Automark Magazine may 2013

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GIVING PEACE AND TRUST TO PAKISTAN VENDORS BY RELIABLE EXPORTING OF MACHINES, MOULDS, RAW MATERIALS AND COMPONENTS.

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CONTENTS

Monthly AutoMark Annual Sales Conference 2013 by Service Industrial Limited

12-13

Assemblers, used car dealers hit back at amnesty scheme locally assembled car An Exclusive article by M. Owais Khan

14-16

InShaALLAH Pakistan set to make “Made in Pakistan” An Exclusive article by Ali Hassan

17-18

Motorcycle/Rikshaws Productions fig.

19-21

Motorbike assemblers delaying payments 27 to vendors: PAAPAM Chinese Automotive news

35

Gardner Denver Recognizes 39 Rastgar & Co as "The Vendor of the Year" Memon Motor Participates in 6th All Pakistan Memon Federation Exhibition at Karachi Expo

39

Sneak Peek into the Simplified Euro 2 Technology of 70cc Motorbike

By Shahzad Tabish

41-42

Delivering Stellar Customer Service 43-44 Transforming Complaints into Compliments

By Mohammad Shahzad from Canada Motorcycles Price List

46-47

THINK SMALL The Need of Smart Cars in Pakistan Exclusive Article by Razi Nayyer

48

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

AUTOMARK Important time for Pakistan

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 General Manager Plant Karakoram Motors (Pvt) Ltd., Karachi J. Pereira Senior automotive professional 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 period between 11th May’s vote and the formation of next government will be highly important from the perspective of businesspeople in the country. A historic rise in the KSE i nde x in re ce nt d ays can be interpreted as evidence, however empirical, in relation to investor confidence in the country’s economic future. Lack of productivity has turned the tax collection targets into a mission impossible. Notwithstanding the existence of rampant corruption and concomitant complacency in the tax collection machinery, missing the tax collection target by a wide margin will add to the country’s fiscal deficit.

Moreover, overcoming chronic energy shortages will be a matter of longhaul for any government to spur growth with a view to creating two million or more new jobs every year.

It is not known whether or not the new government will be able to o verco me myria d e co n omi c challenges even during the entire span of its 5-year constitutional term, what is, however known, is the fact that its immediate challenge will be the urgency to cut a deal with the IMF to help improve its Balance of Payment (BoP) position that is likely to worsen in coming weeks and months mainly because of payments to the Fund for the last SBA, depleting forex reserves and a profound lack of foreign inflows because of a glaring absence of efforts aimed at making an ideal pitch to foreign investors.

Unfortunately, however, while the Supreme Court decision on Pakistan Steel Mills has led to added burden on the national exchequer its verdict in Reko Diq mining venture case will not augur well for the country’s FDI prospects.

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Exclusive Article by M. Owais Khan

Monthly AutoMark Magazine

Assemblers, used car dealers hit back at amnesty scheme The auto industry was well poised to touch half million mark by 2013 when a long term Auto Industry Development Program (AIDP) was brought in place in 2007. However, relaxation in import of used cars coupled with recession in Pakistan derailed the plan; in all since 2007 there have been several changes in various policies which has impacted the local industry such as relaxation in used cars policy, amnesty to smuggled vehicles, ban on CNG vehicles, regulatory duty on CBUs, WHT imposition at registration stage, Changes in GST/Sales Tax, etc.

Th e policies of t he g overnmen t departments always contradict each other. Some black sheep try to facilitate the vested interest groups while sincere officials strive to block the controversial move.

The revenue collecting government body aims to get the highest revenues or to overcome revenue shortfall whether its decisions play havoc with the local industry or serve the interest of vested

interest.

On the other hand, Commerce and Industry ministries also act against each other when policies are framed for the local car assemblers or any other industries. Even they also sometimes lament FBR move.

The role of Federal Board of Revenue (FBR) by allow in g and clearing smuggled cars under amnesty scheme is certainly a one-sided act aimed at

APMDA views on amnesty scheme Chairman All Pakistan Motor Dealers Association (APMDA) Haji Mohammad Shahzad gave the reference to the SRO172(1) 2013 dated:05-03-2013 which gives amnesty and incentive to owners of smuggled and non- tax paid vehicles.

Through this SRO, the Government had allowed legalizing vehicles of any age, make or model and at the same time reduced the duties as incentive.

Last year, CGO-13/2012 dated 31-8-12 w as iss ued w hich curta iled the depreciation on import of used vehicles which effectively increased the custom duties. Then, just a couple of months ago, the ECC reduced the importable age of used cars from five to three years vide SRO-1441 dated 12-12-12 which has made the whole business completely unfeasible and the import of used cars will completely stop. But again, the Govern men t created disharmony because this applies to only cars whereas other vehicles of older age can still be impo rted as per previous SRO .

It seems that all the restrictions are applied for those citizens who want to adopt the legal path while smugglers and criminals are given incentives and

amnesty.

He is of the view that that people resort to illegal means when there are so many restrictions for legal t rad e and t he duties/tariffs are high.

Now that the Go vernment ha s allowed legalizing cars H.M. Shahzad of any age cars what is the justification of restricting legal imports to 3 year old cars only. Should they also resort to duty evasion and smuggling? If these restrictions on age are removed and duty is reduced, the people will gladly pay the duties and brin g in thes e veh icles leg ally.

Shahzad urged the government that the amnesty scheme which is applied discriminately should be withdrawn and the SRO-1441 dated 12-12-12 should also be withdrawn and all restrictions on age of importable cars should be removed and duties should also be re-calculated so that smuggling becomes a nonprofitable venture and legal transactions are encouraged.

facilitating a lobby and tax dodgers and certainly this move has hit the local auto sector.

The FBR is reported to have collected Rs 16 billion under amnesty scheme on 51,000 smuggled vehicles whereas in real terms that the incompetence of the FBR has paved way for smuggling of cars and other vehicles besides depriving the national kitty of Rs 30 billion.

For many clever people this is the right time to buy smuggled vehicle after getting clearance from the FBR instead of purchasing locally assembled cars and other used vehicles which arrived by pa ying full duties an d taxes.

However, for providing relief to the vested interest, the FBR has taken a step causing double loss to the country’s economy – one by depriving the local manufacturing sector level playing field and secon dly to the government from getting revenue through legal channels.

Smuggled vehicles could have been impounded easily as they are meant to ply on roads. But it has not been done

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Monthly AutoMark Magazine

Exclusive Article - Continued

According to the State Bank Data, a used imported car consumes more than twice the amount of foreign exchange compared to locally manufactured car and at the same point in time enjoys 60% tax rebates.

Whereas every locally manufactured car contributes 33% of its retail selling prices towards national exchequer in the shape of duty and taxes. because the owners of the smuggled vehicles are influential people and the FBR does not have the courage to nab them.

Car assemblers said the amnesty on smuggled vehicles is injustice with the honest consumers that imported the same vehicles legally and paid full duties.

They said that had the smugglers been asked to at least pay the notified duties on the 51,000 smuggled vehicles the duty amount would have been at least Rs 30 billion.

So instead of celebrating the FBR should mourn the loss of Rs 14 billion due to this amnesty. They said that smuggling is a criminal offence which carries both jail sentences and heavy fines. They said that in case the FBR showed courage and impounded these vehicles it could have collected another Rs 10-12 billion as fines from the owners of smuggled vehicles.

If we compare smuggled consumable items or other small items their import volume is huge and it cannot be a p p re h en d d ue to t h eir ra p id consumption. On the other hand, smuggled vehicles are big movable property which cannot be hidden and easily be impounded on the roads.

But when the government departments try to serve the interest of others and powerful lobbies then the departments show its weakness and incompetence and FBR did the same thing by granting amnesty to smuggled cars.

Smuggled vehicles are on the display in the open markets in various parts of the country and are being sold by roadside dealers at premium prices who do not pay any sales or income tax as well.

By granting this amnesty the FBR has provided an excellent avenue to convert black money into white by investing all black money in luxury smuggled vehicles

which then can be sold in open market at very attractive prices.

They also stated that the previous government had set a very wrong precedent of legitimizing smuggling and the entire scheme was executed in a very shady manner by customs. Traders, they added, have cleared their vehicles on just engine/chassis numbers avoiding all procedures and physical checks by the customs with the connivance of local customs officials.

The local industry has contributed over Rs 42 billion in the shape of duties and taxes on a combined revenue of Rs 173 billion. If Heavy Commercial Vehicle Sector numbers would be added then this figure would be even higher. Locally manufactured high end Sedan and SUVs give over 30 per cent of its retail selling price to government against duty and taxes whereas these smuggled vehicles were cleared ag ainst paltry sum.

Moreover it is also being reported that out of 50,000 vehicles, 30,000 vehicles are actually not even present in Pakistan and will imported later on, so it shows how strong the import mafia is.

Amidst economic uncertainty and inconsistent policies, the auto Industry is extremely worried about its future prospects. As there is no clear policy, in dustry can no t pla n for fu ture volumes/products and is unsure where it would be in next 10 years.

The sales volumes remained in red in the current fiscal year as first huge used vehicles imports of five years old eroded the market share of the local industry and the amnesty scheme further hit the

sales volumes.

According to data issued by Pakistan Automotive Manufacturers Association (P AMA), overa ll s ale of loc ally assembled cars dropped by 24 per cent in July-April 2012-2013 to 95,467 units from 126,081 units in the same period last fiscal year.

While the sale of all Japanese cars tumbled in the above period, only Honda Civic and Honda City sales swelled to 7,522 and 9,014 units from 4,344 and 4,407 units in July-April 2011-2012.

Toyota Corolla is suffering due to consumers’ tilt towards to the Honda Civic and City despite the fact that the assembler of Corolla is trying hard to provide new facilities and features in Corolla models.

It seems that the import of used cars and clearance of vehicles under amnesty scheme had not given a tough time to the Honda car assembler since the latest features, designs, Euro IV engine and other facilities excel Honda cars with used cars and locally assembled Toyota Corolla models.

