May-2014 edition Volume 07, Issue 5
Pakistan’s premier magazine on automotive, engineering & energy sector
Monthly
AUTOMARK International Editor-in-chief Muhammed Hanif Memon Technical Editor Muhammad Shahzad
Advertising Manager Tahir Siddiqui
Circulation Manager Abdul Khaliq
Graphic Designer Salman Hanif
Web Master Murtaza Hanif
CONTRIBUTING IN THIS ISSUE
Imtiaz Rastgar CEO, Rastgar Group & CBI External Expert, Ex-chairman EDB Islamabad J. Pereira Genera Manager Customer Support Division Al-Haj Faw Motors (Pvt) Ltd. Karachi Muhammad Yousuf Shaikh Founder & Chairman Pakistan China Motorcycle Industry Council Karachi
M. Yousuf Shaikh Ali Hassan M. Owais Khan
Syed Mansoor Rizvi Principal Officer M/s. CNH Services (Pvt) Ltd. Karachi
Advisors Engr. IHT Farooqui GM Plant P.M. Auto Industries Hyderabad
Mr. Ashfaq Memon Senior Manager Marketing Memon Motors (Pvt) Ltd. Maker of Super Star Motorcycles Hyderabad
Postal Address Active Communications D-68, Block-9, Clifton,Karachi Tel : 021-32218526 Mobile: 0321-2203815 E-mail: automarkpk@gmail.com website: www.automark.pk
AutoMark Canada Office Managing Editor Mohammad Shahzad S.A.E. D.M.P. 41 Jordana Drive Markham (Toronto) Canada L3S 3N8 Phone: 905-472-8282 Email: automarkcanada@gmail.com AutoMark REGD: MC-1330 Published every month by M. Hanif Memon The views expressed by contributing writers and comments do not necessarily reflect the views and policies of the Monthly AutoMark magazine's management
The trade and industry demands single digit GST The Trade and Industry have emphasized upon the much needed reforms in taxation culture by reducing the General Sales Tax regime to a Single Digit to change the business history in Pakistan. Federation of Pakistan Chambers of Commerce and Industry (FPCCI) demands for reform in existing Sales tax regime emphasized reduction of sales tax to single digit in the upcoming federal budget for the fiscal year 2014-15. Thi s yea r FP CC I i s f or m ul at ing recommendations for the Federal Budget which is history in the making. FPCCI demands reduction in sales tax to single digit (non-refundable, non-adjustable at import and manufacturing stage) in Pakistan. This proposed single digit sales tax will eliminate malpractices in refund claims and input tax which will reduce cost to the exchequer. The FPCCI is strategically working on the single rate of Sales Tax and expect the FBR to join hands in working to achieve this goal which will lead in the generation of Rs.1500 billion in the next financial year 2014-15. The main advantage of reducing sales tax to single digit will be giving relief to the common man especially to the low and middle income group by reducing the inflation. Lower rate of Sales Tax will increase the revenue for the Government and discourage the corrupt and malpractices in input and adjustment. It will give industry a breathing space against the menace of smuggling which is wide spread in the country. The simple procedures in sales tax will give the Government an opportunity to work more efficiently within the Sales Tax department. Most of the proposals for incorporation in the Federal Budget are related to this important segment which is a pre-requisite for survival and expansion of Industry. It is demanded, for such incentives that could not only transform the existing infrastructure into an efficient network but also bring radical changes in the Society through improved socio-economic indicators. FPCCI team is working on Shadow Budget which will be presented to the Finance Ministry and the FBR team shortly which will be a revolution in the history of Trade and Industry of Pakistan....
CONTENTS
Monthly AutoMark International May-2014 Government to facilitate used car buyers Exclusive Article by Owais Khan
12-13
BUDGET PROPOSAL-2014-15 APMA urges government to encourage SMEs bike assemblers Exclusive Article by Ali Hassan
14-17
FBR reviews number of concessionary SROs Industry news update
18
Setting up CNG industry was a wrong decision, says minister Industry news update
19
Bus plant operating at record low level of 3%
21
Road Prince Motorcycles - Future is here Exclusive review by Faisal Mufti
22-23
SUZUKI Wagon R debuts in Pakistan Exclusive Article by Owais Khan
24-25
Automechanika Istanbul 2014 Review by AM
26&31
The Patriot Prime Minister Mian Muhammad Nawaz Sharif, The last hope For Pakistan Exclusive Article by M. Yousuf Shaikh
32-35
International Automotive News - Update
36-37
Motorcycle Market Price List
38
Car/Vehicles Market Price List
39
PAMA fights for hybrid car import Exclusive Article by Owais Khan
42-43
visit: www.automark.pk
Cover Story
This news has created only doubts over its credibility and authenticity as no minister or official was directly quoted on used car import duty cut. As the import duty cut story ran in almost all leading newspapers which means that some thing has definitely cooked in favor of used car lobby but against the local industry.
by Owais Khan
T
he government has finally realized the demand of used car lobby as it plans to cut customs duty on import of up to three-year-old automobiles of various engine capacity under various schemes. This step will resolve the problems of limited options available in small cars segments which the consumers have been witnessing after the elimination of locally assembled Suzuki Alto, Daihatsu Cuore an d Hyundai Santro from the markets. Used cars up to three years old used to cost more due to high value of vehicles and cut in depreciation limit. Perhaps the government feels that the revenue crunch can only be met through high volume of imports of used cars after cut in duties and taxes. This decision may play havoc with the
local industry especially for Pak Suzuki whose Mehran 800cc and Swift sales have already been struggling due to presence of variety of imported used cars. However, the overall decision of cutting duties on used car imports is definitely a pre-budget shock for the local assemblers. The cartel of local assemblers must have expedited their efforts in Islamabad to put on hold this decision at any cost as it will erode their market share. Despite cut in duties, much will depend on the rates of used cars prevailing in Japan and exchange rate parity. The auto assemblers have always blamed the used car importers and dealers for not reducing the car prices when the rupee appreciates against the Yen and Dollar. The importers’ lobby has never reduced the rate on rising rupee strength.
While cutting the import duties, the government has to ensure that importers and dealers should share its benefit with the car buyers otherwise this step would lose its significance.
Market analysts expressed surprise over ad hocism in government policies as on one hand the government is introducing auto industry plan after holding talks with the local assemblers, while on the other hand it is trying to give a serious jerk to the local assemblers by cutting import duties on used cars. They said it is surprising that some government official or minister, whose names were not quoted in the stories appeared in various newspapers, had send shock waves for the local industry. This news has created only doubts over its credibility and authenticity as no minister or official was directly quoted on used car import duty cut. As the import duty cut story ran in almost all leading newspapers which means that something has definitely cooked in favor of used car lobby but against the local industry. Auto Industry Plan had already been delayed since October 2013 but this plan was already hit by controversies over the leaking of its draft in a newspaper on which the local industry was not happy saying the draft contained those possible decisions which the industry had not discussed. According to a leading newspaper report, the government observes that 150 per cent customs duty on import of bigger vehicles is too much and
Monthly AutoMark Magazine International unnatural. So the duty reduction will be across-the-board, but obviously the cut w ill be sig nifica nt ly big ger on big vehicles and smaller on small ones. By allowing bigger duty reduction on luxury vehicles the government did not want to favor rich people but it was because that the space for reducing 150pc duty was greater than cutting it from 45pc to 40pc on small cars. Vehicles having a capacity of over 2,000cc are liable to 150pc duty. The duty reduction will be across-theboard, for 800cc, 1300cc, 1800cc and even 3,000cc and above but with varying percentage. The age of vehicles would remain unchanged at up to three years. As per the leading newspaper report, the minister said the government was trying to create a new classification of vehicles below 800cc capacity like 600cc and 700cc to encourage import of smaller cars like Indian Nano car. The focus would be on boosting revenue by increasing the number of vehicles rather than too much tax on fewer vehicles, he said. Another English daily report said that the government is planning to reduce duties on imported vehicles in the next budget to provide relief to middle income car users by introducing a new slab with low tariff for those who want to switch over to small cars from two wheelers. T he p lan t o ra ti on a lis e ta riffs on imported vehicles is at a final stage that may be announced in the upcoming budget for 2014-15, said the newspaper quoting senior government officials. Despite the rationalised tariffs the FBR will get significantly higher revenues due to an expected surge in imports. Against the current lowest slab of up to 800cc engine capacity carrying 50 per cent customs duty, 17 per cent sales tax, 5 per cent income tax and one per cent federal excise duty, the government is likely to introduce a new slab of up to 700cc with reduced customs duty. Chairman All Pakistan Motor Dealers Association (APMDA) H.M. Shahzad may now be relaxed person as according to him his efforts to convince the government are all set to materialize shortly in view of government’s aim to liberalize imports of used cars to provide benefit to the people. The decision will result in increase in imports of used cars. Only 16,597 units
had arrived in the country (from 660cc to above 3,000cc including jeeps (4x4) in July-March 2013-2014 as compared to 39,839 units in same period last fiscal. Only 12,093 units up to 1,000cc under various schemes were landed in as compared to 22,669 units. From 1,001 to 1,300cc, only 26 cars were imported as compared to 2,174 units. According to data released by APMDA, imports of 1,301 to 1,500cc stood at 2,199 units as compared to 11,848 units. From 1,501 to 1,600 units, there was zero imports in July-March 2013-2014 as compared to 38 units in same period last fiscal. Only 1,590 units from 1,601 to 1,800cc found way into the market as against 2,259 units. In the category of 1,801 to 3,000cc, only 19 units came from abroad as compared to 51 units. Just 13 units of above 3,000cc was registered as compared to 71 units. In Jeeps (4x4), around 657 units were shipped to Pakistan as compared to 729 units. Chairman APMDA, H.M. Shahzad said the government netted only Rs6.7 billion in shape of customs duty from the above imports in July-March 2013-2014 as com pared to Rs 14.7 billion in corresponding period last fiscal. The customs duty collection will increase manifolds if the import duties are lowered especially in small cars. He said the industry is making hue and cry over used car imports as cut in age limit to three from five years coupled with reduction in depreciation limit had proved disastrous causing massive drop in imports while its positive impact is being enjoyed by the local car industry through their rising sales.
