clear around the world that renewable energy , as a resource, the cheapest and fastest means

of imp roving a nat ion’s ener gy su pp ly/ dem and si tu ation. It is immeasurably preferred, too, for pr otecting the envir onment and preserving national resources and even accelerates production and income by c ontr i bu ti ng t o effi ci ency and competitiveness. Renewable energy in Pakistan is a relatively under-developed sector; however, in recent years, there has been some interest by private groups and from the aut horities to explore renewable energy resources for energy production, in light of the energy crisis and power shortages affecting the country. Most of the renewable energy in Pakistan comes from hydroelectricity. In Pakistan, electricity crisis is severe and destabilizing the economy of the country and there is an acute need to cut down on electricity generation costs. Due to this energy crisis, the country has suffered huge losses, mak ing hundreds and thousands of people jobless.

P a k O a si s In d us t r i es (Private) Limited has taken a

strong initiative to s i g n a “Memorandum of Understanding” for Joint Venture betw een Pakistan Council of Renewable Energy Asif Masood Technolog ies (PCRET) a subordinate organization working under Ministry of Science & Technology, Government of Pakistan to p rod uce energy w ith respect to utilization and sustainable development of indigenous PV System (High Quality Solar Panels) and other components along with commercial Biogas plants for cost effective and alternate solutions to overcome energy requirements of the nation in general and agriculture in particular by increasing the share of Renewable Energy Technologies. Our experts will evolve a practicable project for the country, which is cheap and beneficial to all in general and particularly the farmers. The project's has three main objectives

• Women empowerment in the urban & rural areas of Pakistan by giving them an opportunity to use the solar charging station as a means to generate income. • Sustainable energy alternate to illuminate households and help them escape long hours of power shutdowns by proving them solar home system. • International relationships through creating global linkages and joining hands with international firms to help strengthen the clean energy

www.automark.pk | July-2013 | Page 31

continued on next page

An Exclusive review by Asif Masood

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

India, Pakistan LNG supply deal almost done

India and Pakistan are close to signing the first-ever bilateral agreement to supply LNG via a 120-kilometre pipeline from Jalandhar to Jallo near Lahore via Wagah bo rder, Hindustan Times reported. The newspaper said that the period of agreement was expected to be five years where India would supply 5 million cubic metres of gas daily to Pakistan. The pipeline project is expected to take about 18 months during which GAIL will lay a 110-km pipeline from Jalandhar to Wagah via Amritsar and Pakistani Inter-State Gas Services Company will lay a 10-km pipeline from Wagah to Jallo, in the outskirts of Lahore. External affairs ministry sources told the newspaper that the agreement would be finalised between the two

movement in Pakistan. Both the groups announced, they would work together to introduce affordable solar systems in Pakistan market. Mr Irshad Hussain Chief Operating Officer & Brig ® Masood Ahmed Khan, Director Operation Pak Oasis Industries (Pvt) Limited said that “Together with , Pakistan Council of Renewable Energy Technologies (PCRET) we will make exc ell ent p r ogr ess , id ent ifyi ng opportunities to utilize the strength of both companies to create a new brand of solar systems for local market of Pakistan. “We are light to those people who, under the given circumstances, would be unable to get grid stations even during the next 20 years. We have a plan to improve our system and also provide solar fans and charging systems to deprived villagers of Pakistan.” This is a unique and exciting initiative and together we are pushing hard to bring these system into market as soon as possible”. DG PCRET Mr Khalid Islam

companies after negotiations on gas price and security of payments are concluded. While India wants to supply gas at a price linked with crude prices plus a fixed component that includes transportation tariff, state tax, VAT and services tax, Pakistan wants the tax component to be deducted as gas supply is a deemed export. The Indian Petroleum Ministry has now approached the Finance Ministry to seek tax exemption for gas supply to Pakistan. The gas supply is expected to start two years from the day the agreement is inked. GAIL wants an international bank or sovereign guarantee from Pakistan to ensure security of its payments with a three-month advance and easy closure of contract incorporated in the terms of a greement. “G iven t he delic ate relationship between the two countries, GAIL wants the immediate closure built into the gas supply contract. We expect the contract to go through as Punjab Chief Minister Shahbaz Sharif is pushing for gas supply with his brother Pakistan Prime Minister Nawaz Sharif,” a senior official told the newspaper.

said that, “Our new joint venture is well positioned to meet the challenges of power crisis. We are fortunate to have excellent joint venture partners and the establishment of this manufacturing facility adds another dimension to our growing presence in this important market. Pak Oasis Industries (Pvt) Limited will invest Rs 200Million for agreed sectors in order to boost the production and sales of quality PV solar system biogas plants as registered capital for the Joint venture. Cost effective renewable energy will definitely improve Pakistan’s economic performance. Energy efficiency along with conservation measures can result in profitable business units. Thus, exploitation of these sources of energy can lead to poverty alleviation. Use of indigenous renewable resources can help Pakistan in diversifying its energy mix. This wil l reduce the country’s depe ndence on any single source , particularly imported fossil fuel.