However, suspension of non-Euro II models like Suzuki Alto and Daihatsu Cuore had shaken the figures of PAMA badly while decline in interest rates in the last few months had also not given any substantial boost to the car leasing and financing by the private banks.

Sales of Suzuki Mehran, Cultus and Bolan had been feeling the pinch of in flux of used ca rs . After som e restrictions and changes like bringing used car age limit to three from five years, depreciation value and import procedures under various schemes etc, the assemblers are hopeful to see some betterment in coming months as the used cars stocks parked at the ports and s how roo ms are slowly recedin g.

People may come out after June in case the new government provides some relief to the local industry in shape of taxes and duties and new government takes up control of the country smoothly.

Hopefully consumers’ confidence may revive after elections and budget of new democratic government.

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Exclusive Article - Continued

Monthly AutoMark Magazine The auto industry was well poised to touch half million mark by 2013 when a long term Auto Industry Development Program (AIDP) was brought in place in 2007. However, relaxation in import of used cars coupled with recession in Pakistan derailed the plan; in all since 2007 there have been several changes in various policies which has impacted the local industry such as relaxation in used cars policy, amnesty to smuggled vehicles, ban on CNG vehicles, regulatory duty on CBUs, WHT imposition at registration stage, Changes in GST/Sales Tax, etc.

The Ministry of Industries asked some questions during last meeting (March last week) to which the auto industry gave ample replies but the fact remains that since last one and a half year the industry and government are engaged in negotiations on AIDP II which to date have not been finalised.

Import duty on new cars in Pakistan ranges from 50-80 percent which is much lower than the duties charged by India and Thailand on new cars. Instead these countries have taken a firm decision to encourage local auto industry thereby developing appropriate policies to attract global car makers and sticking on to their policies of maintaining higher CBU tariff and lower CKD tariff while maintaining adequate protection for vendors and not allowing imports of used cars.

Pakistan is a unique case where policy makers are indecisive as to which direction they should take.

The duties on used cars (allowed as gift or personal use only) the world over are charged on the latest value of new car of same brand. However, in Pakistan the value has been fixed absurdly low under 2005 SRO and even on that there is a depreciation allowance of 60 percent, a clear manifestation of moving towards trade instead of manufacturing. At the time when all subsidies are being questioned by lenders and donor agencies, the 60% depreciation subsidy given to use imported cars is incomp-rehensible for the industry.

According to the State Bank Data, a used imported car consumes more than twice the amount of foreign exchange compared to locally manufactured car and at the same point in time enjoys 60% tax rebates. Whereas every locally manufactured car contributes 33% of its retail selling prices towards national exchequer in the shape of duty and taxes.

If the Govt really wants to benefit from local manufacturing it will have to bring down CKD duties to the regional level of 10-12%....

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Exclusive Article by Ali Hassan

Monthly AutoMark Magazine

InShaALLAH Pakistan set to make “Made in Pakistan” small car after 14 years, Sabir Shaikh hopes

Prime Minister Nawaz Sharif in a visit to Sindh Engineering Limited Karachi Plant announced to make Pakistan’s own small car 14 years back but it could not be materialized due to various reasons.

Now Allah has bestowed him another chance to develop Pakistan including the industrial base, Nawaz Sharif’s dream will definitely be fulfilled to make and arrange Pakistan’s own small car with the help of Chinese and some other international firms.

In the last 14 years Pakistan’s auto sector with the help of bureaucracy had been making money instead of striving for a n y fut ure d evelo pm ent as p er international standards. Successive governments did not pay any heed on this issue and destroyed Pakistan’s own SME’s sector due to faulty policies.

The finance ministry, ministry of in dus tries a nd E ng in e e rin g Development Board (EDB) literally wasted 14 years of local entrepreneurs and due to their ill-conceived policies the country saw rising un-employment and smuggling thrived. On the other hand, tax evaders enjoyed hey days.

Genuine businessmen suffered heavily as they did not adjust in the system created by that mafia.

The auto sector failed to enhance the exports in the last 14 years due to rising cost of production, bad policies and no control on exchange rate.

Lack of policies by the Federal Board of Revenue (FBR) an d especially in valuation department, the Customs i s s u ed m a n y w r o n g v a l u a t i o n advices/rulings on the higher side for C h in es e t w o w h eeler in du s tr y.

Chief coordinator of Association of Pa kistan Mo torcycle Assemblers Mohammad Sabir Shaikh said that issuing higher valuation ruling was a pre-planned move to encourage official

smuggling through misdeclaration in connivance with customs officials to release importers’ goods by greasing the palm of officials so that higher valuation could not be imposed on the parts. As a result, Pakistan suffered heavily due to this type of corruption at customs level.

Sabir says he will discuss these issues with the new finance minister to resolve this matter permanently.

He offered that he would support new government for the establishment of Pakistan’s own small car.

He hailed PML-N Nawaz Sharif and his party/team for achieving grand success in the May 11 elections. The chief coordinator of Association of Pakistan Motorcycle Assemblers (APMA) Mohammad Sabir Shaikh says he already knew about the May 11 election results.

“Frankly speaking, I see very good days of Pakistan near future,” he said hoping that the new government will try hard

Ministry of Industry Government of Pakistan

to bail out entire auto sector from lingering crisis.

He said he would talk to the new finance minister and give him a detailed outlook of bike industry especially besides suggesting changes in taxes and duties so that the SMEs sector could come back on track and produce affordable bikes for the end users.

“I am sure that the new budget 20132014 will be peoples’ and industry friendly and business will flourish again in Pakistan after 14 years because the PML N chief is a business friendly person,” Sabir said.

As the SMEs are highly perturbed in the last five years due to their falling profit and high cost of production, Sabir hopes that their profits will improve after the new budget and the finance ministry will understand the issues of SMEs and immediately solve their problems to improve the business environment. He also hopes that the new PML N

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Exclusive Article - continued

Chief coordinator APMA Mohammad Sabir Shaikh, who represents, small and medium-sized motorcycle assemblers in the country, complain that the government is not providing a level playing field to all players. He argues that policies vary for big and small players and these are heavily tilted in favor of big companies government will take every step to control the falling value of the rupee against major currencies especially the US dollar.

APMA co-ordinator says that he will inform every ministry of the new government which are involved in policy making that the bike industry is like a bubble surviving on one 70cc model for the last 50 years. The engine of 70cc bike is still being imported from China and other parts of the world. Even the model our country produces had already been terminated in bike makin g countries and even in India above 100cc bikes are ruling the roads. In case if 50cc scooty available in these countries these two wheeler are being mostly used by the young girls and ladies instead of young men. In our country no culture exists for using bikes by the young girls and ladies.

Sabir Shaikh claims that he knows that how sales tax can be imposed at retail stage and he has a complete idea for imposing sales tax on retail stage which would not draw any criticism from the retailers’ bodies because it is highly simplified and easy to understand for every retailer and even the government tax collection body.

He said Pakistani industrialists or importers including smugglers of imported goods do not want imposition of sales tax at retail side and everybody blames retailers for defying paying the tax at retailers’ end.

Chief coordinator APMA Mohammad Sabir Shaikh, who represents, small and medium-sized motorcycle assemblers in the country, complain that the government is not providing a level playing field to all players. He argues that policies vary for big and small players and these are heavily tilted in favor of big companies.

First of all the government should inform us about the period of AIDP in the last five years whether it was 20052010, 2006-2011 or 2007-2012. The deletion program was terminated on Jun e 30, 2004. The government announced the new tariff based system (TBS) in 2005 and on June 2006 the budget of the same year the main three SROs of TBS – 255/2006, 256/2006 and 293/2006 were issued.

The government is in the process of formulating AIDP 2013-2018. The

government should confirm the time period of last AIDP and why the previous AIDP was not implemented in letter and spirit.

Sabir Shaikh said that he will not accept the new AIDP 2013-2018 before the new set up of the government. Giving the reason, he said that all the people and the department involved in this process are same who had prepared all the policies of the auto sector in the last 14 years.

He said the motorcycle industry has been showing a steady growth over the last three years. Annual production of motorcycles has remained stable at around 1.6 million units for the last three years and has the potential to grow sharply because of strong demand in the domestic market.

Sabir said the market share of local Chinese made bikes is more than one million units in the last three years while the market share of Atlas Honda is near about 600,000 units.

He said Pak Suzuki Motor Company has posted profit after tax of Rs362 million in the first quarter of the current calendar year, down 38% from a year earlier when demand was driven substantially higher by the Punjab taxi scheme.

Earnings per share (EPS) remained at Rs4.40 in 1QCY13. “The result was above ours and consensus expectation of the market.

On a quarter-on-quarter basis, the first quarter results reflected a turnaround for the company as it switched to profit from a loss after tax of Rs189 million (loss per share of Rs2.41) in the fourth qua rter of ca len d ar year 201 2.

The turnaround came primarily on the back of improvement in gross margins to 4.7% as well as increase in sales

volume. Sales of the company rose significantly by 27% to 21,104 units in 1QCY13 versus 16,655 units in 4QCY12 following imposition of tougher age restrictions on the import of used cars.

The increase in profit of Pak Suzuki was mainly aided by the depreciation of the Japanese yen that has lost 15% of its value in the past six months.

“What is good for the domestic automobile assemblers is that the Japanese government is keeping the yen low to give a boost to its exports and that will continue to support the performance of these companies in Pakistan,” Sabir added.

In the first quarter of 2012, the Punjab taxi scheme pushed sales volume of Pak Suzuki substantially to 30,642 units.

But after the end of the scheme, the volume stabilised at 21,104 units in 1Q CY1 3 wh ile comp etition from imp orted us ed ca rs a ls o eas ed.

Sabir Shaikh said that Pak Suzuki was the only company who completed government’s demand and rules for achieving Euro II compliant bikes in Pakistan. He said by standard and quality Pak Suzuki is offering its bikes at low prices as compared to its competitors.

In the last 12 years motorcycle industry has grown tremendously as in 19992000, bike production was just 121,000 units which swelled to 1.628 million in 2011-2012.

As the growth in profit of various manufacturers showed a mixed trend - the big assemblers are posting good results while the small and medium sized bike makers are struggling for their survival due to low production and profit.