As per figures of Pakistan Bureau of Statistics (PBS) overall imports of cars comprising over 90 per cent of used cars plunged by 44.5 per cent in July-March 2013-2014 to $145 million from $261 million in corresponding period 2012-2013. The figures did not reveal the import numbers of completely built up (CBU) car units.
In the Budget 2014-2015 proposals, he said that the government should allow commercial imports of used vehicles up to 10 years of age vehicles. Besides, there should be no restriction of age limit of import of vehicles under the existing schemes for importing used cars. Allow in g co mmercia l imports in addition to existing schemes for the imports of used vehicles under various schemes would be in line with the gove rnme nt’s pol icy of the documentation of the economy and would generate 100 per cent more revenue for the government. It would also bring the used vehicle business into the tax net and will help the government expand its tax base. He urged the government that only certified members of APMDA should be allowed to import used vehicles on commercial basis for the sake of transparency in the trade. Due to the fact that used car import policy was made to facilitate overseas Pakistanis, Shahzad said that there should be no restriction of age limit for the import of vehicles. He said regulatory duty income decline has been a huge revenue loss, which can be verified from all Collectorate of Customs. The Customs General Order dated 13.1.2009 has deprived the legal, social and ethical right to obtain the depreciation at two per cent per month on old and used vehicles of above 1 , 80 0 c c im p o r te d b y o v er s e as Pakistanis. This facility was available for the last 30 years before it was abrubptly withdrawn. As per current SRO, the depreciation on the taxes and import value of used vehicle is at the rate of one per cent per month. The importers are already paying high tariff rate on account of RD at 50 per cent on the vehicles above 1,800cc (cars and jeeps) and due to devaluation of the rupee. The local assemblers are not making cars above 1,800cc and the imports of above 1,800cc cars and jeeps would not affect the local assemblers. Shahzad said the government should impose a fixed rate of duty on the import of used vehicles of engine capacity above 1,800cc. He said the Amnesty Scheme of March 2013 had regularized 52,000 smuggled vehicles of all engine capacities without restriction of age limit. Smuggling is done to avoid high duties and taxes. To curb smuggling, the government should reduce the dut ies an d tax es ... ..
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Budget 2014-2015
APMA urges government to encourage SMEs bike assemblers
Exclusive article by Ali Hassan
P
akistan has been producing an average1.6 million Motorcycles annually for the last six years but in the last one decade no government paid attention for bringing reliable and fruitful auto sector policy especially for SMEs of bike industry.
This year especially in the Budget 2014-2015, the bike assemblers' body Association of Pakistan Motorcycle Assemblers (APMA) is highly hopeful that the government will provide relief to the industry which has been in turmoil in the last one decade. Chairman APMA Mohammad Sabir Shaikh said “he is highly Confident that the Finance Minister Mohammad Ishaq Dar will provide a road map for the local bike industry especially low priced Chinese bike makers in this budget.�
However, in view of media reports that the government has decided to reduce customs duty on small to big cars of three years old to provide relief to the consumers is certainly a surprise when the government was already in process of unveiling auto industry policy.
So far there are no reports of reducing cu s to m d ut y on b ik e im p or ts . Commenting on this, Sabir Shaikh said that since 1981, the governments had kept the import duties on bike import at higher side to protect the local industry. The local bike assemblers have been engaged in assembling bikes for the last 50 years but the so-called pioneer of bike industry has yet to produce a complete Made in Pakistan bike.
He said that through SRO 655/2006, the import of sub-assemblies and subcomponents with the help of EDB by is suing IO RC certificates -- t he assemblers include the per centage of th es e s u b-a s s em blies a n d s ub components in locally made parts. By doing this, they claim to have achieved over 94 per cent localisation especially in 70cc and 125cc bikes, which is certainly not true. If the government brings down the import duty on bikes from 65 to 40 per cent, then the CBU imports will remain unfeasible due to exchange rate parity. He said that one dollar is now equal to Rs 100 in interbank market and also because of over 100 assemblers, the import of bikes would not cost cheaper than the price of locally produced bikes. Sabir said that the local assembly of bikes is quite easy as compared to CBU imports because it requires high investments, cash flow, quantity issues, storage problems, parts availability in the aftermarket etc. If the assemblers make a bike in Pakistan through imported parts and accessories besides adding local parts, there is no storage problems and it does not require huge investment due to involvement of many vendors. Besides, local assembly ensures new and existing jobs and further vendor development base. He said that the government in the new budget should remove policy hurdles especially three SROs of the auto sector
www.automark.pk | May-2014 | Page 14
The local bike assemblers have been engaged in assembling bikes for the last 50 years but the so-called pioneer of bike industry has yet to produce a complete Made in Pakistan bike.
Pakistan ha s been producing an average1.6 million Motorcycles annually for the last six years but in the last one decade no government paid attention for bringing reliable and fruitful auto sector policy especially for SMEs of bike industry. This year especially in the Budget 20142015, the bike assemblers' body Association of Pakistan Motorcycle Assemblers (APMA) is highly hopeful that the government will provide relief to the industry which has been in turmoil in the last one decade. Chairman APMA Mohammad Sabir Shaikh said “he is highly Confident that the Finance Minister Mohammad Ishaq Dar will provide a road map for the local bike industry especially low priced Chinese bike makers in this budget.� However, in view of media reports that the government has decided to reduce customs duty on small to big cars of three years old to provide relief to the consumers is certainly a surprise when the government was already in process of unveiling auto industry policy. So far there are no reports of reducing c us t o m du t y o n bi ke im po r ts . Commenting on this, Sabir Shaikh said that since 1981, the governments had kept the import duties on bike import at higher side to protect the local industry.
The local bike assemblers have been engaged in assembling bikes for the las t 50 yea rs but th e so-c alled pioneer of bike industry has yet to produce a complete Made in Pakistan bike. He said that through SRO 655/2006, the import of sub-assemblies and subcomponents with the help of EDB by iss uing IO RC certificates -- th e assemblers include the per centage of t h es e s u b-a s se mb li es a n d s ubcomponents in locally made parts. By doing this, they claim to have achieved over 94 per cent localisation especially in 70cc and 125cc bikes, which is certainly not true. If the government brings down the import duty on bikes from 65 to 40 per cent, then the CBU imports will remain unfeasible due to exchange rate parity. He said that one dollar is now equal to Rs 100 in interbank market and also because of over 100 assemblers, the import of bikes would not cost cheaper than the price of locally produced bikes. Sabir said that the local assembly of bikes is quite easy as compared to CBU imports because it requires high investments, cash flow, quantity issues, storage problems, parts availability in the aftermarket etc. If the assemblers make a bike in Pakistan through imported parts and accessories besides adding local parts, there is no storage problems and it does
not require huge investment due to involvement of many vendors. Besides, local assembly ensures new and existing jobs and further vendor development base. He said that the government in the new budget should remove policy hurdles especially three SROs of the auto sector and various permissions from the EDB. There should be direct permission for the local assemblers. The board of investment and FBR should expand their roles in promotion of local assembly. Board of Investment should hold some meetings with APMA and all stakeholders of bike to lure new investors. Sabir said that for the first in EDB's history, the Board produced directory of Engineering Goods Exporters which is certainly a positive step. He urged t he E DB t o relea s e th ese t yp e of directories twice in a year adding some new exporters and some pages fo r po licies , b esid es det ails o f international exhibitions of engineering sectors. He said that the government should consider giving uniform customs duty structure for commercial imports, OEMs, all kinds of parts such as a ssemblies, sub-assemblies, components, sub-components and raw materials. In addition, the valuation system should be overhauled in such a way that it
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continued on next page
should be based on per kg system for categories comprising Chinese parts, Japanese and Far East parts, and European parts, he said.