Monthly AutoMark Magazine

Chinese company launches wind energy project in Pakistan

A Chinese company is setting up a 50megawatt wind energy project in Pakistan's Sind h pr ovince at an estimated cost of $120 million, while having plans to launch nine such projects in future. Hydro-China International Engineering Company Limited has vowed to set up a 50-megawatt wind energy project in the province's Gharo area, reported the Onlin e news agency citin g Wan g Youngqiang, th e comp any's vice president. The project would be a symbol of ChinaPakistan friendship and it would start functioning by June 2015, said Wang, adding that the company had plans to initiate nine more such projects of same frequency in Pakistan. Pak Oasis Industries (Private) Limited was established in 2004, with an aim to provide an access to the people to safe drinking water. Pak Oasis offer a very eco nomical technology in Reverse Osmosis (RO) / Ultra Filtration (UF) water desalination solution for the municipal, agricultural, community and industrial secto rs . Pak Oasis is a comp reh ensive enter prise wh ich combines research & development, the only company which is a corporate member of the International Water Association from Pakistan along with being ISO certified and accredited by the Pakistan Engineerin g Council . Pak Oasis Industries (Private) Limited is a prosperous company with a team of m o d e r n i za t i on a l m a n a g e m en t capability, brilliant skill and excellent market exploration. The enterprise cultu re is alw ay s pragmatic and innovative, which bring together with al l p a r tn er s to seek co mm on development......

www.automark.pk | July-2013 | Page 32

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Exclusive Article M. Yousuf Shaikh

Monthly AutoMark Magazine

Prime Minister Nawaz Sharif maiden visit to “China” Consolidating

Pak-China friendship and

PAKISTAN CHINA MOTORCYCLE INDUSTRY CONCIL

by Muhammad Yousuf Shaikh

boost economic co-op

A detail evaluation of the maiden visit of Prime Minister Nawaz Sharif to China, Chinese Motorcycle Industry also grab the great investment opportunities in Pakistan as the present government of Pakistan is pro-business and proinvestment friendly regime which would welcome the Chinese investment as the Prime Minister signed many agreements with Chinese companies, including building road and rail links from Gwadar to Khashgar as well as a Karachi-Lahore motorway During his 5 day visit. Chinese companies have also been invited to participate in the building of mass transit lines in Karachi, a high-speed rail link between Karachi and Peshawar, and in a number of coal and solar energy projects Muhammad Yousuf Shaikh The Founder & Chairman of Pakistan China Motorcycle Industry Council, offers his analysis of the motorcycle trade & industry trends from Pakistan & China. As the chairman PCMIC working with motorcycle trade & industry for over two decades, Yousuf believes that new projects with foreign investment particularly Chinese investment could help Pakistan to design and produce its own automobiles mainly motorcycles & its engines, as Pakistan have strong brotherly & bilateral trade relation with Chinese. pakchina.mic@gmail.com

The Prime Minister of Pakistan Muhammad Nawaz Sharif was accorded warmed welcome as he landed at the Beijing International Airport on his official five-day visit to China from July 3 to July 8, 2013 at the invitation of Premier Li Keqiang. The Chinese ViceForeign Minister Zhai Jun welcomed the Prime Minister and his entourage. Pakistan’s Ambassador to China Masood Khalid and senior diplomats of Pakistan Embassy and officials from Chinese government were also present on the occasion Prime Minister was accompanied by First Lady Begum Kulsoom Nawaz, Federal Minister for Pl anning and Development Ahsan Iqbal, Advisor to Prime Minister on foreign affairs Tariq Fatimi and Chief minister Balochistan Abdul Malik.

This was Prime Minister Nawaz Sharif’s first overseas trip since taking oath of office and follows Chinese Premier’s visit to Pakistan in May 2013. . The timing and the arrangements once again testify to the high level of mutual trust and special friendship between the two neighbors. Prime Minister Nawaz Sharif told his Chinese counterpart Li Keqiang their cou ntries' relationship was

www.automark.pk | July-2013 | Page 33

continued on next page

Generated by Foxit PDF Creator ÂŠ Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Article on PM Visit to China

"sweeter than honey", during a visit to Beijing with economic ties at the top of the agenda. These successive visits, in a short period of time, reflect the positive desire of both countries to further reinforce the existing brotherly and time-tested Ch ina-Pakist an relationship. During the visit, Prime Minister Nawaz Sharif met with President Xi Jinping, held talks with Premier Li Keqiang, and met with Mr. Zhang Dejiang, Chairman of the Standing Committee of the National People's Congress of China. Prime Minister Nawaz Sharif also met with corporate leaders and leading membe rs of business co mmunity . PM Muhammad Nawaz Sharif and his entourage traveled from Beijing to Shanghai through high speed train and expressed willingness to introduce the same facility for the people of Pakistan. During the travel, the prime minister held four meetin gs w ith various delegates and discussed different development and power projects. Project Chief Engineer and General Manager High Speed Train Management Zhao Guotang gave detailed briefing to the Prime Minister on high speed train project. Prime Minister expressed desire to execute such projects in different citi es of Pakistan to fu lfi ll h is commitment of providing affordable and comfortable transport facility to his people.

Prime Minister Muhammad Nawaz Sharif ordered the completion of Lahore-Karachi Motorway within two and half years after finalizing the feasibility study of the project in three months. Talking to media here after an MoU signing ceremony between Pakistan and China for cooperation to construct Lahore-Karachi Motorway.

He also made a well publicised visit to a Metro station in Beijing along with his delegation where he announced plans to construct subway rail systems for top cities like Lahore and Karachi. The Chief Ministers of Punjab and Balochistan, Minister for Planning and Development Ahsan Iqbal, Advisor to Prime Minister of Foreign Affairs Tariq Fatemi, Ambassador Masood Khalid and Chinese Ambassador in Pakistan Sun Wei Dong and prominent Pakistani businessmen were also present during these meetings.