He said the main reasons of low profit and production of small units are strict rules and higher taxation while big assemblers are all members of the government’s committee where decision are taken and that is why the taxes are low on big assemblers. He said he is ready to visit Islamabad to take stock of the situation as soon as the new government takes control of the country.

H e o ffe red h is ser vice s t o t he government without any personal gains or any other post….

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Production Figures - Update

Monthly AutoMark Magazine

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Production Figures - Update

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Production Figures - Update

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Automotive Sector - Update

Paapam for steps to market Pak auto sector abroad Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) called for an enhanced role of TDAP for participation of local auto engineering companies in international fairs to develop contacts with world man ufacturers and an alyse joint ventures with them.

PAAPAM Chairman Munir Bana said, “ R e p e a t e d v i s it s a n d r e g u l a r participation in international mega events are vital to attract export orders.”

He said the TDAP restricted its financial support only to two fairs in a year, citing that these kinds of limits did not suit the engineering sector.

As the complete export process of engineering items took one to three years because it included receipt of inquiry, designing, development, sampling and then issuance of purchase order.

Since Pakistan had been a late entrant in world engineering market, he added, the Pak engineering sector needed support to fulfill the immense potential for exports.

Munir Bana also stressed upon the TDAP to enhance its allocations of funds to ensure more participation of auto

engineering sector in global fairs in view of the sector’s huge potential of growth, as holding exhibitions and sending trade delegations abroad were imperative to promote exports and explore new markets.

He said, “We have potential large exporters that wish to participate in the fair but don’t have the requisite visa to attend. And in stea d of assisting exporters in obtaining visa, the Authority has imposed restrictions on several participants as per past practice; visas are issued after recommendation letters from TDAP. With more than 7 months to go before the show starts, TDAP demand for valid visa from exhibitors is ridiculous. We have written several letters, requesting local office as well as TDAP Karachi headquarters and CEO himself to address our concerns but they did not bother to respond to our request.”

“TDAP has been hosting a Pakistan Pavilion at this show since 2004. The US is a huge market and this particular show is the largest show in the auto OE and after-market sectors. This recent change in policy is a surprise and shock for regular attendees of this particular

Suzuki earns profit of Rs 362 million Pak Suzuki Motor Company (PSMC) reported profitafter-tax of Rs362 million (earnings p er sh are of Rs4.40) for the first quarter of 2013, down by 38 percent on year-on-year basis on account of low volumes, which went down by 31 percent on year-on-year basis.

The first half of CY2012 was the period of Punjab Taxi Scheme that took the volumes up substantially (30,642 units).

The volumes normalised to 21,104 units in the first quarter of CY2013 as the competition from imported cars eased off.

“The result was above our and consensus expectations,” a BMA research report showed.

On quarter-on-quarter basis, the results depicted a turnaround for the company where its profitability came into green (earnings per share of Rs4.40) from the loss-after-tax of Rs189 million (loss per share of Rs2.41) in the fourth quarter of 2012, primarily due to improvement in gross margins to 4.7 percent and pull back in volumes (up by 27 percent quarter-on-quarter).

The company’s sales units rose by 27 percent to 21,104 units in the first quarter of 2013 against 16,655 units in the fourth quarter of 2012 on account of the recently imposed restriction on the age limit of used cars.

show,” he said.

Munir Bana said that TDAP was assigned to work with exporters in close liaison for promotin g trade and maximizing exports from Pakistan. He said that TDAP was also tasked to help facilitate exporters’ capabilities and capacities. However, all these goals were just on paper while the ground situation is that TDAP had failed to provide any worthwhile support to exporters for i m p ro v i n g ex p o rt s , h e a d d ed .

The PAAPAM, he said, had sent its teams to global events for studying world automotive industry and introducing its members to international markets and build up their businesses keeping in view global economies and scales.

While, Vice chairman Usman Malik suggested that government should allocate funds to sponsor visiting d e leg a t io n s fo r ex p lo ra t io n o f opportunities in untapped and new markets.

H e als o recom men ded t ha t th e commercial section of the embassies abroad should carry out pre-marketing activities in the country where exhibition was scheduled.

Auto sector shows dismal sales Au t o s ec t o r s h o w e d a d i s m a l performance in terms of sales, except for 35 per cent increase in tractors durin g July-M arch 2012-2013 as compared to the same period of last fiscal year.

According to figures of Pakistan Automotive Manufacturers Association (PAMA), passenger cars sale fell by 24.5pc followed by a drop in other segments –21pc in trucks, 7.5pc in buses, 31pc in pick-ups and 0.36pc in two and three-wheelers.

Indus Motor Company (IMC) launched locally-assembled Toyota Fortuner (SUV) ahead of general elections.

The company produced 101 vehicles in February 2013 which rose to 168 units in March 2013, making a cumulative production of 269 units in two months.

Due to good response, sales stood at 231 units in the last two months.

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Automotive Sector - Update

Motorbike assemblers delaying payments to vendors: PAAPAM Addressing the meeting PAAPAM Chairman Munir Bana said that the Engineering Development Board of Pakistan issued these assemblers licenses of motorcycles manufacturer in Pakistan and auto parts companies generally consider EDB's certification as credible to supply components to them on credit When the automotive parts industry is already under financial burden due to liquidity crunch amidst adverse policies, lack of export incentives, non-availability of credit and absence of utility services, the motorbike assemblers have started to delay payments to the auto parts vendors.

Pakistan Association of Automotive Parts & Accessories Manufacturers Chairman, Mun ir Ban a an d Vice Chairman Usman Malik stated this at t h e a s s o c ia t i o n 's m a n a g e m e n t committee meeting on last week. The meeting was called to deliberate the burning issue of non-payments by the bike assemblers to PAAPAM members.

On this occasion, convenor of the TwoW heeler Stan din g Comm ittee of PAAPAM, Iftikhar Ahmed, provided the meeting full details of defaulting local bike companies. Expressing serious concern, the convenor said that unpaid invoices of auto parts makers by the motorcycle assemblers of 70CC Chinese version are continued to escalate.

Addressing the meeting PAAPAM aerodynamic parameters enable small cars to slice through air resistance, expertly.

• Power --- today’s new intelligent engines, despite their small size, deliver abundant power, with fantastic fuel efficiency rendered in both city and long distance highway driving.

• Safety--- with a host of active safety features such as ABS, air ba gs, strengthened cabin structure and use of energy-absorbing materials to protect from secondary impact, the small car is being rated most highly.

• Panache---sparkling colours, glossy fittings and new body features make them stand out, Their size makes driving through tight city street a breeze, Smaller turning circles make the chores of

Chairman Munir Bana said that the Engineering Development Board of Pakistan issued these assemblers licenses of motorcycles manufacturer in Pakistan and auto parts companies generally consider EDB's certification as credible to supply components to them on credit.

He complained that the situation is now gettin g serious when motorcycle assemblers have started to either delay payments or straight away default, leaving parts manufacturers with no recourse. He raised the point that at a time when the vendors were already facing a number of challenges, including prolonged energy crisis, deteriorating law and order situation, high input cost and struggling for its survival, the assemblers are engaged in creating more hurdles for their parts providers.

The chairman said the parts industry is presently unable to meet its working capital requirement due to exceptional hike in rupee-dollar parity, which is ultimately increasing cost of doing business particularly in Punjab where parallel parking and U-turns quick and easy…leaving big car drivers huffing and puffing in frustration..

A friend in automotive used to be a bigcar junkie. He now owns a shiny new mini car. We saw him the other day, driving out from a trendy shopping mall in the Karachi. He looked decidedly at ease, circumspect and, dare I say it, even fetch in gly elegan t his demeano r immediately brought to mind a wellknown proverb: humility is a sign of good breeding.

And now, humility is also a sign of smart road economics. Happy Motoring Article contributed by: RAZI NAYYER – CEO and Founder Team NAYYER Private Limited.

number of industries is squeezing.

PAAPAM vice chairman Usman Malik complained of negative treatment and non serious attitude of a number of assemblers who have made it a practice to default on payments of one supplier and then shift to another one. "In fact, almost 90 percent of the funds are being used by the assemblers for their operations actually belong to the vendors who are now facing immense problems due to this dishonesty", he added.

Usman Malik claimed that a number of auto parts SME's have closed their business due to non-payment and their owners are running from pillar to post for recovery. "This situation will not serve the industry well. I am very much surprised why only our local companies indulge in such negative business practices. Our small parts manufacturers go to extreme efforts to arrange funds for their companies, as the banks do not lend to them easily. It is the hard earned money of these small entrepreneurs that i s m i s u s ed by t h e m o t o rc y cl e manufacturers in their own running operations. This practice must stop immediately".

Different parts makers, addressing the meeting said that the OEMs gets parts from vendors, assemble their bikes, sell it in the market, enjoys the profit but do not consider paying their bills on time.

They stated that this attitude of the Chinese Pakistani brand companies is very bad. Though one or two brands have made improvements in their payments yet many still continue to exploit the small parts makers. They, however, appreciated the Japanese motorcycle assemblers who have not only created a prompt payment regime but also being consistent in upgrading their parts suppliers.

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Energy & CNG Sector - Update

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SC asks FIA to probe award of CNG licences by PPP govt Also orders investigation into illegal change of sites of 47 CNG stations Taking notice over the issuance of more than 1,400 CNG licences by the former PPP-led government despite a ban, the Supreme Court has directed the FIA director general to appoint a team of honest and competent officers to investigate the matter and submit a report within six weeks.

The court observed that the investigation by the FIA would provide a basis for a ju dg em en t a fter t he co u rt h as ascertained whether rules and procedure were followed in issuance of over 1,400 CNG licences from March 2008 to July 2012 by the former government. A threemember bench of the apex court, headed

by Chief Justice of Pakistan Iftikhar Muhammad Chaudhry, hearing the suo motu case regarding the illegal issuance of CNG licences, observed that since it is not possible to examine each case, therefore the FIA team should initially conduct inquiry into 20 cases by picking up case files at random in equal number, five from each province, as well as five

case files from the Islamabad Capital Territory (ICT).