Hurdles created by the Engineering Development Board (EDB) for auto sector through different SROs should be discontinued otherwise no policy will bring any desired results. Sabir said that budget exercise between the auto stake holders and the EDB is unlikely to produce any fruitful results due to some assemblers' vested interest which suit the EDB officials. He said if the government understands the value and importance of engineering and auto industry especially SMEs, then Pakistan’s potential to double exports can be achieved as per desire of Prime Minister of Pakistan Mian Mohammad Nawaz Sharif. The EDB is taking various steps to evaluate the performance of the local industry and give it a boost to meet future challenges. One of the steps is expansion of SRO 693 (I)/ 20 06 by in clud in g pa rts indigenized after last revision. Sabir Shaikh believes that this SRO should be immediately abolished without wasting any time. EDB will evaluate the performance of the industry under the TBS Regime, its role and impact on indigenization, cost reduction of OEMs and Auto Parts Makers and passing on the benefit of reduction in duties being availed through IORs under 655(I)/2006 to consumers. He said IORC should be t erm ina ted a nd every app roved a s s e m bl er s s h ou l d b e g r a n t ed powers/permission of importing raw materials, assemblies, sub assemblies, compon ents and sub components without any EDB’s permission. The government should directly allow them through SRO or policy. On developing instruments to encourage further indigenization, he said that the word indeginizatin remains in the SRO and notifications instead of becoming a practical reality. To assess the tax and tariff environment of the auto industry including the stoms duties, sales tax, FED, withholding tax regime, para-tariffs etc. He said that a un iform tax structure should be introduced otherwise the government
officials and the industries will misuse all the taxation system in next eight years again. The government will assess the ongoing negotiations on PTAs / FTAs and already concluded FTAs, issues relating to WTO, Trade Policy, competing countries tax and tariff structure and the global trends on fiscal policies for the auto sector. He said perhaps the EDB is unaware that any PTA or FTA exist in the auto sector with any other countries. He said that the EDB should stop misguiding the government on PTAs and FTAs on auto sector as Sabir believes that PTAs and FTAs would not boost the local industry. T o improve the pro cedures a nd implementation of various SR Os applicable to the auto industry through making the processes more transparent, faster and simpler. The government, Sabir said, should abolish all the SROs on the auto sector immediately and there should be one policy document for the entire auto sector. On identification of loopholes in SROs to discourage their un-fair use, he said all the SROs are suitable for big industries instead of SMEs including assemblers and vendors. On assessing e xp o rt p ot en t ia l / p ro s pe ct s o f automobiles and parts and devise mechanism for market expansion, he said the sales tax and customs duties refund system should be improved as SROs like 656 is creating hurdles for exports.
On issues related to under invoicing, mis-declaration, smuggling and used parts/vehicles import. Sabir said the Customs valuation system has to be unified for various countries. For example, all the Chinese imports of parts for OEMs and commercial markets should be on the same value. On steps for easy and smooth access to inputs and endeavor to remove all the possible irritants in the applicable policy and procedures, he elaborated that in case an OEM tries to directly import parts, the government should support the OEM instead of creating problems through importable list and production certificates. The government has to
simpplfy the valuation ruling for OEMs as well as commercial importers. Sabir Shaikh said that the FBR must understand that the government has to phase out auto sector SROs in t h e co m in g b ud g et 201 4 -20 1 5. Otherwise, two to three more years w o u ld a g a in g o i n w a s t e i n understanding the issue.
He said the government wants direct impact of taxation measures to reach the end users. However, it is only possible when the government introduces a uniform policy for both large scale and SMEs. There is a need to remove hurdles of IORC besides bringing uniformity in valuation system, removing the hurdles like production certificates and importable lists by the EDB etc. This will help the industries to introduce new models at affordable prices. Concessionary tariffs should be removed in this coming budget as these SROs were introduced in 2006 for five years. This was a failed policy of former Finance Minister Shaukat Aziz who introduced Tariff Based System (TBS) instead of moving ahead with deletion programs. H e added the govern men t takes feedback and suggetions of the SMEs two months prior to the budg et annuncement but it actually favors the big assemblers by making policies serving their interest. APMA chairman said all the policies and SROs made in the last 15 years were not in the interest of the country, not revenue-oriented and were basically following an anti localization policy and also against the industrialization and employment. He said the government should focus in the budget on two type of duties – duty on spare parts (for OEMs, commercial market, assemblies, sub assemblies, components and sub components) and secondly on completely built up units. Valuation system (cars, bikes, tractors, LCVs, etc) if imported from China then valuation rules should be the same. For
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Monthly AutoMark International Far East (second valuation category). For Japan and Europe (third valuation category). There is a need to announce imported parts ruling on per kg basis before the Budget. This will reduce smuggling, under invoicing and misdeclaration. He strongly demanded that issuance of various permissions through the EDB such as importable lists, production certificates and IORC should be done away. All over the country the dealers of auto sector and parts should be registered in the sales tax net. Those who do not want to come in the ST net, the government should charge extra five per cent GST from the dealers. He suggested the government to reduce the GST to 15 from 17 per cent in the budget as this would help curbing sales tax evasion. He was of the view that the committees formed by the finance minister under FBR in which FPCCI and some other chambers are their members is not enough as there is a need to induct more experts of their field. The government has to give its due attention to the two wheeler segment this year especially and efforts should be made to pressurize the leading assemblers to bring a change in the decades old 70cc models. Policy hurdles, if removed, would encourage assemblers to introduce new models in the country.
Chairman APMA said that Chinese parts are of same quality either imported by the commercial importers or by the OEMs. But Suzuki and Honda are Japanese branded bikes and if their assemblers import parts from China then it means genuine import of parts. Around 104 other approved assemblers also import parts from China (almost same as being imported by the commercial importers). He said the Valuation Department should clea rly men tion th at the co mm erci al i mp ort ers , Ch in es e do mes tic b ran d s a n d Pa kis ta n i local brands are same quality and s ta n d a rd s . B u t H o n d a , Su zu k i
and upcoming Yamaha are genuine brands even their parts are imported from China. APMA chief said valuation is purely a issue of bike assemblers who are domestically produced by the Pakistani assemblers and all of them are APMA active members.
However, the Valuation department always invites KCCI, FPCCI, PAMA, PAAPAM and MSPIDA in every meetings to ascertain and fix true value of parts. The main stakeholders are 104 approved assemblers who are producing bike with their hard struggle. He said in Para three under discussion ruling, the department mentions words about APMA’s representatives where it mentions that parts imported by the commercial importers and by the OEMs of Pakistani and Chinese domestics brands are not same. Sabir Shaikh said that this is ridiculous as these parts are same imported from China by the OEMs and commercial importers. The original purchase price of the importers from China is much lower than prices mentioned in the ruling of 42 items. The valuation ruling issued on March 31 is on very higher side. If the government does not lower the values of these items then the smuggling will continue to thrive, he said. APMA chief said that he along with other members also attended the meeting for AIP but their proposals were missing in the AIP draft appeared in the lo ca l new s pap ers, w hich is really disturbing for the SMEs bike assemblers. He said the government should realize tha t th e main st akeh olders a re motorcycle assemblers of Pakistani and Chinese domestic brands who are producing more than one million units of two wheelers annually for the last many years.
He said that it seems that the AIP is being made at facililitating only three Japanese car and bike assemblers. He added that does the new auto policy really care about country’s revenue, industries, job opportunities, genuine localization etc. www.automark.pk | May-2014 | Page 17
Monthly AutoMark International
Automotive Sector - Update
FBR reviews number of concessionary SROs The FBR has also analysed amendment in SRO 655(1)/2006 - export of automotive components & assemblies; amendment in SRO 656(1)/2006 revision of minimum in-house facilities; amendment in SRO 656(1)/2006 reduction in duty on tyres for vehicles of heading 87.01 under HS code 4011.2090 to 5% The Federal Board of Revenue (FBR) has reviewed a number of concessionary statutory regulatory orders (SROs) to amend and revise customs related notifications to take away concessions in customs duty at the import stage in budget (2014-15). Sources told Business Recorder on last week that the FBR has analysed the SROs on certain principles for review of customs concessions. The customs related SROs have been considered by FBR for simplification/phasing out under the exercise in consultation with the relevant government department. Under the exercise, the FBR has analyze d SRO.56 7(1)/2006 ; rat iona liza tion o f cu sto ms d uty on Pathalic Anhydride (PA) industry; SRO. 575(1)/2006; SRO 809(1)/2009; SRO 678(1)/2004; SRO.565(1)/2004; re t ain ing e nt rie s un de r SRO 565(1 )/200 6; explan atio n to be added under SRO 565(1)/2006 and ot her propo sals rela ted to SRO 565(1)/2006. The FBR’s exercise has also analyzed amendment in SRO 565(1)/2006 (S.No 2 ) — ch an g e in d esc riptio n o f componen ts; amendment in SRO 565(1)/2006 (S.No. 3) - change in description of manufactured goods; amendment in SRO 565(1)/2006 (S.No. 4) - to exclude “Fin-Type Evaporator” for the manufacture of refrigerators / vis ico olers ; am en dm en t in SRO 565(1)/2006 (S.No. 5) - to add “retarder / speed reducer without motor” for the manufacturing of semi-automatic washing machines; amendment in SRO 565(1)/2006 (S.No. 6) - to incorporate detailed description of input materials used in the manufacturing of car air conditioners; amendment in SRO 565(I)/2006 (S.No. 9) - change in description of manufactured goods; amendment in SRO 565(1)/2006 (S.No. 20) - addition of raw material; amendment in SRO 565(1)/2006 (S. No. 64) – PVC manufacturing industry interpretation and application of SRO;
amendment in SRO 565(1)/2006 (S. No. 74) – to add and correct certain entries; amen dment in SRO 565(1)/2006 (S.No.88) - to delete CRC steel coils from welded steel pipes / tubes; amendment in SRO 565(1)/2006 — add special condition for the manufacturers of CRC steel coils from HRC steel c oils ( S. No .9 1) ; am en d me n t i n SRO 565(1)/2006 (S. No. 106) - to delete lo cally manufactured raw materials. Th e FB R h as a nalysed SR Os to encourage local manufacturing of automatic washing machines (new addition); local manufacturing of multipurpose engine above 36 hp (new addition); review of tariff structure on abrasive cloth sheet, belts/roll, sand paper, fiber disc and buffing paper manufacturing industry (new entry); d u t y t a x e x e m p t io n o n l o c a l manufacturing of lead lamps (new entry); rectification of tariff anomaly faced by sodium laryl ether sulphate manufacturers (new entry); reduction in duty on import of inputs used for the manufacture of agricultural machinery & implements. The FBR has also analysed amendment in SRO 655(1)/2006 - export of automotive components & assemblies; amendment in SRO 656(1)/2006 revision of minimum in-house facilities; amendment in SRO 656(1)/2006 reduction in duty on tyres for vehicles of heading 87.01 under HS code 4011.2090 to 5%; amendment in SRO 499(1)/2009 - imports vs local assembly o f H E V S ; a m en d m en t in SR O 693(1)/2006 & customs tariff to add the parts in respect of the new vehicles; amendment in SRO 693(1)/2006 & customs tariff – levy of additional duty on the import of localized parts / components of cars, motorcycles & t r a c t o r s ; a m e n d m e n t in S R O 693(1)/2006 and customs tariff protection to locally manufactured road whe els; am e ndm e nt in SRO 693(1)/2006 and customs tariff - re-
classification of automotive whether strips (seals); amendment in customs tariff - reclassification of air and fuel filters to cover all types of locally manufactured filters; amendment in customs tariff - rationalizing tariff for pneumatic tyres of rubber; amendment in customs tariff - removing anomaly on unit of measurement and valuationof auto parts; amendment in customs tariff - recommendations for insulators industry; amendment in customs tariffrationalization of customs duty on im p o rt o f w eld e d s te el pi p es ; amendment in customs tariff - definition of secondary quality steel products; amendment in customs tariff - reduction in duty on ferrite core transformers and inductors. The FBR has examined SROs for amendment in customs tariff - increase in customs duty on paper & paperboard p ro du ct s t o enco ur age loc a l manufacturing; amendment in customs tariff - rationalisation of customs duty on certain materials; amendment in customs tariff - decrease in customs duty on certain types of bearings to maintain uniformity; amendment in customs tariff - reduction in rate of customs duty on coal TAR (2706.0010); amendment in customs tariff — description change (9032.1010); amendment in customs tariff- creation of new PCT heading to avoid mis-declaration of cobble plates as billets at import stage; amendment in customs tariff - creation of new PCT heading to avoid mis-declaration of fusion bonded epoxy (powder coatings) as epoxy resin; rebate on export of engineering goods; bigger challenges under invoicing, mis-declaration and smuggling; centralizing registration of vehicles specially 2/3 wheelers; review of fixed duty regime under SRO 577(1)2005—- used cars; export of samples (upto limit $ 100,000/ year and national electronic policy to encourage real manufacturin g of electronics goods...