The Pakistani PM reaffirmed the strong commitment of his government to further promote and deepen the bilateral strategic cooperation between China and Pakistan.

The Chinese leaders appreciated that PM Nawaz Sharif had chosen China as his first destination for his visit abroad. In 2012, the bilateral trade volume was more than $12 billion for the first time, up 17.6 percent year-on-year, while the accumulated Chinese investment in Pakistan totaled $2.1 billion last year. The two sides have launched or confirmed more than 450 projects r el a t ed t o ag r i c u l t u r e, w a t er conservancy, electric power, machinery, chemicals, textiles, pharmaceuticals, aerospace, biotechnology, computers, the environment, energy, oce an s, earthquakes, mapping, the peaceful use of atomic energy, information and other fields. Although China and Pakistan have been engaging in close cooperation in political, economic, diplomatic, military, technological and cultural fields, there is still great potential that can be tapped in the future. Compared with the size of both economies, especial ly their political, diplomatic and military ties, the $12-billion bilateral trade volume seems quite weak. The scale of bilateral investment is also fairly low considering the two sides' economic stre ngth. Moreover, people-to-people exchanges between the two countries also lag far behind. Pakistan will continue to adhere to its one-China policy, oppose Taiwan and Tibetâ&#x20AC;&#x2122; s independence and support

www.automark.pk | July-2013 | Page 34

continued on next page

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Article on PM Visit to China

The two sides recognize that holding identical views on many international and regional issues of mutual interest, they would enhance close communication, while extending mutual support and collaboration in various multilateral fora including the United Nations, the Asia-Europe Meeting, the ASEAN Regional Forum, the Shanghai Cooperation Organization and the Istanbul Process. China’s efforts in combating the “Three Evils” of extremism, terrorism and separatism. We regard ETIM as our common threat and stand united in combating this menace. The Pakistan and China believe that maintaining the tradition of frequent exchange of visits and meetings between their leadership, and fully leveraging arrangements such as annual meetings between their leaders, is of great importance in advan cing bilateral relations. They also agreed to enhance the role of mechanisms such as Foreign Ministers’ Dialogue, Strategic Dialogue and other consultative mechanisms between the relevant ministries and departments, so as to strengthen the s t r a te g i c c o m m u n i c at i o n a nd coordination between the two countries. Pakistan and China reaffirmed that expanding bilateral economic relations was a matter of high priority. The two sides agreed that China is committed to realizing the Chinese dream of national reju venation by accelerating the transformation of th e pattern of economic development and earnestly pursuing the strategy to develop its western region. Meanwhile, Pakistan is committed to reviving the national economy and realizing its "Asian Tiger dream". The development strategies of the two countries therefore coincide with each other. Both sides decided to further strengthen th e ties of pragmatic cooperation between them, with a view to translating their high-level political relationship in to wider economic dividends. To this end, the two sides will strengthen cooperation in tr ade, investment, energy, agriculture, mining, food security, environment, finance and other fields. The two sides agreed to fully implement the Additional Agreement to Extend the Five Year Development Programme on China – Pakistan Trade and Economic Cooperation and the China-Pakistan Free Trade Agreement; fast track work on the projects identified under the Five Year Development Program; hold the sec ond p h ase of t ax -r ed u cti on

negotiations of China-Pakistan Free Trade Agreement on speedy basis; further liberalize trade, and advance economic integration between them. Enhancing connectivity between China and Pakistan is of great importance to exp and ing econom ic a nd tr ad e cooperatio n, promotin g economic integration, and fostering economic development of the two countries. To develop the Long-term Plan for China-Pakistan Economic Corridor, both sides agreed to set up the Joint Cooperation Committee on the LongTerm Plan for China-Pakistan Economic C o r r i d or , w i t h t h e N a t i o n a l Development and Reform Commission of China and the Planning and Development Ministry of Pakistan as leading ministries, and secretariats estab lish ed in b ot h m inistr ies. Ministerial officials of both countries held talks in Beijing recentl y. The Chinese side will dispatch a working group at an early date to Pakistan for further consultations.

Both sides agreed to start work on the Long-term Plan for China-Pakistan Economic Corridor on speedy basis. The plan will mainly include such areas of cooperation as connectivity construction, economic and technical cooperation, people-topeople and cultural exchanges, and exchanges

between local governments and organizations. Both sides agreed that they will focus on the following areas of cooperation in the near future under the framework of the Long-Term Plan for China-Pakistan Economic Corridor: start the ChinaPakistan Cross-border Fiber Optic Cable project at an appropriate time, upgrade and realign the Karakoram Highway on fast-track basis, explore cooperation on solar energy and bio mass energy, explore construction of industrial parks along the Pakistan-China Economic Corridor, launch at an early date interg over nm enta l cons ul ta ti ons t o impleme nt the Digital Televis io n Terrestrial Multimedia Broadcasting (DTMB) in Pakistan, coordinate the commercial operation of TD-LTE in Pakistan, and enhance cooperation in the wireless broadband area. Both sides will support enterprises of the two countries in conducting cooperation on establishment of industrial zones in Gwadar.