The bench also asked the FIA to probe 64 CNG licences which were issued after the approval of prime minister’s summary. It has sought reply from the commerce secretary and FBR chairman regarding the lifting of ban on the import of CNG kits and cylinders between December 15, 2012 and December 31, 2012, to give relief to one party. During the hearing, the court was surprised to know that sites of 47 CNG stations were also changed illegally during the tenure of former OGRA chairman Tauqir Sadiq.

Upon this, the bench further ordered the FIA to probe this matter as well.

The counsel for OGRA, Iftikhar Gilani, told the bench that former OGRA chairman had issued 650 CNG licences; however, he argued that not a single licence was issued by the present chairman. Petroleum Secretary Abdi Saeed submitted to the court that a ban was imposed on import of CNG cylinders

and kits by the Economic Coordination Committee of the Cabinet (ECC) on December 15, 2011 and SRO for the same was issued by the Ministry of Commerce on February 1, 2012. The court was further informed that ban was relaxed for two weeks by the ECC to facilitate those who had already placed their import orders. The court directed the FBR to submit comments after the petroleum secretary informed it that the consignment of parts and kits is lying at the ports.

Earlier, during the proceedings, Iftikhar Gilani requested the court to appoint a retired judge instead of FIA to conduct the inquiry into issuance of CNG licences by the previous government when there was complete ban on them due to shortage of gas. He said that the new chairman of OGRA has not issued a single CNG licence and has rather requested the government to impose a com plete ban on n ew licen ces .

OGRA reluctant to recover cess collected by CNG stations The Oil and Gas Regulatory Authority (Ogra) has distanced itself from the tricky issue of gas infrastructure development cess and refused to shoulder the responsibility of recovering the cess running into billions of rupees from compressed natural gas (CNG) station owners.

To the surprise of many, CNG stations are charging the cess from commuters, but they are not depositing the collected a m o u n t w i t h g a s d i s t r ib u t i o n companies, which are not making any demand, officials say.

Gas companies are hesitant because of an order issued by the Islamabad High Court (IHC) on January 31 this year, res tricting the govern men t from collecting the cess.

The previous government had imposed the cess on gas consumers in a bid to raise adequate funds to finance the IranP a k is t a n g a s pi p eli n e p ro je ct .

The government is confused how gas

companies will be able to recover billions of rupees from the CNG stations if the IHC judgment is upheld by higher courts. According to the IHC, the cess already collected should be adjusted in future bills of CNG stations, which were the petitioners in the case.

Though gas companies have stopped demanding the tax, the CNG stations are still charging it from consumers, officials say.

The Ministry of Petroleum and Natural R esources h as sug gested to g as companies that if the consumers are paying the tax, the amount should be deposited with the public exchequer regardless of the outcome of the case pertainin g to legality of the tax.

I n region -I compris in g Kh yberPakhtunkhwa, Balochistan and Potohar region, CNG consumers are paying Rs13.25 per kg as cess and in region-II covering Sindh and Punjab they are paying Rs10.64 per kg.

According to documents, the petroleum ministry had asked Ogra to issue a directive to CNG stations to accurately account for the cess collected by them.

However, Ogra, in a letter sent to the ministry on April 18, argued that the imposition of cess, its collection, payment or any other matter fell in the purview of the petroleum ministry.

Stressing that it could not issue any order, Ogra suggested that the ministry could directly inform all concerned for necessary compliance.

In a recent letter to the Ministry of Law, the petroleum ministry said it had advised gas companies and Ogra that cess collection should be reflected in the bills issued by the utilities to the c on s um ers o f n at ura l ga s . Ga s companies were also asked to add a note to their utility bills with respect to the cess reflecting that “presently (it was) subjected to a stay order/status quo issued by various courts.”

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Indian Automotive Industry - Update

Yamaha establishes 5th Global R&D Centre in India

Japanese two-wheeler manufacturer Yamaha Motor announced setting up of its fifth g lo ba l res earch an d development (R & D) headquarter in Surajpur, Uttar Pradesh that would help develop low-cost models in future.

The other four overseas R & D headquarters are located in China, Italy, Taiwan and Thailand. The company is working on to roll out a motorcycle priced at around $ 500 from India The function of the India procurement centre established last year has been transferred and incorporated into the new company – Yamaha Motor R & D India (YMRI) – and will operate as the India integrated development centre.

The company has invested Rs 2 crore for this new centre, it said.

Apart from low-cost models, the company said that the new centre also aims to contribute to India’s operations by ‘change drawings’, tailoring reforms to design, maintenance and production

standards, optimising them to fit the Indian market.

“This will help us not only to develop models and parts for India market, but also to develop models and parts for export markets as well,” Hiroyuki Suzuki, Chief Executive Officer and Managing Director, India Yamaha Motor told reporters.

He said based on the new medium-term plan commencing this year, Yamaha will continue to launch products in the scooter category, while expanding the sales network, and launching the second factory in Chennai by 2014.

The company targets to sell 5 lakh units of two-wheelers by end of this year and aims to reach 1.8 million units by 2016, he added.

“We plan to achieve lowest cost models an d pa rts in the w orld throug h innovative and new development based on responsible analysis (INDRA) activity meant to provide optimised specification through investigation in product lifecycle,” Tos hikazu K obayas hi, Ma n ag in g Direc tor, YMR I sa id .

He said this activity will help the company in reducing the cost yet rolling out products that meet all customer aspirations and market standards.

The company also said it will stick to variants of 150cc motorcycles and 125cc scooters for next dew years for masses.

As and when the market accepts for other categories, the company will also brin g t ho s e m od els for I n d ian consumers from its global portfolio.

Honda CB Trigger launched in India at Rs 67,384 The news of Honda launching a new 150cc streetbike had us expecting the CB150R launched in Thailand few months back. But the motorcycle turned out to be a face lift of the Unicorn.

Honda had launched the CB Dazzler a couple of years ago, which was a differently styled Unicorn. Now comes the CB Trigger which will replace the Dazzler as a jazzy 150cc commuter.

The Trigger's styling may be different, but the bike is mechanically identical to its predecessor. It uses Honda's tried and tested 150cc, air-cooled engine that produces 14PS and 12.5Nm. Claimed

fuel efficiency is 60kmpl.

The Trigger gets Honda's Combi Brake System, a segment first, and Honda claims will reduce braking distances by 32 per cent.

It gets a rear monoshock, but unlike most new 150s it gets a full chain case, a heel-and-toe shifter and a kick starter.

The bike will be sold in three variants.

The base variant gets a 240mm front disc, while other two get a 220mm disc at the rear too. The top variant adds CBS as well.

Prices start from Rs 67,384 ex-Delhi .

Monthly AutoMark Magazine

Policy soon to end ambiguity on auto emission With the aim to fix automotive emission standards till 2025, a governmentappointed committee has been tasked w ith recommending a policy for reducing vehicular emissions, taking i n t o co n s id e ra t io n s u p ply a n d availability of fuels.

The government also wants to end the ambiguity over the two standard norms at play at the moment. Currently, the entire country has vehicles running on Bharat Stage III emission norms except for 15 major metros and state capitals where a higher BS IV norm has been adopted due to limited availability of higher quality fuel in the country.

Honda plays catch-up in India’s motorcycle market Honda Motor Co. is set to release its most affordable commuter motorcycle in India, priced at 43,150 rupees (78,000 yen, or $795), in May. The 110cc Dream Neo will be a key weapon in the company's efforts to regain the top slot in the local motorcycle market, headed by one-time partner Hero MotoCorp.

In fiscal 2012, motorcycle sales in India hit 13.79 million units, making it the world’s second-largest market after China.

Nearly half of the motorcycles sold were equipped with 100-110cc engines and carrying a price tag of around 40,000 rupees. Honda’s products boast high quality, but are relatively expensive.

Honda’s joint venture with Hero, which belongs to a local conglomerate, used to be the market leader. But the joint venture was dissolved in 2011, and Honda fell to fourth place at one point.

In fiscal 2012, Honda climbed back to the second spot behind Hero MotoCorp.

Honda’s share was 18.9 percent, compared with Hero’s 42.9 percent.

“We want to capture the top slot in three to four years,” a senior Honda official said.

In the Indian car market, Honda hopes to increase its scant share with its first model that run s on dies el fu el.

The company released the Amaze, a small sedan, on April 11, and plans to introduce more diesel-engine models.

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International Automotive Industry - Update

Monthly AutoMark Magazine

Changing Rules of the Road for China's Auto Industry Finally, car makers need a change in product strategy. They still offer too many models in a futile attempt to be all things to all consumers. Chery, for instance, offers 10 models but only three sold more than 40,000 units in 2012, and those three accounted for 76% of total sales volume In many areas of the Chinese economy, from refrigerators to computers and banking to consumer goods, domestic players have captured the lion's share of the enormous market. There is only one glaring exception: autos. Even after the government plowed billions into building up domestic champions, Chinese auto makers account for fewer than 30% of the new cars sold in China each year. This week's Shanghai Auto Show is a good time to consider why that is and how local firms can change it.

Chinese auto makers have achieved impressive success, building their 30% market share from virtually zero 15 years ago mainly by delivering relatively inexpensive cars to a large number of first-time car buyers. They also are closing the quality gap with their international peers in surveys such as the J.D. Power and Associates Initial Quality Survey, although a gap still remains.

But their share has remained relatively flat in the past five years. This suggests they already have plucked the lowhanging fruit in the marketplace.

Further success will hinge on their ability to adapt to a more sophisticated auto market.

China is the world's largest car market, and it's growing rapidly. As the market expands, new opportunities also will arise for car makers. They're currently focused almost exclusively on selling new cars. But as the number of cars in circulation increases, consumers will have new needs. For instance, if auto makers can help develop a used-car market, they would boost resale values, encouraging car owners to trade in their

older models for newer ones more often.

However, to capitalize on all this potential, car makers need to navigate around several speed bumps. One is the possibility that Beijing may impose stricter emissions, fuel efficiency and quality standards in response to broader environmental worries. Such a move would require Chinese car makers to develop costlier engines, but without the kind of brand reputation that would allow them to offset the costs with higher car prices.