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Monthly AutoMark International
Automotive Sector - Update
Setting up CNG industry was a wrong decision, says minister
Federal Minister for Petroleum Shahid Khaqan Abbasi has said that the CNG industry should never have been set up, which is without any law and code of conduct. Talking to media outside the Parliament House on last week, the minister said Pakistan was facing energy crisis due to wrong policies of the past governments. He said those who were blaming their govt should talk in parliament and they would respond. He said the demand of gas was 6 billion cubic feet while its supply was 4 million
cubic feet. The minister said first the CNG supply to vehicles was for 72 hours which was now reduced to 54 hours. Due to this reduction problems have multiplied and long queues of cars are seen, he added.
People who own vehicles worth Rs 2.5 million should tell why they stand in long queues just to save Rs 500, the min ist er qu est ion ed. R ega rdin g agreement for LNG export from Qatar, he said the agreement would be made at government level and not through personal connections, adding that it would be based on principles. Regarding Pak-Iran gas pipeline, he said I can say it a thousand times this project would be difficult to continue due to US and international sanctions...
Pakistan to spend $2.25 bn annually on LNG import The government’s intending LNG imports would cost Pakistan $2.25 billion a year translating into $16 per mmbtu, Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said. Addressing on the occasion of Service Agreement Signing ceremony between the Sui Southern Gas Company and Engro, Abbasi said that the LNG terminal would be ready in 335 days and then country would start receiving the imported gas. He also said that Pakistan State Oil (PSO) would import the liquefied natural gas and the rates for consumers would be determined according to the
weighted average pricing method.The minister said that the government would spend around $2.25 billion annually ag a in s t t h e im po rt s of aro u n d 400mmcfd gas while the Engro’s terminal would be paid $100 million annually as tolling charges. IAccording to the details of the proposed LNG services agreement, Engro would be paid terminal charges, as the terminal would be used for re-gasification and st orag e pu rpos es. Th e sa id th e agreemen t also in cludes certain cond ition s and En gro w ould be responsible for putting its 400mmcfd capacity terminal operational within 11 months after the sign in g of the
agreement. According to two major conditions of the agreement, the SSGCL would not pay any charges under the head capacity in case of no import of gas to the country. Secondly, the SSGCL would not pay the price of gas likely to be wasted on account of technical losses, they added. A board of SSGC on January 28, 2014 had achieved a major milestone towards bringing imported Liquefied Natural Gas (LNG) to the country by approving a plan for the construction of new terminal for import of Liquefied Natural Gas (LNG) at Port Qasim to a subsidiary of Engro Corporation with certain conditions.....
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Monthly AutoMark International
Automotive Sector - Update
The local auto industry has asked the government to withdraw Federal Excise Duty (FED) on locally manufactured 1800cc or above vehicles to help the consumer benefit from high-end vehicles at reasonable prices. Director General, Pakistan Automotive Manufacturers Association (PAMA) in budget proposals 2014-15 has suggested to the government that FED at the rate of 10 percent on locally manufactured motor vehicles (1800cc or above) falling under HS code 8703 category should be withdrawn as this has significantly affected the price and consequently sale volumes of this category of locally produced vehicles, which are being produced after h uge amou nt of investments. ‘The withdrawal of the levy on locally produced motor vehicles of 1800cc or above will not only restore the sale volumes of manufacturers but also lead to additional contribution to the national exchequer. Further, the local industry geared up with lot of efforts to produce high end vehicles with huge investment will be able to sustain and confidence of investors will be restored,’ said Director General Pama. It is to be noted that through Finance Act, 2013, 10 percent FED was levied on motor vehicles 1800cc and above. ‘This FED has put the country’s first
Auto industry
seeks withdrawal of FED 1800cc or above high-end vehicles Sports Utility Vehicles (SUV) manufacturing project in danger of discontinuation. It has hit the sales of Toyota Fortuner, which was launched in March 2013, drastically, making it almost impossible for the manufacturer to continue with it,’ he added. He requested the government to immediately exempt all locally manufactured SUVs from this deadly 10 percent FED, adding that the drop in the sales of the Fortuner has also resulted in a sharp decline in revenue to the government. The estimated loss to the government through this decision is Rs 231.8 million per month while the annual loss is Rs 2.78 billion. He further said the government is already earning much in terms of custom duty and general sales tax, so there was no need of imposing FED. According to the break-up of duties on one Fortuner, the government earns Rs 946,000 in terms of custom duty; Rs 446,000 through 10 percent FED; Rs 834,000 as general sales tax; and additional 100,000 as registration. This set of duties and taxes amounts to Rs 2.326 million which makes on road price of one Fortuner Rs 6.2 million. ‘At the time when the government is planning to improve the economic situation of the country there is need that it should focus on restoring the confidence of investors as they can create employment opportunities through new investment, increase revenue to the government, and help better the economy of the country,’ he added...
Car makers seek end to concessions on used vehicles import Th e ca r in dustry has urged the government to curb undue concessions to imported used vehicles and revise the import trade prices (ITPs) to boost sales of locally made cars and revenues. The ITPs valuation done under the SRO577 is based on old prices which puts local industry at a disadvantage, auto assemblers said in the 2014-15 prebudget proposals. Regarding Income Tax Ordinance 2001, the car industry proposed reduction in turnover tax from one per cent to 0.2pc as being allowed to motorcycle dealers, distributors of FMCG, pharmaceuticals, fertilisers and oil products. The government should eliminate/ reduce withholding tax at 3.5pc on sale
by authorised dea lers of vehicle m a n u f a c t u r er s , a s a l lo w e d t o d ist ribu to rs of ph arm a ceu tica l, cigarettes, textile sector, etc under PartII to Second Schedule to Income Tax Ordinance, 2001, the proposal said. The benefit of both the proposed reductions is that wholesale-retail mechanism(may be implemented, as applicable internation ally) would improve volumes on account of stock availability and healthy competition. Income of dealers would be subject to normal taxation that would enhance documentation and may increase tax to income ratio. Th e auto in dustry app ealed the government to fix import duties on used
cars on current global rates instead of under outdated SRO577 of 2005. The policy to facilitate the expatriate Pakistanis to import used cars up to three years old on reduced duty of 36pc (1pc per month reduction in duty) was being misused as used cars were being imported by commercial traders in bulk and sold in the market. The industry further suggested that withholding tax on import of raw materials and plant and machinery by industrial undertakings should be reduced from 5pc to 1pc. Federal Excise Duty (FED) on locally manufactured motor vehicles (1,800cc or above) falling under HS code 8703 category be exempted or eliminated...