The Chinese side agreed to support the efforts of the Government of Pakistan in addressing its urgent energy needs. The two sides agreed to hold the third meeting of the China–Pakistan Joint Energy Working Group at an early date and deepen cooperation in conventional energy, renewable energy and other sources of energy. China stressed that it will continue to enc ou rage and sup port Ch inese enterprises’ investment in Pakistan. The two sides agreed to speed up work on the China-Pakistan Agriculture Demonstration Zones. P r im e Mi ni st er Na w a z Sh ar i f acknowledged that a great number of Chinese personnel working on various economic projects in Pakistan were contributing to Pakistan’s economic development and were an asset both to Pakistan as well as the region. The Chinese side expressed its appreciation

www.automark.pk | July-2013 | Page 35

continued on next page

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Article on PM Visit to China

Meanwhile, Pakistan is committed to reviving the national economy and realizing its "Asian Tiger dream". The development strategies of the two countries therefore coincide with each other. Both sides decided to further strengthen the ties of pragmatic cooperation between them, with a view to translating their high-level political relationship into wider economic dividends. for the Pakistan i side's efforts to saf eguard the security of Chinese personnel and institutions in Pakistan, an d create good environment for deepening pragmatic cooperation between the two countries. The Pakistan and China decided to jointly carry out economic and technical cooperation in agriculture, health, education and public transport and other projects that benefit the people, to deepen cooperation between their financial regulators and institutions, and support their financial institutions in setting-up representative offices, branches or subsidiaries, and carrying out business activities subject to relevant laws and regulations, to continue the implementation of the currency- swap agreement, to enhan ce exchan ges between young entrepreneurs, which will strengthen communication on trade and investment cooperation and To promote cultural and social ties, the two sid es agreed to encou rage their cities/provinces to establish twinning relationships. The two sides believe that enlarging and deepening maritime cooperation between the two countries was of great importance. The two sides agreed to enhance bilateral cooperation in the fields of maritime security, search and rescue and disaster relie f at sea, combating piracy, maritime scientific research, environmental protection, and blue economy. Both sides renewed their com mit ment to imp lem ent t h e Agreement on Maritime Cooperation signed between the two countries during Premier Li Keqiang’s visit to Pakistan in May 2013. Both sides reiterated the desire to implement the 2012-2020 Space Cooperation Outline between China National Space Administration and Pakistan Space and Upper Atmosphere Research Commissio n to further enhance bilate ral exch an ges an d cooperation in this field. The two sides will take necessary measures to actively explore expanding air routes for p a s se n g e r t r a v el a n d c a r g o

transportation, and increase the number of flights. Pakistan and China believe that infusing the nar rative of Pakistan-China traditional friend sh ip to coming generations would remain a priority. In this regard, both sides acknowledged the important role of parliamentary institutions and agreed on the need to further strengthen parliamentary exchanges. They will maintain the exchange of youth delegations, and strengthen cooperation in the training of young cadres. Both sides decided to celebrate 2015 as China-Pakistan Year of Friendly Exchanges in a befitting manner. Recognizing the eternal and abiding significance of commonly held values, flowing from the rich cultural heritage of Pakistan and China, more Confucius Institutes will be established in Pakistan. Both sides will promote exchanges of scholars, academics and reinforce linkages in mass media. The two sides believe that the exchanges and collaboration between the defense forces of China and Pakistan was an important pil lar of th eir frie ndly relations. They highly commended the China-Pakistan Defense and Security Consultations Mechanism, and will maintain the momentum of high-level visits between the armed forces of the two countries, deepen cooperation in counter-terrorism personnel training, joi nt tr ai ning , eq u ip men t a nd technology, and exchanges between military academies, and identify new areas for exchanges and cooperation. The two sides agreed to further enhance cooperation in defense technology and production.

China and Pakistan reaffirmed their commitment to promoting multilateral arms control, disarmament and nonproliferation measures. Both believe that global disarmament measures

should not be discriminatory. They support universal and nondiscriminatory prohibition and destruction of all nuclear weapons and reiterated their opposition to the weaponization of and an arms race in outer space. The two sides support multilateral co operatio n mechanisms in Asia, an d tak e a positiv e view of each oth er’s participation in regional an d su b -r e g i ona l c o op e r at i o n processes. The Pakistan and china stressed that they will enhance communication and cooperation on important global issues such as climate change, food and energy security and UN reform. China and Pakistan are committed to strengthening the solidarity and cooperation between developing countries and safeguarding their common interests. The two sides believe that the evolving situation in Afghanistan has great implications for the regional security and stability. They emphasized that inclusive political reconciliation is a key step towards unity, peace and stability in Afghanistan. The two sides reaffirmed their support for the “Afghan-owned an d Af g h an - le d” p e ace an d reconciliation process, and will work with the regional countries and the in ternational community to help Afghanistan achieve peace, stability and security. The year 2013 marked th e 62n d anniversary of the establishment of China-Pakistan diplomatic relations. The older generations of leaders of the two countries laid the foundations for healthy China-Pakistan relations, which have now developed into an all-weather, comprehensive strategic partnership. Prime Minister Nawaz Sharif first official visit to china and Premier Li's official visit to Pakistan will help the two countries strengthen their friendship under their new leaders....

www.automark.pk | July-2013 | Page 36

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Automotive Sector - Update

Monthly AutoMark Magazine

CBI Workshop on Process Control Starts in Lahore Lahore 25th June, 2013: CBI Workshop on Process Control was inaugurated by Mr. Robert Dresen, Comm ercial Secretary, Embassy of The Netherlands, Islamabad, at the Training Centre of Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) at Lahore. CBI is the Dutch Centre for Promotion of Imports from Developing Countries and sup p ort s th e engi neeri ng, horticulture, surgical and agriculture sectors of Pakistan. Bu siness S upp ort Organizations including Trade Development Authority of Pakis tan (TDAP), Engineering Development Board (EDB), Small & Medium Enterprises Development

CBI Export Coaching Program held in Karachi organized by PAAPAM A u th or i ty (S ME DA ) , Na t i ona l Productiv ity Organ iz ation (NPO), Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) an d Pak is tan Foundry Association (PFA) are attending this workshop. This Workshop is part of the CBI’s program for development of Pakistan’s Engineering sector BSOs. CBI Ex per ts Wou t er Pu t, S taf Henderieckx, Zaheeruddin Dar and Imtiaz Rastgar are delivering the training at this workshop which is being attending by key persons from the BSOs. PAAPAM is the host of the workshop and aims to build its capacity to serve its members in training and handholding of its members for becoming successful exporters of auto parts.