Today's buyers also seek better customer service both in the showroom and in the dealer's garage after a purchase. Chinese car makers still lag their foreign competitors in providing such aftersales service.

Another competitive threat is that foreign car makers increasingly are muscling into the budget-car segment traditionally dominated by domestic manufacturers. This will accelerate as the foreign companies boost their presence in lower-tier cities where budget buying is more prevalent.

Compounding all of these challenges is the declining profitability of domestic car makers. Although the demand is huge, local firms don't always meet that demand in the most efficient way, and produce too many models that aren't quite right for Chinese auto consumers while being costly to manufacture.

Especially with lower profitability eating into R&D budgets, car makers need to focus on delivering cars consumers want, and only cars consumers want.

One problem has been the strategy of underpricing and overdelivering on starter cars. Almost all China-branded budget cars include expensive features

such as anti-lock braking systems and luxury touches such as leather seats that consumers don't really want at that level anyway. Car makers should invest more heavily in market research to understand their consumers.

Also o n t he th eme of efficien t investment, Chinese car makers need to be more willing to collaborate with other companies, including their competitors.

It's not unheard of for competing car companies in the West to strike deals whereby, say, one offers to the other a license on one technology in exchange for a license to use one of the second company's technologies. China's GAC and Chery recently signed such a threeyear agreement to collaborate on certain R&D projects, but in general domestic firms still are too unwilling to work together with their peers.

Finally, car makers need a change in product strategy. They still offer too many models in a futile attempt to be all things to all consumers. Chery, for instance, offers 10 models but only three sold more than 40,000 units in 2012, and those three accounted for 76% of total sales volume. Focusing on such winners will reduce costs by cutting down on manufacture of cars no one wants to buy, and also enable much higher R&D spending to improve models consumers do want.

China's auto makers have made great strides in a short period of time. But if they hope to compete with international players, even on their own turf, they'll need to rethink how they design, build and market cars. Opportunities abound.

New customers and new businesses are waiting to be created. The market is theirs to lose...

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Chinese Automotive Industry - Update

Monthly AutoMark Magazine

Chinese car makers turn to hybrids China is warming to gasoline-electric hybrid cars as it tackles an addiction to fossil fuels, and local car makers are finally heeding the call and entering a niche ‘green’ market dominated by Japanese rivals such as Toyota Motor Corp.

Some automakers like state-owned SAIC Motor Corp and Brilliance Auto are developing the fuel-saving technology pioneered by Toyota on its Prius model two decades ago, and BYD Co, a Chinese battery and automaker part-owned by a Warren Buffett company, will unveil a “self-developed” gasoline-electric car technology at the Shanghai auto show, the premier industry event in the world’s biggest market, later on Saturday.

Th ro w ing m o re s ubs id ies at conventional hybrids could help kickstart China’s so-called ‘new-energy’ car policy, which has failed to gain traction.

The policy aims to put half a million new-energy vehicles - defined as all-

electric battery vehicles and heavily electrified “near all-electric” plug-in hybrids - on the road by 2015 and 5 million by 2020.

Last year, just 12,791 such vehicles were sold, according to the China Association of Automobile Manufacturers data, and industry experts reckon China has little hope of hitting those objectives unless the government redefines new-energy cars and embraces conventional hybrids a n d o t h e r a lt e r n a t i v e en e r g y technologies.

“After all these years, people now realize that all-electric battery cars are unlikely to become mainstream over the next 10 years,” said Peter Huang, associate director at IHS Automotive.

Expanding subsidies: Looking to wean China off fossil fuels and clean up its polluted air, Beijing has offered generous purchase incentives on new-energy cars in a 3-year program that ended last year.

As it comes to renew the program, which

Scalable Innovation In China Auto Makers’ Next Step?

In China, a significant evolution is taking place in industrial design, carmakers included. Many industry leaders point to the growing trend of leveraging the China car market as a creative base, not only to more effectively target mainland buyers but to export China-led designs under non-Chinese brands.

These themes were self-evident at the r ecent Sh a ng h ai I nte rna tio na l Automobile Industry Exhibition. The show’s tagline, “Innovation for Better L ife ,” u nd ers co red h ow clo sely innovation within the automotive industry is tied to China’s 12th 5-year plan to develop Strategic Emerging Industries (SEIs).

The concept of scalable innovation is

China approves GM's $1.3B plant China has approved U.S. automaker General Motors' plan to build a $1.3 billion plant in Shanghai, the official

nothing new. Yet the auto industry’s promotion of China-based creativity legitimizes the CCP’s investment in growth driven by domestic innovation, rather than production. As Chinese brands struggle in their home market against foreign rivals, a strategic pivot has taken place: scalable innovation for global brands is increasingly driven by China-based joint-venture partnerships.

Localizing research and development (R&D) specifically for the China market n ot o nly me et s go v ern m ent requirements for joint ventures but appears to be a strategic imperative.

Public display of this commitment is particularly critical to maintaining strong relationships with Beijing. media said.

Xinhua News Agency, quoting the automaker, said the plant with a production capacity of 150,000 units would be located in Shanghai's Jinqiao district and construction is expected to

industry insiders expect in the coming weeks, the government is thought likely to increase subsidies for hybrids.

Handouts for those buying hybrid cars “will likely be significantly higher” than they are now, a senior executive at a major state-owned automaker told Reuters. In the previous program, Beijing offered a 3,000 yuan ($490) rebate to drivers buying a new gaselectric hybrid car, way below the 60,000 yuan handouts on all-electric battery cars.

“The government has to change the policy. What has happened is they can’t spend the money budgeted for allelectric cars because few people are buying them. People are not motivated to buy hybrids either as the subsidies are far from enough,” said the stateowned auto company executive, who didn’t want to be named because of the sensitive nature of the matter. reuters begin next month.

GM has been seeking to drive up sales of its Cadillac and other luxury brands in China. The company already is reported to have 15.2 percent of China's automotive market, the world's biggest by sales volume.

"We want to build where we sell. That is very important to us," GM spokesman Alan Adler in Detroit was quoted as saying.

The Los Angeles Times, quoting HIS Automotive Consulting, said automotive sales in China are expected to be about 20.5 million vehicles this year and expanding to more than 30 million by the end of the decade.

"If Cadillac can capture even a small share of that growth, it will be a very large number," said Michael Robinet, IHS' managing director.

"The luxury side of the market has expanded exponentially in China," he said, with Audi being the first to establish a strong foothold in the co un try, follow ed by BM W a nd Mercedes-Benz. Other competitors in the luxury market are Jaguar and Land Rover, he said....

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Toyota International News - Update

Monthly AutoMark Magazine

Toyota to reveal long awaited new Corolla Toyota is preparing to unveil the first all-new, completely redesigned version of the Corolla in many years.

The Corolla is arguably the world's most popular car.

It was introduced in Japan in 1966, coming to the United States two years later. By 2005, Toyota had sold 30 million of them. In the United States, where drivers prefer larger cars, it's the brand's second most popular model after the Camry family sedan.

Toyota (TM) has called the Corolla the world's best-selling car, although Ford (F, Fortune 500), with the Focus, has recently laid claim to that title. The Corolla is sold in over 100 different countries.

Toyota won't say how long it's been since the Corolla has had a "complete redesign." The Corolla has changed in an "evolutionary" fashion over the last several years, Toyota spokesman Maurice Durand said. A complete redesign, generally speaking, means that a car is changed such that it shares few, if any, components with one from the prior model year.

The Corolla is facing challenges. During the month of April, its sales fell behind

those of the recently redesigned Honda Civic and Hyundai Elantra, according to data from Edmunds.com. So the new Corolla may be arriving just in time.

"I think they need to figure out how to add some pizzazz to that car because the competition is just heating up," said Jake Fisher, head of auto testing for Consumer Reports.

The new Corolla, which will be unveiled at an event in California in early June, is expected to be very different from the current model. Two recent Toyota concept cars offer some idea of what the car will look like.

Related - 6 greenest cars made in America The Furia, unveiled at the Detroit Auto Show in January, and the Yundong Shuangqing II, unveiled at the Shanghai Auto Show in April, both have smooth lines and sharp creases that make them

Toyota Prius Continues To Trounce Honda's Insight In Global Hybrid Sales The Toyota Prius has come a long way since hitting the market over a decade ago.

Back then, at the turn of the 21st century, it was no more than a fuel efficient but ultimately unappealing curio, bought only by a select few.

Fast-track to 2012 and it was one of the world's highest-selling cars, with 389,932 units hitting the streets globally. That's impressive by anyone's standards, but it must have rival Honda wondering exactly how it could have got its Insight so wrong.

The Insight is by no means a bad car, but its 22,440 global sales in 2012 is just one seventeenth the number of Prius sold the same year.

Look into the numbers further, via the Best Selling Cars Blog, and the statistics are even more galling. Insight sales were little over a third that of the Lexus CT

200h, which made over 63,000 units in 2012. Luxury hybrids don't sell anything lik e tha t of their more h umble counterparts but Toyota must be pleased with the Prius-based CT. Other versions of the Prius dominated the hybrid sales totals too. The Toyota Prius C (and Aqua, as it's badged internationally) sold 313,437 units in 2012. The Prius V (also known as the Prius A, and Prius+) shifted 184,838 units.

At the other end of the scale, one Toyota product didn't do so well: The Lexus HS 250h.

While the HS slithered off sale in the U.S. in 2012 due to poor sales, it's still on sale elsewhere. It seems the HS isn't overly popular internationally either, with just 5,727 sold last year. Its Toyota cousin, the Sai (not sold in the U.S.) did a little better at 8,543.

look almost as if their bodies were made from fabric tightly stretched over a framework.

Even as competitors have launched alln ew co mpact m odels with more advanced technologies, the Corolla has continued to be the best-selling compact car in the U.S. so far this year.

Although new cars and redesigns usually spur sales, there are benefits to the being old, pointed out Jessica Caldwell, an analyst with the automotive Web site Edmunds.com. Toyota's lack of heavy engineering investment in the current car has allowed Toyota to sell Corollas cheaply. The Corolla still has a fourspeed automatic transmission where some competitors offer six-speed transmissions, for example.