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by Usman Aslam Malik - Chairman PAPPAM
The auto industry’ bus manufacturing units are operating at record low level of less than 3 percent of their installed capacity, as all plants have produced merely 630 units of buses in first three quarters of the current fiscal year against the total annual production ability of 26,150 units thanks to the ra m blin g im po rt p o licy o f th e government. At a time when almost all provincial governments are planning to facilitate their public by launching rapid bus services in their provinces the country’s bus a ssem blers are sh owin g an ala rm ing ly low figu res o f their production as the major chunk of this mass transport facility is being fulfilled mainly through import, auto industry experts said. According to the lates t d ata of Engineering Development Board, the major bus manufacturing companies including Hinopak Motors, Gandhara Nissan, Gandhara Industries, Afzal Motors, Daewoo Pak Motors, Tayyaba Motors and Fuso Motors have produced only 630 bus units against their total capacity of 26,150 units in the period of July 2013 to March 2014. The data shows that Hinopak Motors which has installed capacity of 5,950 units per year, produced only 372 busses of all ranges and ranked first in Pakistan as all other companies production is even below. Gandhara Nissan could produce just 6 units of Nissan SP 210 bus against capacity of 4,200 units while Gandhara Industries managed to produce 17 units of Isuzu NPR 66PB Bus and Isuzu MT133 Bus against ability of 3,000 units. Master Motor Corporation Karachi can make 8,500 busses in one year but it could assemble only 13 busses of Master Yuejin and Master Mitsubishi models in 9 months. Likewise Afzal Motors can assemble 3,000 busses but it could show production of just 10 busses. Only the Daewoo Pak Motors could succeed to
utilize production capacity a little better as it manufactured 180 busses out of 500 capacity. Fuso Master Motors, having capacity of producing 1000 busses, could not manufacture a single bus throughout the current fiscal year. Auto industry experts are of the view that though Punjab government has launched rapid bus service in provincial capital, besides initiating more such projects in other cities yet the authorities have imported all busses for those projects. They said that all bus manufacturers of different models including Hino, Nissan, Isuzu, Master, Daewoo are producing high quality and state of the art buses but Punjab government preferred to import them from China and Turkey. If govt orders local company to manufacture busses, every bus will provide jobs to at least 100 people directly. “Its unfortunate that country’s local demand of busses is about 6,000 per annum and if all requirement is fulfilled through local production hundreds of thousands of jobs will be created, balance of trade will be improved, GDP ratio will be enhanced, besides reducing run nin g maintenance gradually,” officials in the Engineering Development Board opined, requesting their names not to be mentioned. The Lah ore T rans port Compan y imported 300 busses last year, they said and added that import process takes at least five months and local companies co u ld a ls o p ro d uc e t h o s e 3 0 0 buses within this period of five months. They said that only months after the Metro bus service’s inauguration, the so called state of the art import buses developed various problems including air-conditioning and cooling system failure, while many broke down due to heating up. They pointed out that the computerized system also crashed in some of the
imported buses and foreign experts had to be called in. The Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) chairman Usman Malik appreciating the Punjab government mission of providing comfortable, affordable and rapid bus service to the public, has stressed the need for manufacturing of these busses at local level. All provincial governments should take serious action to prevent bus import and should device such policies that can enable our own local industry to prosper and to compete in the global auto markets of the world. He sa id tha t all bus as semblers h av e join t v en t ure s w ith loc al companies and locally-made bus uses at least 65 per cent local components, leading to the high g row th an d employment generation in auto parts industry too. No doubt it is a responsibility of the government to make such policies that facilitate the development and growth of domestic auto industry bounding them through deletion program strictly. However in Pakistan, the frail and unfriendly strategies of the management are hampering the home industry to flou rish . T h e loca l in du st ry can manufacture the low cost units, with latest technology equipment, beautiful design and outlook, but it requires government support, he stated. Usman Malik said that vision of the provincial government to decrease commuters’ hardships by resolving transport problem in major cities is appreciable. “A comprehensive strategy is required to iden t ify n ew r out es for t he convenience of the commuters in all major cities to lessen dependence on cars by introducing culture of buses. In this way our oil import bill will be curtailed while traffic as w ell as environmental issues will automatically be resolved, he added....
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Director Road Prince motorcycle, Mr. Muhammad Adeel Usman presenting souvenir to Mr. Khawaja Almas, Cheif commercial and retail of Allied Bank Limited, at the occasion of the delivering of 413 Road Prince RP Bullet 70cc motorcycles to Allied Bank Limited.
Road Prince Motorcycles - Future is here On an expansion mode to grab a significant stake in the Pakistani Motorcycles segment, Road Prince Motorcycle Pakistan has launched new products at 'best value at every price point' to take on its bigger rivals. L a u n c h o f RP B UL LE T 70cc and JACKPOT 110cc has brought its products at par with the market leader. Confirming this, Managing Director Road Prince, Mr. Tanveer Ahmad said, "We plan to offer two-wheelers at every price point with best quality parts and after sales services with one of the largest 5S network across the country. Backed by country's one of the biggest RP Genuine Parts Network, we surely have at par edge over competition wh en it comes to R es ea rch an d Development, Manufacturing and Sales Distribution." Recent business collaboration of Road Prince with Allied Bank Limited, the countries widest banking network, shows much efforts in securing top slots in corporate sales. All credit goes to the trusted RP team at Sales, Service, Spare
Parts network at every nook and corner of the country.
RP Bullet 70cc , recent launch that lead its way in modification and innovation, provides greater value to its valued customer by giving them Power along with extra mileage. On Company's prospective view point: Speaking on Product launch ceremony in Lahore, Faisal Mufti (Group Senior Marketi ng Manager), Mu s t af a A li R i zvi ( G en er al Manager Sales & Marketing) and Arshad Ali (Advisor to CEO) Road Prince:
"Banking on the idea to launch a modified extra value motorbike with a minimal price was well accepted by the audience making it a Mega Hit. Not only the bike had extra features and kept up the value for money, the Road Prince Marketing team left no stone unturned whilst making it a Block Buster. Knowing the fact,
Dis trib u tion network is the backbone of any launch, we offered best in the industry Foreign tour schemes on high sales achievers, disseminated 1300cc brand new cars, Motorcycles, LED TV screens, Laptops and much more." Creative Agency: HUMAN DESIGN S T U D I O S , C h i e f Creat i ves / Imagi nee r, A dn an Mushtaq Ali, words. " RP
Bullet 70cc - Boht Tezz was conceived at same platform with the company and creative house HUMAN DESIGN S TUDIOS. Television commercial stars the Motorbike and No one else. TVC was shot in Full HD Compositing Environment with heavy digital/an ima te s po s t production in Singapore. This high budget film concept revolves around a gun, bullet, barrel, tunnel, and Motorbike where motorbike is
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Monthly AutoMark International
digitalized in every manner to highlight each function and utility this bike offers. Stringent timelines for launch date along with extremely difficult idea to execute was a challenge well taken by me. I wanted to show that Bullet motorbike gives a higher perceived value along with style statement than any other bike on i ts c ur ren t an d fu tur e competition. Feature have to be highlighted without any visual noise and clutter. The audience gets a feel of this million dollar joyride just by watching the TVC on their favorite local, satellite and cable channels. Not least to mention, along with ATL activity, we managed to create mega awareness on street level with the
help of Live Product Launch Floats, Test Ride camps, Leaflets, detail product Brochures, Posters, Banners, huge hoardings on every busiest junction of main cities and remote areas. JACKPOT 110cc: "Aub lagay ga JACKPOT" with a sign off line "100cc ki qemat mein 110c ka power" is a power statement in itself. The well thought slogan shows a moment of joy and excitement in contentment when buying this motorbike. Offering 110cc horse power in price of 100cc is the biggest
Mr. Faisal Mufti, Group Marketing Manager, Road Prince Motorcycles
jackpot a customer can have under Road Prince umbrella. The company invested well in des ign , p rodu ction a n d marketing, in order to achieve sales results starting from 1st quarter. Television Commercial was again a challenge while the whole concept revolved around Transformer animatics. This is first of its kind TVC production with unique technique of Dubstep music direction with High definition 3D animation of rendered bike modeling adopted that focused bike features in detail in a transformer theme. We created a lot of hype with the teaser in print and electronic prior to launching the campaign and that got a lot of engagement." Leading its way in innovation and best value at every price point, Road Prince Motorcycles yet to launch more exciting products this year and head its way up. Inshallah!
Mr. Mustafa Ali Rizvi, General Manager, Road Prince Motorcycles
www.automark.pk | May-2014 | Page 23
Exclusive Article by Owais Khan
SUZUKI Wagon R
DEBUTS IN PAKISTAN
Wagon R price also looks attractive which may force many buyers of used cars to switch over in bringing zero meter Wagon R due to full parts and service back up.
A
t a time when Pak Suzuki Motor Company Limited (PSMCL) unveiled locally assembled Wagon R in the third week of April 2014 in Lahore, the government, as per media reports in first week of May, has reportedly decided to cut customs duty on import of up to three-year-old automobiles of various engine capacity under various schemes. This kind of situation reminds of a shock fac ed by Adam M otors w hen it introduced a locally assembled small car and suddenly the then government reduced import duties on used cars or liberlised used car imports. As a result the project became a history.