CBI Expert Mr. Imtiaz Rastgar, Mr. Staf Henderieckx and Mr. Mashood Ali Khan Convener Media Cell including PAAPAM managing committee members Mr. M.Sherani, Mr. Arshad.A, Mr. Aslam Riaz, Mr. Ahmer and other entrepreneurs.

www.automark.pk | July-2013 | Page 37

Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Budget 2013-14

An inflationary budget without any relief

Syed Nabeel Hashmi, chairman All Pakistan Business Forum, said that direct tax on agriculture income has been once again ignored which is not right, as all sectors of society need to be in the tax net without any exclusions. He said that power projects have been announced but no direction as to the power policy or pricing has been revealed. Further controls for theft and power losses remain the same T he representatives of bu siness community have termed the federal budget 2013-14 an inflationary budget, as no relief was announced for public or industry. On the other hand, zerorated facility has been withdrawn, besides increasing sales tax which will not only enhance inflation but also raise cost of doing business in the country. Pakistan Tanners Association central chairman Agha Saiddain said that increase in sales tax will encourage under-invoicing, lead to drop in custom duty. He said that country is already facing fiscal deficit but the government instead of giving any roadmap to enhance exports to bridge the deficit has withdrawn incentives. Syed Nabeel Hashmi, chairman All Pakistan Business Forum, said that direct tax on agriculture income has been once again ignored which is not right, as all sectors of society need to be in the tax net without any exclusions. He said that power projects have been announced but no direction as to the power policy or pricing has been revealed. Further controls for theft and power losses remain the same. No roadmap has been announced to provide relief in electricity loadshedding, which is a serious cause of concern for all. APBF al so hopes that no new mini budge ts will be announced in the foreseeable future, he added. Pakistan Poultry Association’s former chairman and spokesperson Abdul Basit also termed the budget as inflationary, saying the poultry farmers cost will increase at least by Rs5-10 per kg as duty relaxation has been withdrawn besides raising sales tax. He said that cut in circular debts in

record 60 days, completion of Nandipur Power project, allocation of sufficient funds for energy sector would definitely h elp in solving the energy crisis. Basit said that austerity measures like bringing down Prime Minister office expenditure by 45 per cent, abolition of discretion funds of federal ministers and b a n o n p u r c h ase v eh ic le s fo r government functionaries and ban on duty free import luxury vehicles for VVIPs would help increase government revenues. The Pakistan Association of Automotive Parts Accessories & Manufacturers vice chairman Usman Malik, opposing the new government’s allowing of duty-free import of hybrid cars on excuse of saving fuel bill, has warned the authorities of embarking on repeating mistakes, as the scheme would only benefit a few and have a shocking impact on domestic auto industry as well as the national exchequer. “The govt should have rather

www.automark.pk | July-2013 | Page 38

Generated by Foxit PDF Creator ÂŠ Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Budget 2013-14 - continued encouraged local manufacturing of hybrid vehicles which will result in technology transfers, skills development and real savings in foreign exchange and oil import bill,â&#x20AC;? he said. Usm an ad d ed t h at i ncr ea se of registration tax on local vehicles will increase price of cars thus reducing production. Oversea s Investors Ch amb er of Commerce and Industry said it appears that the opportunity of tax reform has not been availed by the new team and instead the government has resorted to old tactics of taxing the already taxed at higher rates. Increase in sales tax and turnover tax will impact all our (OICCI) members negatively and we (OICCI) find this discouraging for future investments. APAT general secretary Naeem Mir said that the finance minister Ishaq Dar has not fulfilled his commitment of imposing wealth tax, rather he relaxed duties on hybrid cars to benefit the wealthy people. He rejected increase in turnover tax and levies on retailers. The Lahore Chamber of Commerce and Industry (LCCI) termed the Federal Budget 2013-14 a well thought-out economic revival plan. Addressing postbudget press conference, LCCI President Farooq Iftikhar said decis ion to eliminate whopping Rs 500 billion circular debt in just 60 day s, an allocation of Rs 225 billion for energy projects and compl etion of 425MW Nandipur Power Project in 18 months w o u l d no t o nl y h el p en su r e uninterrupted supply of electricity but would also give boost to economic activities in the country. T h e LC CI p r esi den t sa id th at transparent privatization of loss-making Public Sector Enterprises (PSEs) and appointment of competent professional m an ag er s i n u nd e r- p er for m ed institutions was a long standing demand of the priv ate sector therefore the decision would help bring in muchneeded foreign investment. Restructuring of trade and industry related gover nment insti tutions including Federal Board of Revenue and decision to end SRO culture would help bridge public-private sector trust deficit. Ten year tax holiday to the Special Eco nomic Zones an d d ecis ion to establish new industrial estates in all

the provinces would help create jobs for th e unem pl oyed you th b esid es ac ce le ra ting th e pr oce ss of ind ustrialization in the cou ntry. Construction of Express Way from Gawadar to Kashgar and Rail linkage from Gwadar to Afghanistan would turn the country into a trade corridor in the