Many buyers like the familiarity of the car, Caldwell said.

"Corolla is a name that I know, I can trust, it's proven itself," car shoppers think, according to Caldwell.

Toyota profit triples Toyota on said its full-year net profit more than tripled to $9.7bn, with a weak yen and cost-cutting helping inflate the bottom line for the world`s biggest automaker.

The Japanese giant also said it was on track for another soaring profit in the current fiscal year, underscoring the recovery among the nation`s major automakers after the 2011 quaketsunami disaster devastated sales and production, and highlighting strong demand in the key Asian and the US markets.

Toyota`s sales in the world`s biggest vehicle market China which have been dented in the wake of a territorial dispute between Tokyo and Beijing were recovering, it added.

The yen, which has lost about one-fifth of its value on th e dollar since November, has helped boost Japanese firms` competitiveness overseas and jacked up the value of their repatriated foreign income.-AFP

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Monthly AutoMark Magazine

Enery Sector - Update

PSO profits after tax increase by 3.8pc The Board of Management of Pakistan State Oil (PSO) convened at PSO House to review the company’s performance for the first nine months of FY13 from July, 2012 to March, 2013. The meeting was chaired by Ahsan Bashir and members in attendance were Dr. Mirza Ikhtiar Baig, Mohammad Naeem Malik, Malik Naseem Hussain Lawbar, Raja Hameed Ahmed Saleem, Muhammad Azam and Naeem Y. Mir-CEO & MD, PSO. In the period under review, PSO’s revenues rose to Rs 930 billion as compared to Rs 862 billion in the correspo nd in g p erio d la st yea r, representing a growth of 7.8 per cent.

After tax earnings also witnessed significant improvement and increased to Rs 9.31 billion in the period under review in comparison to Rs 8.97 billion during the corresponding period last year representing an increase of 3.8 per cent.

During this time period, industry volumes for Black Oil remained stable wh ile W hite O il grew by 1 per centreflecting an increase in Mogas consumption of 16 per cent. PSO’s share of the MOGAS segment also grew to 50.9 per cent in comparison to 49.6 per cent while the HSD market share increased to 57.6 per centagainst 54.8

per cent last year. Once again, your company also continued to hold onto the lions share of the market with its share in the White Oil segment growing to 56.0 per cent of the overall market while its share in the Black Oil segment stood at 74.7 per cen t, th ereby contributing to a total market share of 64.3 per cent.

Recently, in April PSO has taken further steps along the path of becoming an integrated energy company and building a self-reliant energy chain by signing various strategic agreements. This has included signing a MoU with Engro PowerGen Limited (EPL) to review the technical and economical feasibility of the Thar coal project.

Additionally a second MoU has been signed with the Government of Khyber Pakht unk hwa (GoK P) f or th e establishment of a state-of-the-art oil refinery with a capacity of 40,000 barrels per day in District Kohat - KP. PSO has also initiated a number of new and innovative marketing projects to project its image. With this in mind, the Company has inaugurated the first of its kind Diesel Square in Karachi and plans to replicate this project in multiple cities nationwide. Another first for PSO has been the inauguration of the world’s first Community Owned Stations in

Gujrat which shall help bring about a social revolution at a grass roots level by distributing the station’s profit among st local area stakeholders.

At the meeting, the Board appreciated the Company management’s efforts on behalf of the shareholders as well as the employees and the general public. At the same time, the Board expressed increasing concern over the balance of receivables, including price differential claims, which stood at over Rs142.8 billion as on March 31, 2013. They observed that the financial costs of this debt coupled with the continuously increasing receivables from the power sector continued to hurt the overall profitability of the company and directed efforts to be made to reduce the impact of the burdening financial costs through con stant pursuit for recovery of receivables from the power sector entities as well as from the Government of Pakistan. Keeping in view the financial constraints the Board did not approve any dividends for the period under review.

The Company management thanked the members of the BoM for their direction and pledged to act on their instructions fo r t h e fu t u r e be n e fi t o f t h e shareholders.-PR

Eni announces new gas discovery onshore Pakistan Eni has made a new gas discovery in the Sukhpur Block located in the Kirthar Foldbelt, onshore Pakistan, 270 kilometers north of Karachi, Sindh Province.

The Lundali-1 NFW exploratory well, which led to the discovery, was drilled to a total depth of 2,660 meters and encountered gas bearing sands in the Paleocene sequence. During production testing, the well produced gas flowing up to a rate of 33 million standard cubic feet per day, highlighting the excellent deliv era bility of t he res ervoir.

In accordance with Eni’s strategy of accelerating the Time to Market, this

discovery will be commercialized through an early production scheme, which will result in first gas only three years after the award of the Block.

This new discovery marks another success in Eni’s near field exploration strategy in the country. The additional production at Lundali will allow the optimization of the existing Eni’s infrastructure including the Bhit gas processing facility located 30 kilometers to the west of the Block, thus maximizing synergies. This result confirms the significant exploration potential of the Sukhpur Block where the Joint Venture plans to drill another exploration well

within next twelve months.

Eni, through its subsidiary Eni Pakistan Limited, is the operator of the Sukhpur Block with a 45% working interest, which was awarded on February 2010 in a competitive bidding round. The other Joint Venture partners are PPL (30%) and KUFPEC (25%).

Eni has been present in Pakistan since 2000 and is the largest oil and gas producer among the foreign companies operating in the country. In 2012, the co m p a n y ’s h yd r oc a rb o n e qu it y production averaged approximately 57,000 barrels of oil equivalent per day.

Source: Eni

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Subscription Form Monthly Automotive Magazine

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April-2013

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Corporate Sector - Update

Monthly AutoMark Magazine

Gardner Denver Recognizes Rastgar & Co as "The Vendor of the Year" Rastgar & Co were recognized as the Best Distributor of the Year for the AMEA Markets by Gardner Denver, promoting the CompAir ra n ge o f Comp ress ors an d Equipm ent s in P akis tan .

The award came as result of assessment based on customer service, spare parts availability, depth of service (going up to air end service), sales volume, market penetration, customer training and several other factors.

The Award was given at a ceremony at the end of the CompAir Distributors' Conference AMEA, held on 30 April-1st May, 2013, at the Westin Hotel, Dubai.

CompAir is a premier Gardner Denver Brand and is a front runner in Pakistan market owing to the customer service, training and ready availability of compressors and parts provided by Rastgar & Co for the last 32 years.....

Maqsood Zulfqar, CEO, Rastgar & Co, receiving award from Mr. Colin Mander, Director, AMEA, Gardner Denver

Memon Motor Participates in 6th All Pakistan Memon Federation Exhibition at Karachi Expo

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Exclusive Article by Shahzad Tabish

Monthly AutoMark Magazine

Sneak Peek into the Simplified Euro 2 Technology of 70cc Motorbike The secret to this lies in the simplicity of the design incorporated in the motorbikes. Named the Air Suction Valve or the Pulsed Air Valve, it is an old technology which was introduced in the 1970’s.

Since the beginning of times, a two w heeler is co ns idered to be a n eco nom ical mea ns of hu ma n transportation however when we look at the recent past of our country, the hiking four wheeler prices coupled with the incremental maintenance costs & re g ula r u n av a ila bilit y o f C NG ; considered to be the bases of Pakistan’s automotive fuel has made car a lavish luxury for the upper middle class of our society which in turn has left no option for the masses but to allocate funds for a two wheeler in order to cater their transportation needs.

This whole scenario has resulted a surge; massive one in fact in the motorbike production industry. Particularly the 70cc; broke the records of production; from under million units produced per annum to hiking over a million & a half.

In this regard the contribution of Chinese based OEM’s is commendable as their contribution for the motorbike production is significant, constituting over 56% market share out of the total population produced. This is mainly due to the significantly reduced price at which the motorbike is made available to the masses as compared to their Japanese rivals.

Due to the origination of numerous Chinese based OEM’s the competition in between them also grew to become the market leader in production amongst their class. This surely couldn’t be achieved by competing for price as the profit margins had already been on a shoestring for all of the manufacturers.

This led to a healthy competition based on co mpeting on differentiation amongst all the manufacturers, the design remained almost unchanged but a few add-ons like the shift indicator, digital speedometers, styled headlamps & indicator lamps etc. were offered by

few in order to attract the consumer market towards their brand.

Very recently when the government im p lem en t ed P AK -2 ( Pa k is t an i equivalen t of EURO -2) emission standards for all four wheelers, a necessity was felt amongst the two wheeler industry to adopt them as well.

One of the major initiatives was taken

by Japanese & an Italian based OEM to introduce Euro 2 technology firstly in its prime 125cc category then in the 70cc category. Chinese manufacturers already had to respond & yet needed to continue their legacy of cost effectiveness, finally very recently we can now witness that all the new Chinese OEM based 70cc’s

are equipped with Euro 2 technology while only a very marginal increment in the actual price was observed. So an instantaneous question comes to our mind that how Shahzad Tahish it is pos sible to incorporate a techn ology havin g negligible price to be paid by the customer? Let us now unravel the myth of the technology itself.

For those who are yet unaware of the EURO stan dards for emissions it basically defines the number o f pollutants constituting a mix of NOx, CO,? CO?_2 & HC emissions coming out of the tailpipe of a vehicle. If the engine produces fewer pollutants it gets a higher rating of EURO standards.

Typically Carbon dioxide is a byproduct of combustion reaction & thus cannot be eliminated & is a part of natural eco system so is not considered to be that harmful as compared to the NOx & Carbon mon oxide both of w hich contribute to cause Lung cancer. In order to achieve the EURO 2 or the PAK 2 standards imposed, cars typically need to utilize EF-i systems coupled with catalytic converters in order to reduce th e a mou n t of p olluta nt s. Th is transformation requires major technical changes & hence increases the cost of the product, but this is not the case when we consider the case of a standard 70cc motorbike.