At least the government must have considered before further liberalizing import of used cars that a leading car assembler, having over 50 per cent market share, has introduced a new car. The company has also planned to introduce more cars like Suzuki Alto 800cc and Swift new version in case the government allows import of parts and accessories from India. The Wagon R looks stunning in its looks and interior design but it is to be seen how the Pak Suzuki new car is going to survive in a market where thousands of used cars of few years old are parked in the showrooms of used car dealers. It may noted here that Suzuki Swift got
a huge response from the buyers after its launch but for the last few months the sale of this car has been going flat. It suggests that people usually review various options whether to buy imported used three year old Toyota Vitz, Passo etc or locally assembled Suzuki Swift due to limited price difference. However, decline in imports of used cars is a good sign for the local assemblers to bring more new cars in Pakistan. The silver lining in the introduction of this Indonesian version vehicle is the full back up support of parts and services coupled with warranty which the people do not find in purchasing used cars. However, used cars especially of three to five years old of Toyota, Honda, Daihatsu, Nissan etc definitely enjoy an edge over Wagon R due to their extra features. But hopefully Wagon R will definitely lure the buyers especially those who prefer locally assembled cars due to after sales service and easy parts availability in the markets. Hopefully Wagon R because of its design, advance engines, features and dazzling colors will prove a good addition in the Pak Suzuki family and fill the vacuum created by the ouster of Suzuki Alto. Pak Suzuki is already facing problems due to declining sales of Suzuki Mehran and Suzuki Swift. Cultus has been doing well so far. Besides, Wagon R price also looks attractive which may force many buyers of used cars to switch over in bringing zero meter Wagon R due to full parts and service back up. Mr. Hirofumi Nagao, Managing Director
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Monthly AutoMark International Pak Suzuki on the occasion of Launch of Suzuki Wagon R in Pakistan on April 18 said that Suzuki Wagon R has successfully travelled all over the world an d got appreciations from the customers worldwide. The journey started from 1993 when 1st Gen eration of Wagon R was launched in Japan. This redefined the compact car concept in Japan and became one of the most popular models in a quick span of time. Based on the extraordinary response the Wagon R was introduced in other countries including India and Indonesia and it gained enormous response. He said Wagon R is considered as a Star Product in Suzuki Motor Corporation p o r t fo li o a n d h a s w o n m a n y a p p r e c ia t i o n s a n d a w a rd s . I t Maintained Status of Best Selling Car in Japan Consecutively for six Years. He was optimistic that the Wagon R will not only exceed the expectation of the Pakistani customer but will redefine the compact car customer motoring requirements. In line with the customer requirement, the company has kept fuel efficiency as the top priority. Wagon R is equipped with the world famous Suzuki K Series engine which is incorporates excellent compression ratio, is less on noise, light weight and is extremely fuel efficient. Wagon R with its modern design, spacious interior is designed to provide utmost comfort and convenience and offers a practical solution to the motoring needs of the customers. He hoped Wagon R would go a long way in satisfying customer needs and will soon become a talk of the town and h o u s eh o l d n a m e in P a k i s t a n . Mr. K. Saito, Executive General Manager Suzuki Motor Coproration Japan said Suzuki Motor Corporation, Japan has overseas distributors in 149 countries taking care of sales, after sales and other support services of diversified p r o d u c t p o r t f o l i o s i n c lu d i n g automobiles, motorcycles, and outboard motors. We have overseas automobile plants in 12 countries and motorcycle plant in 16 countries. He said Pak Suzuki Motor Company is categorized as o ne of the mos t prestigious overseas distributors of Suzuki Motor Corporation, Japan. We firstly entered the Pakistani market in 1972 and our local production started in 1975. Since then, Pak Suzuki Motor Company is keeping over 50 per cent
market share in automobile category. In the year of 2013, we recorded to sell 2.69 million Suzuki automobiles across the world as the maximum numbers in the past. Of this, 77 thousands units were sold here in Pakistan and it made Pakistan to be the 5th largest country in the world for Suzuki automobiles. This result is truly outstanding and clearly reflects the Pakistani customers’ confidence in Suzuki automobiles, he said. As a marketer this spirit and customers trust keeps us going and gives us the inspiration to introduce new models in Pakistan, he added.
Since 1993, when we launched Wagon R in Japan, it is the Brand that has special position in the Suzuki Portfolio. Last year we celebrated this memorial 20th anniversary, and could achieve 4 million of total domestic sales of Wagon R as a proof of to be loved vehicles for 20 years long by Japanese people. He hoped that Wagon R will cater to the requirements of Pakistani customers and very soon will become the most popular car in its segment. Suzuki Motor Corporation will continue to recognize Pakistan as one of the most important markets and will keep providing newer and newer models to enhance the customers way of life. The two above executives did not mention about the localization level of local parts in Wagon R. The company must have invested in rupees or other currency for the introduction of new car but the speech of the exectutives were silent on this.
For many Pakistani customers, who were already looking forward for a replacement of decades-old Mehran 800cc model with a new 800cc car, must be feeling disappointed as the company introduced 1,000cc instead of 800cc model. It means that customers will have to w a it for m ore yea rs an d k eep purchasing outdated Mehran which does not exist in any country of the world. People think that Suzuki Motor Corporation should have first replaced Mehran with a new 800cc car and then have brought Wagon R in Pakistan as people are sick of Mehran design, color, old engines, unimpressive dash board, shocking suspension, old fashioned steering design etc. Certainly a new 800cc model would have definitely coasted cheaper than W agon R . Mehran’s falling sales perhaps reflect buyers’ losing confidence on it which had actually driven the country’s vendor industry. Mehran is almost same as it was first introduced in Pakistan in 1990. Only the head lights, front grill, back light, left side of dash board etc have changed which is not an achievement in terms of localisation of parts. The company took decades in rolling out Euro II engine in Mehran from last year. The en tire design out look has been m ain ta in ed sin ce 1 990 an d n o governments have taken any action against the company rolling out outdated design. The Pak Suzuki must have recovered the cost of jigs and fixtures and other investments made in Mehran but miserably the deletion level in Mehran had come to halt at 70 per cent for many years instead of crossing 90 per cent since 1990. The company continued to enhance the prices of Mehran three to four times a year since 1990 linking to exchange rate parity thus suggesting that no serious effo rt s we re m ad e t o imp ro ve localization. Perhaps the company looks confident even if its sales are falling as at least Mehran is still an option for those who cannot afford Daihatsu and other small engine power used cars.....
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by Muhammed Yousuf Shaikh Chairman PCMIC
The Patriot Prime Minister Mian Muhammad Nawaz Sharif, the last hope For Pakistan
Pakistan China Motorcycle Industry Council (PCMIC) voiced strong support to the government in its efforts to increase revenue collection and streamline the taxation structure of the country. PCMIC Budget proposals 2014-15 are for rapid documentation of economy to boost tax collection and to encourage the FDI in Pakistan By now, almost all Pakistanis must have heard about that what the country d espe rately need s i s ho nest leadership.Pakistanis are hard working peo ple. T h ey h ave born e m an y h a r d s h i p s w it h fo r t it u d e. B u t unfortunately Pakistan did not get sincere and hardworking leadership. PCMIC believe that the Prime minister mian Muhammad nawaz sharif is the best available leadership for Pakistan’s as he is working day and night for Pakistan and to work to unite the nation on one Pakistani agenda. In the Current Scenario of Pakistan the Support of Nawaz Sharif government means to support Pakistan and to contribute in the development of Pakistan as he announced and started many mega projects for Pakistan. peoples of Pakistan have responsibility to provide the stability and should give continuity for at least two electoral terms which is now necessary for Pakistan as Am er ica n s p eo pl e a lw ay s g a ve continuity and to elect their existing and past president for two terms instead to change again and again the leadership to avoid to damage the continuity of the government policies for their country and their people. We also have another example of our neighbor and brotherly country China. At present the Mian Muhammad Nawaz Sharif is about the only Pakistani politician that is most experienced and well known internationally yet. It’s time the nation to gave him an opportunity to develop Pakistan instead to gave
chance to untried and untested excricketers, ex-soldiers to allow them to send again the Pakistan far behind. The fact that after skirting on the fringe of the political hinterland for so many years he could make such a huge impact says a great deal about the person. He is scrupulously honest & patriot, has a clean record and a lot of administrative ability. In choosing his team, he must be careful not to acquire turncoats like M r. Is h aq Dar, Mr . a hs an iqbal, Mr. khurram Dastagir, Mr. Sartaj Aziz an d sure all of his cabinet members. We are aware that Nawaz Sharif has a number of serious challenges before him. But we also know that not only Pakistan but the entire South Asia has great expectations from him. He is a ray of hope amidst surrounding darkness. His experience, wisdom, patience and statesmanship, his love for his country and his deep desire to bring his people out of distress are strong positives to bring success to his efforts. No doubt, Pakistan is facing various challenges but present government under an effective strategy of Prime Minister Muhammad Shahbaz Sharif will succeed in overcoming these challenges and Pakistan will soon b ec o m e a d e v e lo p e d c o u n t r y . The development package of 32 billion dollars by Chin a reflects con fidence of Chin ese leadership and the government in the leadership of Prime Minister Muhammad Nawaz Sharif. Chinese man ufacturers to fully benefit from this opportunity and
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invest in various sectors including energy sector in Pakistan.