Tax on CNG

GST 17%

Load shadding

Bills Budg et 2013-14

real sense of the word. One thousand colonies comprising 500000 housing units would not only provide shelter to low income groups but also gear up activities in allied industries. The LCCI president also appreciated the Federal government for announcing Pakistan Railways revival plan and to run it through a well designed Board of Directors. The local businessmen on the platform of Rawalpindi Chamber of Com mer ce and Ind ustry (RCCI) Wednesday rejected the first budget of PML-N-led federal government, saying new elected government has failed to fu lfill its p romised mad e during electioneering. The traders also rejected the one per cent increase in general sales tax (GST) and termed that there was no incentives for business community. "Overcome the circular debt in two months is a good promise but how it will be possible for the new government to end it in such short span of time as p reviou s government had failed to curb it in five years, assurance is good but how it will be done is yet to be unidentified," said RCCI Acting President Pervaiz Ahmed

Warr iach h er e at th e Ch amber. On the occasion, RCCI Vice President Nadeem Rauf, Group Leader Najamul Ha q M ali k, form er pr esid ents, representatives of trade associations and other members of the Chamber were al so present. Warriach said that a government suggests some steps to enhance tax base but at the same time inc reasi ng t ax rat io i s beyond comprehension. Business community is at cross ro ads and does not know whether or not the government would be able to fulfill its promises, he said. Anjuman Tajran Rawalpindi President Sheikh Sadiqque told that the increase in the sales tax will result in price hike. "The government allocated Rs 225 billion for the energy generation which is very low and it had to increase it to Rs 500 billion because the business will not run due to energy crisis," he said. He suggested that the allocation of money for laptops and money saved from Prime Minister House expenditure should be spent to impr ove th e electricity generation in the country. H M Shazad, Chairman Car Dealers Association, said the proposed budget is good enough and, if implemented, can bring a good change. Shazad said the law and order situation in the country especially in Karachi is badly affecting the trading activities and government should focus on it. He said the past experience of the hybrid cars shows that is a very expensive vehicle. And the 660 cc imported cars are petrol and budget friendly they can play a vital role to control the petrol and CNG crisis. He said as per the budget proposal given by the business community government can save revenue of Rs 50 to 60 billion. The Union of Small and Medium Enterprises (UNISAME) appreciated the increase in tax holiday period from 5 years to 10 years for Special Economic Zones (SEZ), the exemption of import duties on alternate energy systems and reduction of taxes from 35 to 30% and said these are very positiv e steps. President UNISAME Zulfikar Thaver said we had proposed 0% duty on alternate energy devices and enhancing the scope of SEZ and streamlining the FBR and are happy that the FM has advised broadening the tax net, simp lifying th e proced ures and increasing efficiency for better tax collection.

www.automark.pk | July-2013 | Page 39

Subscription Form Monthly Automotive Magazine

www.automark.pk

The Circulation Manager

Please do not pay in any case

Mailing Address cash Active Communications D-68, Block- 9, Clifton Karachi E-mail: automarkpk@gmail.com magazine@automark.pk Mobile: 0321-2203815 Tel/Fax: 021-2218526 Name:

1800 (Valid for Pakistan only)

____________________________________ Job Title: _____________________________

Company: _______________________________________________________________________ Address: ________________________________________________________________________ ____________________________

Sig.,&Co. Stamp: ___________________________________

City: ________________________

Post Code: ________________________________________

Phone:

______________________ E-mail:

Fax: ________________________

Mobile No: _____________________

Date: _____________

I enclose a demand draft or money order (not postal order) drawn on the karachi branch of a bank I enclose a cheque of Rs.________ payable to Active Communications Cheque sent from all other stations must include 300 rupees extra as bank charges

ONLINE TRANSFER MCB Bank Ltd., “Active Communications”, A/c No. 1442-1000191, Branch: Gizri, Karachi Bank Al-Falah, “Active Communications”, A/c No. 0162-1000167297, Branch: Gizri, Karachi

July-2013

Corporate Event - Press Release

Monthly AutoMark Magazine

Volvo Trucks showcases total solutions for mining industry to its Asian customers VPL limited, the local distributor of AB Volvo Products in Pakistan for over 40 years invited its customers from Cement and Mining Segment to an event organized by Volvo Trucks on Mines and Quarries at its global headquarter in Gothenberg, Sweden between 24-27 June. The event was attended by over 110 Volvo Trucks’ customers from Asia. Under the theme ‘delivering the full potential’, guests were able to experience firsthand Volvo Trucks’ total solutions for the mining industry, including the new Volvo FMX.

Guests from Pakistan, Korea, China, Mongolia, Hong Kong, Thail and, Malaysia, Singapore,Philippines and Indonesia, attended the week-long event, where they got the opportunity to take an in-depth look at Volvo Trucks’ mining offer and even test drive their latest trucks in real conditions. The purpose of the event was to showcase Volvo Trucks’ extensive experience and expertise in the mining segment. “It is important for Volvo Trucks to be able to d emonstrate on-site ou r innovative solutions in a real working environment, so that our customers can first-hand experience the durability, reliability and the uptime that goes into our total transport solutions,” says Joachim Rosenberg, Executive Vice President, Volvo Group Trucks and responsible for Asia Pacific. “It is of course challenging to fully experience a new product offering on paper only. As some would say ‘seeing is believing’ and for our customers, being here on site and test driving our new FMX through extreme conditions gives a more c om p r eh e ns i v e a n d a c c u r a t e impression.”