The secret to this lies in the simplicity of the design incorporated in the motorbikes. Named the Air Suction Valve or the Pulsed Air Valve, it is an old technology which was introduced in the 1970’s. The principle of this technology is simple, i.e. to introduce

www.automark.pk | May-2013 | Page 40

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Monthly AutoMark Magazine

Automotive Sector - Update

Sazgar to start motorcycle production Sazgar Engineering Works Limited (S A ZE W ) h a s d e ci d ed t o a dd motorcycles to its existing product line to diversify the revenue base amid tepid demand outlook for auto rickshaws due to shortage of Compressed Natural Gas (CNG).

In a letter SAZEW Company Secretary Ars ha d Mah moo d sa id t hat th e management of the company has decided to manufacture and assemble motorcycles of all sorts and kinds by utilising the idle capacity of company’s auto rickshaws manufacturing facilities with some addition of machinery and building necessarily required for this purpose.

Management of SAZEW has undertaken a project to add a production capacity of 30,000 motorcycles with minor modifications to its existing auto rickshaws assembly line.

With minute modification to its assembly line, SAZEW will be able to add a production capacity of 30,000 motorcycles, complementing its ability to produce 12,000 auto rickshaws.

The production capacity of auto ricks ha ws an d moto rcycles ma y interchangeably be used in accordance with the demand of the products,

Mahmood added.

However, demand for Sazgar auto rickshaws plunged by a massive 86 percent on yearly basis to 7,017 units during nine months of FY 2012-13.

Moreover, amid severe gas shortage that has worsened CNG load shedding, demand for CNG auto rickshaws has contracted by 17 percent on yearly basis to 26,027 units during nine months of current financial year.

SAZEW is a leading manufacturer of four-stroke auto rickshaws and wheel rims with its main facility located in Lahore.

An analyst at Habib Metropolitan Financial Services said that addition of motorcycles would enable the company to recapture the revenue lost to tepid auto rickshaw demand and bring bottom line recovery. SAZEW is to capitalise on its established brand name to penetrate

air to the exhaust gases in order to oxidize them in order to convert Carbon Monoxide to Carbon Dioxide as well as oxidize the unburned fuel exiting the combustion chamber. This oxidation is only possible when fresh air contacts the exhaust gases, so in the early stages of its development a separate pump was used to force the air into the exhaust manifold to interact with the exiting gases of the combustion chamber.

However, the pump requires additional power to run & definitely requires maintenance, so in order to simplify this s ys tem a si mp le as s emb ly w as introduced relying on the pulsating vacuum generated in the exhaust manifold as the combusted gases escape the exhaust manifold. This pulsation is basically due to the execution of Otto cycle & the diffuser shaped exhaust manifold becomes the bases of the pressure fluctuation.

All the technical aspect seems to mingle up so let us simplify the concept. In order to understand the system we may assume it to be like a simple junction consisting of three passages. One enters the intake manifold, the second into the exhaust & third into the air cleaner housing. At the junction we have a diaphragm operated one way valve also known as reed valve. As soon as the throttle opens, the vacuum in the intake manifold causes the valve to open enabling the fresh air to enter the exhaust manifold due to the existing pressure difference as discussed earlier.

The air enters oxidizing the exhaust gases only when the reed valve opens, hence preventing the flow of exhaust gas es back into the air cleaner.

The simplicity of this assembly coupled with its effectiveness has the secret of simplicity which has enabled it to be incorporated without the necessity of

into a segment that is already cluttered with numerous players and cut throat competition, he added.

According to an analyst, SAZEW would also have an advantage of utilising its existing dealership network chiefly located in Lahore, Hyderabad and Karachi. The company plans to produce all th e v arian t s in clud in g 70c c motorcycles, which constitute largest chunk in the industry.

Althoug h subject to En gin eering Development Board (EDB) certification, localisation level is expected to be on higher side lowering exposure to exchange rate risk with only integral components for instance engine and gear box are to be imported, said the analyst.

The analyst said that management plans to start the production from first quarter of fiscal year 2014. He conservatively assumed capacity utilisation to stand at 50 percent like approximately 15,000 units to be sold in the first year of production with 70cc being the 4/5th of the total volume.

Since pricing is yet to be determined, operating margins would be hard to ascertain at this stage, he added….

extravagant investment from the OEM, hence reducing the cost of innovation; which surely results in satisfying government standards while bringing something new for the consumer market; a Win-Win situation for sure.

The aspects explained in this article may have been very prolonged forcing the reader to get bored to death, however the necessity to explain the technology was felt once the fact was realized that the local mechanics were mistakenly naming this new mechanism a ‘Turbo’ which is absurd for sure.

In order to eliminate this state of confusion amongst the educated, the technology has been simplified & explained in this article. Cheers!

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Car / Light Vehicle Price List

SUZUKI

HONDA

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

Price Price Rs. 595,000 Rs. 652,000 Rs. 1,171,000 Rs. 1,386,000 Rs. 1,366,000 Rs. 1,005,000 Rs. 1,452,000 Rs. 1,531,000 Rs. 674,000 Rs. 650,000 Rs. 2,199,000 Rs. 2,274,000 Rs. 2,124,000 Rs. 2,273,000

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

TOYOTA COROLLA

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

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

MASTER MOTORS DAIHATSU

Model Model

Price

Price

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

Price Rs. 7,517,000 Rs. 7,017,000 Rs. 1,507,000 Rs. 1,648,000 Rs. 1,982,000 Rs. 2,212,000 Rs. 2,102,000 Rs. 2,332,000

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

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

Toyota Avanza (Up Specfication)

Rs. 2,160,000

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

Hilux Pickup 4x sc Model

Price

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

Rs. 1,763,500

Hilux Pickup 4x4 D/C Model

Price

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

TOYOTA VIGO DAIHATSU Model Model

Price Price

Rs. 2,878,500

LAND ROVER Model

Price

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

STATION WAGON 90 Rs. 3,560,000

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

(N/A)

Price updated Feb- 2013

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

Monthly AutoMark Magazine

Delivering Stellar Customer Service Transforming Complaints into Compliments We’re told time and time again that “the customer is always right” although we know that’s not true. However, when it comes to some customers, there are ways to turn complainers into happy campers.

“The customer is always right.”This statement might serve as a business philosophy, but this catchy albeit clichéd phrase should never serve as the foundation for a business model. Let’s be frank: sometimes certain customers are never right, but they are still your customers.

Even so, we don’t always have the luxury of being brutally honest with our clients by telling them they’re dead wrong. After all, it’s always a prudent business strategy to embrace positive customer relations.

A customer should be treated politely and fairly and with dignity and respect – even when he’s wrong. At the end of the day, customers pay the bills and bankroll our salaries.

Without customers, we’re nothing.

However, it is satisfied customers that are so vital for success. Unhappy clients can hurt a business by simply going elsewhere for their automotive repairs and maintenance needs.

Being in the automotive service business, you require many different talents, a keen sense of discretion being one of them. When you’re dealing with an g r y a n d d iffic u lt cu s t om er s, sometimes you need to be both judge and jury. Often, you don’t have the luxury of making a wrong verdict given

the impact on your business.

So it is that wh en com pla in ing customers pay a visit, you have to act as a benevolent referee. Your first step is to determine whether the problem is real or imagined. Discovering the truth ca n be d iffic ul t, bu t it ’s yo u r responsibility to thoroughly and fairly investigate the situation. It’s a best practice to involve your customers in the resolution process by test-driving their cars with them to determine the root cause of a problem. Consider these real-life case studies that show how an angry customer complaint can be transformed into a genuine compliment (as well as an additional revenue-earning opportunity.)

1. Every customer concern brings with it a learning opportunity. As a customer relations manager, I often come across situations where the customer truly believes he’s right based o n h is o w n o b s e rv a t i o n s a n d perceptions.

Case in point: recently, a distressed customer came back to the shop with an oil leak complaint after service. I apologized for the inconvenience and thanked him for bringing the issue to my attention. However, the oil was leaking from the transmission pan seal/gasket – not from the engine oil filter or drain plug after the oil change.

I therefore recommended replacing the transmission pan gasket to avoid an

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By Mohammad Shahzad S.A.E; D.M.P expensive transmission breakdown. The customer appreciated this advice, approved the repair, and expressed satisfaction with our effective resolution process. In return we earned his loyalty a n d tru s t (be tt er to re pla ce a transmission pan gasket than an entire transmission) and he has since returned for additional services.

2. Awhile back, an angry customer approached me about a brake noise issue after we performed wheel balancing on her vehicle. I took the car for a road test with her in the passenger seat and I soon discovered the noise was due to ABS activation on slippery roads. The customer knew nothing about ABS (she had recently purchased the car as a used model.) I went on to explain the safety function of the anti-lock brake system.

In doing so, I regained her trust. From angry to appreciative, she was grateful for my ABS tutorial and is now a regular customer as well.

3. An upset customer stated that the right front tire was free-spinning while making a left turn at a particular int ers ect io n (we h ad previously performed a four wheel alignment on his car.) I took the car for a road test on the same high-traffic location to find out the root cause. That area is very busy for left turn traffic and due to the long wait, most older cars leak oil on that spot. This results in a slippery surface condition. Since the front right wheel has more torque and traction on frontwheel drive cars, the right front tire would spin on the same oily spot due to rapid acceleration. I explained the situation to the customer. He was grateful for the tutorial, and again, we now have a new loyal customer.

All of the above scenarios have one thing in common: the customer believed he or she was right to be angry. But instead of getting into a confrontation, the problems were resolved in a way that was mutually satisfactory – and, more importantly, the customer was fully involved in the resolution process. Proof positive that corrective measures can turn complaints to compliments.

It takes an effort, however. Sometimes one’s ego can be his worst enemy when coming to grips with truly legitimate problems. O ccas ion ally we st op listening, and as a result, we might fail to act in time. The result: a customer service “issue” transforms into a nonrepairable customer service “disaster.”

Notably, a good business is one that

employs those who are both responsive and responsible. Never commit the cardinal sin of Marketing 101: overpromise and under-deliver. As well, it only makes for good business sense to develop and follow a standardized co mpa n y po lic y relat ing t o car inspection, repair procedures, customer relations and promotional messages.