Budget Proposals 2014-15 by PCMIC: POLICY FOR SMALL AND MEDIUM MOTORCYCLE INDUSTRY: Government did not an n ou n ce a ny po lic y for n ewly es t ab lis he d s ma ll an d med iu m motorcycle units in all over Pakistan as SME motorcycle Industry proving cheap transportation to the n ation and employment. There is need for the removal of role’s of multiple regulatory bodies such as EDB, PSQCA & E&T from motorcycle sector because this role is a hurdle for small and medium motorcycle industry for making again and again lengthy unnecessary paper work. After the induction of Tariff Base System by the Government for auto sector the unnecessary role of all regulatory bodies should be removed. However, this institution is still working and creating hurdles for the industry in s tea d to help in R es earc h & development and export. SRO 656 dated June 22, 2006 and SRO 496 dated June 9, 2007 is not in the favor of newly established motorcycle
industry. These SROs favoring only largest producing units. Once approval & Permission granted by EDB , PSQCA, Excise and Taxation Departments of all provinces and registration with sales tax department (FBR) should be enough for the running of motorcycle industry. Ministry of Commerce and Industry must organize a committee to resolve th e issu es o f the in dus try w it h consultation of PCMIC. Framework of SME Motorcycle Industry
National Policy must be based on the long perspective to expand and establish SMEs in Pakistan to produce more and enhance trade. Establish and upgrade the industrial structure to enhance production to meet the demand at home and also export. Built motorcycle industry economic clu s ter s s ui ta ble to ea c h loc al
env ironm ent to achieve competitiveness boost exports and achieve global standards. TDAP must maintain a close contact with Trade Bodies for consultation to boosts exports in the SMEs. TDAP must provide a seat on board to PCMIC. Provide free display of Pakistani motorcycles to SME in Trade Fairs for at least two times to beginners. Provide free transportation of motorcycles for display abroad. More trade delegations may be sponsored by TDAP to boost exports especially in regional blocks. Discourage non-supportive government policies, high taxation, high-risk environment etc. for SME exporters. To boost exports and meet the demand at home, prudential regulations are not clear and not observed by banks. These must be fully explained implemented in letter and spirit also limit of 2 million prime minister youth loans must be raised to 5 millions for exporting motorcycle SMEs. Establishment of mo torcyc le in dus trial zon es for exporting motorcycle SMEs with 1, 2, 3 & 4 kanal plots provided on installments. Subsidy to SMEs on gas & electricity ma y be provided to m oto rcy cle exporters.
SUPPLY OF WATER,
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ELECTRICITY & GAS AT LOW TARIFF TO THE INDUSTRIAL UNITS: Electricity, water and gas are the integral parts of industries, play a very important role in production and price factors. The present rates are so high that exporters are facing difficulties to compete international markets. Frequent load shedding and electricity break down also cause delay in exporting their products in time. It is suggested that government should take concrete measures to provide continuous and uninterrupted supply of gas, water and electricity. It is also suggested that the rates of gas, water & electricity should be charged on the same scale as for the fertilizer industry in order to compete in the international market.
necessary funds should be extended for research and development.
SKILLED WORKER AND TECHNICIANS: While the industry in the country is up g r a d i n g a n d m o d e r n i z i n g it s m a n u f a ct u r in g a n d pr o d u ct i ve techniques with new and state of the art machinery, there is an urgent need for training the workers and technicians on the computerized machinery. Skill training centers adjacent to industrial a rea s s ho uld be esta blis hed o n permanent basis to ensure appropriate supply line of trained and skilled
The Government is very much keen to bring foreign and local investment in the country for the economic revival. In this regard, unless the tariff of inputs is reduced, it would not be possible. Therefore there is a dire need to reduce tariff of Electricity, Gas and Income Tax, Sales Tax etc, so that foreign and local investment may come out and Trade & Industries developed, creating job opportunities to unemployed youth of the country or five years tax holiday be provided to new industries in less developed areas bas an incentive.
CONSISTENCY IN TAX, TRADE & INDUSTRIAL POLICIES:
RESEARCH AND DEVELOPMENT: The research and development activity for promotion of exports is presently very low. In the new International trade regime, research & development have assumed great importance and have become necessary for survival of export trade. It is suggested that research & development should be made a strong focal point of textile trade bodies and
SPECIFIC ADMINISTRATIVE MEASURES INCENTIVES FOR INVESTMENT:
workers.
The first and foremost, surety that the I n d u s t ri a lis t s T ra d e rs n ee d i s consistency in the Tax policies. Time to time issuance of SROs by Bureaucrats uproots the In ves tmen t climate. SMUGGLING In order to combat smuggling it is suggested that on smuggled prone item, the Custom Duty should be levied at the rate of Ten
www.automark.pk | May-2014 | Page 34
Monthly AutoMark International Percent. Valuation rules be amended in accordance with WTO agreements. Pakistan China Motorcycle Industry Council (PCMIC) voiced strong support to the government in its efforts to increas e revenue collection an d streamline the taxation structure of the country. Submitting in detail PCMIC 2014-15 budgetProposals to Federal Board of Revenue (FBR ) PCMIC appreciated the ongoing engagement initiative of Chairman FBR Tariq Bajwa and Shahid Hussain Asad member Inland Revenue (IR). The PCMIC key recommendations consider restructuring taxation system to facilitate investment and economic activity, facilitate the honest taxpayers through timely settlement of issues, that all types of income are subject to tax, SRO’s are judicially eliminated an d documentation of the economy be accelerated without any compromise. Other key proposals discussed were low ering of corporate tax rates, elimination or rationalisation of minimum tax regime, faster processing of tax refunds, increasing incentives for attracting FDI and involvement of PCMIC in the exercise to review existing SROs to ensure minimum impact on FDI and continuing documentation of the economy. Mo re importan tly increas ed ta x collections should be made from those who have so far kept themselves out of the tax net to give confidence to the honest taxpayers and to take out the root cause of unethical busines s practices in the country. At the same time, PCMIC has also recommended that new taxpayers should be brought into the tax net by initiatives, which convince them about the benefits of paying proper taxes rather than th rough coercion or harassment. Presently, a very low taxpayers' base (about 1.0 million with a population of about 170.0 million) exist in the country. The filing of tax returns be made mandatory for persons who have a credit card in their name; have taken a personal loan from an y financial institution; travelled outside Pakistan during last financial year; members of a private club and own urban property of more than 240 square yards or equivalent or an apartment with covered area of more than 1,500 square feet.
For many manufacturing units and retail wholesale trade currently not in the tax net, following is proposed: Registration of units with the tax authorities which have either a commercial or an industrial utility connection. For retail outlets op eratin g w ith do mes tic u tility connections, the minimum size of 500 square feet is recomm en ded for registration. All this information is easily available and will lead to greater documentation of the economy, hence greater tax collection. The formal sector in Pakistan faces an unfa ir com pet itio n fro m t he undocumented sectors of the economy. Pakistan China Motorcycle Industry Council (PCMIC) supports an across the board implementation of the Value Added Tax (VAT). It further proposed that the real estate developers should be taxed on a per square foot basis for built up property and a per square yard basis on land developed for sale. However, houses constructed on plots of less than 100 squa re yards o r equivalent an d apartments with a covered area of less than 800 square feet as well as developed plots of less than 120 square yards in residential areas should be exempt from tax. This should only be available if the taxpayer does not already have a house, plot or apartment registered in his name. The PCMIC has also proposed measures to deal with the issue of across the board massive under invoicing, dumping of imported products. It is proposed that depending on industry input, values are fixed for import consignments; basis of valuation can be origin, weight, volume etc. For items prone to under invoicing and misdeclaration designate one or two ports (including the dry ports) for clearing of import consignments. This will allow better monitoring of the import consignments.
by Muhammed Yousuf Shaikh
Muhammad Yousuf Shaikh, An Auto Industry Cons ultant, Motorcycle Industry Expert, Motorcycle Designer, China S o u rc i n g Ex p e r t , S e r i a l Entrepreneur and the Founder & Chairman of Pakistan China Motorcycle Industry Council (PCMIC), offers his analysis of the motorcycle trade & industry trends from Pakistan & China. The Chairman PCMIC working with motorcycle trade & industry for over two decades, Yousuf believe that new projects could help motorcycle industry to design and produce new design, new tech & large displacement motorcycles in Pakistan to compete with Indian motorcycle industry as Pakistan offered exclusive incentives in taxation on new entrant to manufacture new design, new tech & large displacement motorcycle. For further details and for assistance please email at p a k c hi n a . mi c @ gm a i l . co m PCMIC Pakistan Office;79-A, Phase I, Sunder Industrial Estate, Behind PIE Head office, Lahore. Pakistan. Cell # +92 300 2613692 PCMIC China Office:-
Having a budget is simply a strategy for keeping your cost resonable and caluculated.
www.automark.pk | May-2014 | Page 35
: 0086 23 61729263 Skype live: yousufshaikh email:yousufshaikh@hotmail.com,pakc hina.mic@gmail.com www.globalautosources.com, www.facebook.com/PCMIC.org www.linkedin.com/in/yousufshaikh
AutoMark Magazine International
International News in brief by Salman Hanif
Hino Motors starts production in Malaysia Hino Motors Manufacturing (Malaysia) Sdn. Bhd., the Malaysian manufacturing subsidiary of Hino Motors, Ltd., held a line-off ceremony to celebrate the start of production at its new plant on April 17. Present at the simple ceremony were executives from UMW Toyota Motor Sdn. Bhd. and Assembly Services Sdn. Bhd., which had been producing Hino brand vehicles to date, as well as executives from MBM Resources Berhad (MBMR), Hino’s longtime partner in Malaysia. Also in attendance were Managing Director Ikuo Shibano, Hino staff and Hino Motors Sales (Malaysia) Sdn. Bhd. Managing Director Nobuyuki Tanaka. The new factory has adopted t he latest des ign s for employee safety. Malaysia is quickly growing as Hino’s third major ASEAN market, and is expected to continue growing as a major market after Indonesia and Thailand. As well as giving the company sufficient capacity to meet increasing demand, producing vehicles in this own new factory will help the company establish a supply system capable of flexibly accommodating market needs for a range of specifications and lead times. Hino is committed to contributing to the automotive industry and logistics of Malaysia, as well as the progress of its local communities. *Automark Magazine is not responsible for the content of this news release.