During the week guests also visited Volvo Trucks’ global headquarters and the Volvo Museum, as well as a tour of Volvo Trucks’ production plant in Tuve. “I’m very happy to welcome all our Asian customers to Gothenburg, and honoured that they can spend this time with us,” says Ricard Fritz, Senior Vice President Volvo Trucks Global Brand . “It’s important to meet our customers through events like this, so that we can learn more about their needs. From very early on in our history Volvo Trucks has been dealing with mining customers in northern Swed en, so the mining industry is very much a part of our heritage.”

E xperi en ci n g t h e n ew Volvo FMX One of the highlights of the week was a visit to a quarry for the chance to test drive Volvo vehicles, including the new Volvo FMX – the truck specially designed for the tough and demanding

conditions found in the mining industry. The latest version of the FMX, which was officially unveiled in Europe last April, includes a number of innovative new features that significantly improve drivability, productiv ity , off-ro ad capability, driver comfort and safety.

“The new Volvo FMX is very easy to drive compared to the previous model, the new FMX has a better engine retarder and the gear changes are even smoother.”says Mr Naimatullah Khan, Senior Manager (Mining) at Lucky Cement Pakistan’s quarry in KPK o., He informed that Lucky Cement already own a fleet of 21 Volvo Trucks and are looking forward to adding the new FMX when they are available..

www.automark.pk | July-2013 | Page 41

continued on page no.45

Generated by Foxit PDF Creator ÂŠ Foxit Software http://www.foxitsoftware.com For evaluation only.

Corporate Event - Update

Monthly AutoMark Magazine

Hinopak inaugurated 'Hinopak Model Workshop' in Karachi

Hinopak inaugurated 'Hinopak Model Workshop' by Mr. H. Kayanoki, Managing Officer, Hino Motors, Ltd., Japan and Mr. H. Komatsu Sr. General Manager, Hino Motors, Ltd., Japan at Hinopak's Body Manufacturing Plant, site area in Karachi - Pakistan on 26th June-2013.

www.automark.pk | July-2013 | Page 42

Generated by Foxit PDF Creator ÂŠ Foxit Software http://www.foxitsoftware.com For evaluation only.

MADE IN PAKISTAN MOTORCYCLES RETAIL PRICE LIST

70cc Motorcycle Sr./ No. 1. 2. 3. 4. 5. 6.

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

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

125cc Motorcycle No. 1. 2. 3. 4. 5.

Brand & Model Name Super Star SS-125 Super Star SS-125 DLX Honda CG-125 std Euro II Honda CG-125 DX Ravi Storm 125

Retail Price Rs. 59,000/= Rs. 67,000/= Rs. 99,000/= Rs. 119,000/= Rs. 99,900/=

DYL Motorcycles Product & Sr./ Model Name No. 1. YD100 Mini 2. Junoon 100cc 3. YD Sports 125cc

Retail Price Rs. 65,500/= Rs. 79,300/= Rs. 10,6000/=

Sr./ No. 7. 8. 9. 10. 11. 12.

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

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

100cc Motorcycle No. 1. 2. 3.

Brand &Model Name Honda Pridor Super Star SS-100 Super Power SP-100

Retail Price Rs. 84,000/= Rs. 57,000/= Rs. 60,000/=

Suzuki Motorcycle Sr./ Product & No. Model Name 1. Sprinter ECO 110cc 2. Sprinter STD 110cc 3. Suzuki GS-150 4. Suzuki GD 110

Retail Price Rs. 79,400/= Rs. 80,400/= Rs. 103,500/= Rs. 99,900/=

This space available for Advertisement www.automark.pk | July-2013 | Page 43

Generated by Foxit PDF Creator ÂŠ Foxit Software http://www.foxitsoftware.com For evaluation only.

Car / Light Vehicle Price List This space available for Advertisement SUZUKI

HONDA Price Price Rs. 600,000 Rs. 658,000 Rs. 1,181,000 Rs. 1,262,000 Rs. 1,398,000 Rs. 1,014,000 Rs. 1,465,000 Rs. 1,544,000 Rs. 680,000 Rs. 656,000 Rs. 2,218,000 Rs. 2,294,000 Rs. 2,142,000 Rs. 2,293,000

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 CBU JL SX MT JIMNY CBU JL DX MT

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

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

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

MASTER MOTORS DAIHATSU Model Model

Price

Master Highland M-260 Master Forland M-330 SUP Master Grand M-410 SUP

Price

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

Price Rs. 1,522,000 Rs. 1,663,000 Rs. 2,000,000 Rs. 2,232,000 Rs. 2,121,000 Rs. 2,353,000

TOYOTA COROLLA 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 1,551,500 1,687,500 1,868,500 1,602,500 1,732,500 1,607,500 1,809,000 1,914,000 1,919,500 2,015,500 1,997,500 2,105,500 1,960,000

Hilux Pickup 4x sc Model

Price

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

Rs. 1,779,500

Hilux Pickup 4x4 D/C Model Toyota HILUX 2494cc, Diesel Turbo Charger Common Rail Engine, 4x4 Double Cabin - Standard Model