And ensure you have such a policy in writing. Make certain it’s consistent, and demand that all technicians and advisors follow it. Having such a code of conduct will help verify and resolve customer concerns, especially if a particular staff member is off duty or no longer with the company. There’s nothing more embarrassing or unprofessional than having employees on duty who aren’t familiar with the shop’s internal policies and procedures.

The variety of a customer’s concern can be limitless.

Maybe the repair wasn’t properly carried out; perhaps an employee was rude. Or maybe the concern is based on something completely irrational – i.e., perhaps the customer didn’t like the colour of your skin. Criticism can be about anything or anyone and if you’re going to succeed in the automotive business, you’ll have to master the art of customer service excellence.

Granted, sometimes we run into the “customer from Hell.” You know the

Monthly AutoMark Magazine type: the person who goes out of his way to manufacture problems. He might have a temper tantrum in your shop or kick your counter or be verbally (or even physically) abusive. Alas, sometimes it is simply not worth earning such a customer’s loyalty. You will have to “fire” that customer.

Put another way, an average good auto customer satisfaction is around 97%.

Unfortunately, that means there’s about 3% of customers you’ll never be able to satisfy. They’ll take and take until you have nothing left to give. When this moment arrives, I hope you’ll have the courage to make the right decision and say goodbye to that customer. It is far more effective in the long run to give your 100% attention to the lion’s share of your loyal customers than constantly chasing after the 3% that will never be satisfied.

But make no mistake: if a customer is undeniably right about his concern, there’s simply no room for negotiation.

The situation has to be rectified and resolved; you have to ensure the customer mus t leave completely satisfied.

Incidentally, you do have some “skin in the game” when it comes to client retention. It costs six times as much to attract a new customer than it does to keep an old one.

Customer satisfaction surveys reveal that 95% of complaining customers will do business with you again – If you quickly and fairly resolve their complaints.

Bottom line: maintaining an excellent level of customer service isn’t easy. And it takes some effort to transform. But the rewards are worth the effort....

This exclusive article on ‘Transforming C o mp la i n t s in t o Co m p li m en t s ’ has been written by Mohammad Shahzad S.A.E., D.M.P. specially for M o n t h ly A u t o M a r k M a g a z i n e .

(Auto motive Eng in eer/Doctor of Motors) He is a Senior Group Manager for Customer Management Operations with The Brimell Group, Brimell Toyota and Brimell Scion in Toronto, Canada.

Free advice for Automark readers; please do not hesitate to contact him at shah@br im elltoyota.c om or automarkpk@gmail.com

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Upcoming Event - Press Release

PAKISTANI STUDENTS GEAR UP FOR SHELL ECO-MARATHON ASIA 2013 Karachi – May 10, 2013: Thirteen student teams from Pakistan’s top universities are preparing ultra energy-efficient vehicles for Shell’s annual super-mileage competition, the Eco-marathon.

The competition will be held from July 4-7, 2013 in Kuala Lumpur, Malaysia where over 1,000 students from 16 countries in Asia and the Middle East will come together for the fourth time on the Formula One circuit at Sepang.

To showcase the progress the teams have made on their vehicles before the competition, Shell Pakistan Limited is organising a launch event at NUST campus in Rawalpindi. Participating teams will test their cars on May 18, 2013 under the supervision of technical and safety experts, and will take the track on May 19, 2013.

In an effort to motivate the students to go beyond the competition, Shell Pakistan will be giving out special awards to Pakistan teams during the launch event. Awards will be given to teams who have built their vehicles around Shell’s high safety standards, have turned innovative ideas into reality and which have kept achieving a sustainable future of energy in mind. A panel of judges from academia, industry and the government will be viewing the vehicles at the launch event and awarding the best performers in these categories. The event will be followed by a press conference and award ceremony.

“Shell Eco-marathon brings together young and brilliant minds, who will be this country’s future leaders,” said Omar Sheikh, Chairman of Shell companies in Pakistan. Shell Eco-marathon provides a platform for students to push the boundaries of fuelefficiency that are part of Shell’s innovative approach to help tackle the challenges of the new energy future.

Using the experience gained at Eco-marathon events over the last 4 years, students from Pakistan continue to develop fuelefficient vehicles that could one day be part of the solution to global energy challenges.

About Shell Eco-marathon The Eco-marathon is a super-mileage challenge, created by Shell, designed to inspire student innovation and develop future technologies that represent game-changing fuel efficiency and transportation performance. Participants are challenged to design, build, and test vehicles to go the farthest distance using the least amount of energy. This year, about 150 student teams from 16 countries all over Asia will hit the tracks of the Sepang International Circuit with their “Prototype” and “Urban Concept” category vehicles.

The Prototype category invites student teams to enter futuristic cars – streamlined vehicles focused on maximising fuel-efficiency through innovative design elements, such as drag reduction.

The UrbanConcept category focuses on more “roadworthy” fuelefficient vehicles. Aimed at meeting the real-life needs of drivers, these vehicles are closer in appearance to the higher-mileage cars seen on roads today.

For both Prototype and UrbanConcept categories, teams may enter vehicles using any of the following eight energy types: hydrogen (fuel cell), solar, battery electric, gasoline, diesel, Shell Gas to Liquids (GTL), Fatty acid methyl ester (FAME) and Ethanol E100.

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MADE IN PAKISTAN MOTORCYCLES RETAIL PRICE LIST

70cc Motorcycle

Sr./ No. 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

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

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

Sr./ No. 24.

25.

26.

27.

28.

29.

30.

31.

32.

33.

34.

35.

36.

37.

38.

39.

40.

41.

42.

43.

44.

45.

46.

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

www.automark.pk | May-2013 | Page 46

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

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MADE IN PAKISTAN MOTORCYCLES RETAIL PRICE LIST

125cc Motorcycle No. Brand & Model Name 1. Super Star SS-125 2. Super Star SS-125 DLX 3. Honda CG-125 std Euro II 4. Honda CG-125 DX 5. Metro MR-125

Retail Price Rs. 59,000/= Rs. 67,000/= Rs. 98,500/= Rs. 118,000/= Rs. 65,000/=

DYL Motorcycles Sr./ Product & No. Model Name 1. YD100 Mini 2. Janoon 100cc

Retail Price Rs. 64,900/= Rs. 78,600/=

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 & Model Name No. 1. Sprinter ECO 110cc 2. Sprinter STD 110cc 3. Suzuki GS-150 4. Suzuki Raider 110cc

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

Retail Price Rs. 77,400/= Rs. 80,400/= Rs. 101,500/= Rs. 85,400/=

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Exclusive Article by Razi Nayyer

Monthly AutoMark Magazine

THINK SMALL The Need of Smart Cars in Pakistan Today, there are a growing number of independent thinkers opting for small, nimble cars. The eco-friendly souls among them also point out that their choice makes for more space on the road, less pollution in the atmosphere and, of course, more parking opportunities in limited nooks and crannies and more money in the pocket.

The memory still delights, when I recall a full-page advertisement in a British newspaper showing a bird’s eye view of a party held at a sprawling, stately mansion. Spread around an ornate gate, in neat, orderly rows were a sumptuous lot of luxury sedans and among them, one glaring exception-a cheeky little Volks Wagen boldly defying tradition.

The slogan read: In these circumstances, w h a t is n ot i ce d m or e t ha n consumption?

So, the message goes all the way back to Beetle’s spectacular popularity in the 1960s. More recently, Buick has advertised its Park Avenue Sedan as being so unassuming; your friend will never know how well you’ve done in the market. The argument focuses on the power of understatement and common sense. The power of thinking small.

How insightful and relevant that argument is today in growing and expanding urban Pakistan. “Thinking Small” is not only being considered as s ma rt but h ig hly pra ctical too , particularly when one witnesses an avalanche of big, beefy sedans and threaten ing off-roaders speeding menacingly on high-ways or clogging up intersections in the city. No wonder, more and more motorists are embracing the logic of what has truly become in the fitness of things.”Thinking Small’ shall be vital in a world where the number of cars is ever increasing.

As one small car advocate fervently proposes, beyond genuine considerations of protocol, status occupational necessity, or sheer load of usual occupants, there is no rational need for driving large vehicles.

superior being, he cites the new reality: the view that you are what you drive is no longer true. The famous American millionaire had observed the lifestyles of his fellow millionaires, closely. In the book he subsequently wrote, he presents some eye-openers:

• 37 percent millionaires buy used cars • Millionaires usually drive around in cars tha t a re three years ol d • Some millionaires even drive pickups.

Today, there are a growing number of independent thinkers opting for small, nimble cars. The eco-friendly souls among them also point out that their choice makes for more space on the road, less pollution in the atmosphere

an d, o f c o u rs e , m o re p a rk in g opportunities in limited nooks and crannies and more money in the pocket.

Not to mention less arrogance in the air , Most compact such as the Mini, Beetle and Clio boast a tradition of ownership, by individuals widely dispersed along the length and breadth of the social strata – from royalty to Wall Street luminaries, show biz personalities and, of course, ordinary folks like us.

Indeed, the shift to “small” has been apparent for quite some time, especially within the past decade. Needless to say, world auto manufacturers have rushed to capitalize on this emerging new preference, with the result that, in addition to small car specialists like Fiat, Volks Wagon, Suzuki, Daihatsu, Peugeot and Renault, others such as the likes of Mercedes Benz, Audi, BMW and Ford are focusing on this niche very seriously, too and why not? Isn’t that where the future is headed?

And here’s the good news: the motorist is the greatest beneficiary of it all to understand it, one has to take a closer look at today’s small car. In addition to its undisputed ease of handling and lower cost of ownership, the small car has improved dramatically, in every aspect previously attributed only to larger cars: • Space--- Thanks to computer-aided design application, small car cabins are noticeably commodious and generally found to be of a class above,within a remarkably short exterior, they offer comfort to all passengers, including those seated at the back.

• St yling--- n ew styling trends, constantly refined by Italian design houses, are not only pleasing to the eye but quick on the take, too. New

To those guided by the perception that owning a big car makes one appear a

www.automark.pk | May-2013 | Page 48

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