Price Rs. 2,954,500

Rs. 1,188,000 TOYOTA VIGO Rs. 1,235,000 LAND ROVER Rs. 1,720,000 Model Price Price Model Model Price Master Grande Bus Chassis YL41B Rs. 1,625,000 Vigo Champ M/T Rs. 3,282,500 DEFENDER Fuso canter (Japan) Bus Chassis Rs. 2,950,000 (WHITE ,BLACK,STRONG BLUE & SILVER ) STATION WAGON 90 Rs. 3,560,000 Fuso canter (Japan) Rs. 3,025,000 STATION WAGON 110 Rs. 4,260,000 Vigo Champ A/T Rs. 3,483,500 Fuso Prime Mover (Japan) Rs. 9,450,000 (N/A)

DAIHATSU

Unit Price without Deck (WHITE ,BLACK,STRONG BLUE & SILVER )

Price updated July- 2013

PR - Continued from page no.41 Despite not being available in Asia just yet, the guests at the Volvo in Mines and Quarries event were given the chance to preview the new model so that they could see first hand the progress Volvo Trucks has made in this segment and the level of technology they can offer.

One-stop shop for complete solutions The Volvo in Mines and Quarries event was also used to highlight Volvo Trucks’ complete offers and total solutions, including aftermarket services and ability to offer tailor-made packages that cover multiple needs within the mining industry. Examples of such support include round-the-clock onsite support, driver training and guidance to ensure optimised fuel consumption as well as telematic services for fleet management and genuine Volvo parts.

In addition, the Volvo in Mines and Quarries event also highlighted the benefits of Volvo Trucks’ collaboration with Volvo Construction Equipment and Volvo Penta, whereby the three companies can combine their product offers to cover a range of customer needs in one package. “Our ambition isn’t to merely satisfy our customers’ expectations – it is to exceed their expectations,” adds Joachim Rosenberg. “At this event, we are demonstrating total mining solutions from Volvo Trucks. Through our combined offering with Volvo Construction Equipment and Volvo Penta, we are also showcasing a one-stop total solution. In addition, we are demonstrating how we can specify products, give valuable advice on fuel efficiency and improve uptime, even in the toughest mining conditions.” Volvo Trucks provides complete transport solutions for professional and demanding customers, offering a full range of medium to heavy duty trucks. Customer support is secured via a global network of 2,300 dealers and workshops in more than 140 countries. Volvo trucks are assembled in 16 countries across the globe. In 2011 more than 115,000 Volvo trucks were delivered worldwide. Volvo Trucks is part of the Volvo Group, one of the world’s leading manufacturers of trucks, buses and construction equipment and drive systems for marine and industrial applications. The Group also provides solutions for financing and service. Volvo’s work is based on the core values of quality, safety and environmental care.

www.automark.pk | July-2013 | Page 45

Monthly AutoMark Magazine

Generated by Foxit PDF Creator ÂŠ Foxit Software http://www.foxitsoftware.com For evaluation only.

Monthly AutoMark Magazine

Automotive Sector - Update

Al Habtoor all set to launch Chery in UAE Recently, China’s largest passenger vehicle exporter Chery has forged a partnership with one of UAE top three automobile distributors Al Habtoor and two sides concluded a cooperation agreement. Under the agreement, Al Habtoor will be in charge of the sales of Chery’s all series of passenger vehicles and commercial vehicles in the UAE as Chery’s distributor in the UAE. Al Habtoor Motors is all set to adorn the UAE's automotive skyline with a new star launch. The leading UAE automotive dealership is set to launch Chery, the No.1 Chinese car brand in China across the UAE. The co ntract was signed by Sultan Al Habtoor, president of Al Habtoor Motors and Michael Zhang, deputy general manager of Middle East Region for Chery in the presence of Ahmed Khalaf Al Habtoor, CEO; Amna Al Habtoor, marketing manager, and all Al Habtoor Motors directors. Chery Automobiles, which was founded in 1997, manufactures passenger vehicles and commercial vehicles in various segme nts an d has global presence in over 80 countries. As a part of this collaboration, Al Habtoor Motors will be introducing the complete Chery range in the passenger and commercial vehicles. This partnership between Al Habtoor Motors and Chery Automobiles has come to news at the right time when Chery has been receiving international coverage for its product launches across more than 80 countries in addition to Chery's recent joint-venture with a leading automo bile manufacturer. "Introducing Chery in the UAE was a very strategic decision for Al Habtoor Motors. We are impressed by the fast growth, innovation and competitive range that is visible in the Chery line up.

The contract was signed by Sultan Al Habtoor and Michael Zhang in the presence of Ahmed Khalaf Al Habtoor and Amna Al Habtoor

We believe that this is great news for all the residents of the UAE," said Joe Rogan, sales director of Al Habtoor Motors. "Al Habtoor Motors is currently looking at September for the launch of the Chery showroom in Dubai and will formally unveil the range at the Dubai International Motor Show. We'll be targeting fleet buyers along with individual customers. Needless to say, we are thrilled about the new member of our Al Habtoor Motors family and are confident that Chery will make its way to the UAE roads in greater numbers year on year," h e said. Michael Zhang said: "Chery, the No.1

Chinese car brand in China, is excited to enter the UAE market with a bang. The passion for making Chery the chosen global brand is what led us to the decision of entering this market. Al Habtoor Motors is one of the leading aut omotive dealers in the UAE and possess the kind of industry expertise that Chery has been looking for in its business partner in the UAE. We are proud to be associated with Al Habtoor Motors and look forward to a great relationship for many years to come."

www.automark.pk | June-2013 | Page 47

Generated by Foxit PDF Creator ÂŠ Foxit Software http://www.foxitsoftware.com For evaluation only.