Fiat-Chrysler To Manufacture Jeeps In China
Scania to deliver 200 refuse trucks to Italy
Just nine months after the official groundbreaking ceremony, Hino Motors Manufacturing (Malaysia) Sdn Bhd (HMMMY) has rolled out the first Hino vehicle manufactured at its new plant in Negeri Sembilan.
Scania has won a public tender in Milan, Italy, to supply up to 200 trucks for refuse collection. The order includes service contracts for the vehicles. The trucks will be supplied to Amsa S.p.A., a provider of street cleaning and waste management services, which operates in both centralMilanand s urrou nding mun icipalities . The company issued the tender with the aim of strengthening the fleet of vehicles used by its urban refuse collection service. Scania and its bodybuilding partner Farid Industrie worked together on the tender application to produce a framework agreement for rear-loader trucks. The agreement will mean delivery of up to 100 diesel trucks and up to 100 compressed natural gas (CNG) trucks over a period of 24 months from the signing of the contract. The vehicles will be 3-axle Scania P-series trucks and
will be powered by a 9-litre 250 or 280 hp engine. “This order is extremely important as it represents further advancement of our relationship with both AMSA and Farid Industrie,” says Franco Fenoglio, Managing Director at Italscania S.p.A. “We will supply the client with a highquality product, tailor-made for this specific application. The Euro 6 engine range, which includes diesel and gas versions, is the perfect choice for operators with strict environmental sustainability demands.” The vehicles are covered by service contracts through Scania’s workshop network. The close collaboration with Farid In dustrie has allow ed Scania to significantly increase its market share in the public and special-purpose segments in Italy over the past 18 months.
Fiat-Chrysler officially announced on last month a deal with Guangzhou Automobile Group Co., Ltd. in China, which will now enable the former to manufacture three variations of the Jeep brand in the country by 2015 The plans involve the investment of $755 million, or 4.7 billion yuan, in a new plant that should boost production by 60,000 vehicles.
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AutoMark Magazine International
A Toyota Levin car on display at the China International Exhibition Center during the Beijing International Automotive Exhibition in Beijing on April 20, 2014.
Toyota considers expanding China production capacity Toyota Motor Corp is considering
Jaguar Land Rover to start car assembly in China British luxury car maker Jaguar Land Rover (JLR) is reportedly planning to commence operations at a local car assembly plant in China by the end of 2014. The move would allow the car maker to evade 25% import tariff levied by China and also increase sales by capitalizing on the growin g Chin ese market. The company is planning to build Range Rover SUVs at the plant, in collaboration with its Chinese venture with Chery Automobile and make it available by early 2015. Jaguar Land Rover China President Bob Grace said the company started to make the first prototype bodies this week, and it is almost a miracle that has come out of the ground in such a short period of time. "It's going to be a product from the Land Rover stable, so it's going to be an SUV," Grace added. W ith the commencement of local production, the company is expected to decrease prices by 15%, while the plant is expected to have an initial production capacity of 130,000 vehicles per year...
significantly expanding its production capacity in China as is seeks to catch up with global rivals in the world's largest auto market, a senior executive said on last month. Toyota, the world's largest carmaker, is aiming to double sales in China to two million vehicles, a figure its China chief Hiroji Onishi said was the "minimum level" necessary to keep up with market leaders Volkswagen AG and General Motors Co. He did not set a timeframe for the increase. "Because of the stronger push made by the US and European automakers, our sales volume has been growing but our market share has been reduced to nearly half of what it was before," Onishi told reporters at the Auto China car show. "Our honest feeling is that we have to do something about our reduced presence," he added, without giving a figure for the production
increase. Toyota currently has an annual vehicle production capacity of around one million vehicles in China. It operates join t v en tures w ith Ch ina FAW Group Corp andGuangzhou Automobile Group . O nishi said Toyota could expand capacity via existing facilities located in lan d, such as Chan gchu n a nd Chengdu. He did not give a cost estimate. Toyota is planning to introduce at least 15 new or redesigned models in China by end-2017, an executive said on Sunday. It will also start manufacturing and selling Corolla and Levin sedans with a locally made gas-electric hybrid system in 2015. Toyota expects hybrid models to account for about 20% of the sales of its Corolla series, which include the Levin, in the future, Onishi said. Toyota last year sold around 150,000 cars in the Corolla series in China.
Micro Car opens first assembly plant in Sri Lanka
S ri Lanka-base d auto parts manufacturer Micro Car has opened a new motor car assembling plant in Polgahawela export processing zone. The new facility, which represents the company's first and only car assembling plant in the region, was opened by Sri Lanka President Mahinda Rajapaksa. According to the Micro Car chairman Lawrence Perera, the new plant will have the facilities to assemble 2,800 vehicles per month. With the launch, the car maker expects
to save reduce the costs of saving money spent by manufacturing vehicle spare parts within the country. Additionally, the export of parts to Nepal, Pakistan, Bangladesh and Maldives is expected to provide foreign revenue to the nation. Fo un ded in 1995, t he co mpa ny manufactures vehicles such as the 1000cc four cylinder gasoline engine Micro Privilege, Micro MPV Junior van and the Micro Trend hatchback...
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MADE IN PAKISTAN MOTORCYCLES RETAIL PRICE LIST
70cc Motorcycle Sr./ No. 1. 2. 3. 4. 5. 6. 7.
Product & Model Name Dhoom YD-70 Hero RF-70 Hero RF-70 Plus Honda CD-70 Honda CD Dream Hi-Speed SR-70 Ravi Premium R1
Retail Price Rs. 50,400/= Rs. 46,000/= Rs. 47,000/= Rs. 68,500/= Rs. 72,500/= Rs. 43,000/= Rs. 46,950/=
125cc Motorcycle No. Brand & Model Name 1. Super Star SS-125 2. Super Star SS-125 DLX 3. Honda CG-125 std Euro II 4. Honda CG-125 DX 5. Ravi Storm 125 Model 2014 6. YD Sports 125cc
Retail Price Rs. 59,000/= Rs. 67,000/= Rs. 99,000/= Rs. 119,000/= Rs. 112,000/= Rs. 10,6000/=
Suzuki Motorcycle (Heavy Bikes) Sr./ No. 1. 2. 3. 4.
Product & Model Name Inazuma GW 250 Intruder M800 Hayasuba GSX1300R Bandit GSF650SA
Retail Price Rs. 725,000/= Rs. 1,600,000/= Rs. 2,500,000/= Rs. 1,500,000/=
Sr./ No. 8. 9. 10. 11. 12. 13. 14.
Product & Model Name Ravi Hamsafar-70 Sitara GT-70 Super Star SS-70 Super Power SP-70 Super Power Delux Unique UD-70 Bionic AS-70
Retail Price Rs. 45,450/= Rs. 40,000/= Rs. 44,000/= Rs. 44,700/= Rs. 48,200/= Rs. 44,000/= Rs. 44,500/=
100cc Motorcycle No. 1. 2. 3. 4. 5.
Brand &Model Name Honda Pridor Super Star SS-100 Super Power SP-100 Yamaha YD100 Mini Yamaha Junoon 100cc
Retail Price Rs. 84,000/= Rs. 57,000/= Rs. 60,000/= Rs. 65,500/= Rs. 79,300/=
Suzuki Motorcycle Sr./ No. 1. 2. 3. 4. 5.
Product & Model Name SD110 Sprinter ECO SD110 Sprinter ECO Del
SD110 Raider GS-150 Euro-II GD 110 Euro-II
Retail Price Rs. 88,400/= Rs. 83,400/= Rs. 96,000/= Rs. 119,500/= Rs. 109,900/=
www.automark.pk Price update: May-2014 www.automark.pk | May-2014 | Page 38
Car / Light Vehicle Price List www.automark.pk SUZUKI Model Model WAGON-R VX 1000cc Euro II WAGON-R VXR 1000cc Euro II WAGON-R VXL 1000cc Euro II MEHRAN VX 800cc Euro II MEHRAN VXR 800cc Euro II SUZUKI SWIFT 1.3L DX SUZUKI SWIFT 1.3L DLX SUZUKI SWIFT 1.3L Automatic CULTUS EFI VXR Euro II LIANA 1.3L RXI MT PETROL LIANA 1.3L RXI MT (CNG) BOLAN VAN VX 800cc E2 BOLAN VAN VX 800ccm (M)E2 SUZUKI VAN CARGO Euro II RAVI PICK-UP STD 800cc E2 RAVI PICK-UP STD 800cc (M) E2 APV 1.5L GLX MT (Petrol)
HONDA Price Price Rs. 899,000 Rs. 1049,000 Rs. 1089,000 Rs. 620,000 Rs. 678,000 Rs. 1,221,000 Rs. 1,282,000 Rs. 1,418,000 Rs. 1,034,000 Rs. 1,365,000 Rs. 1,444,000 Rs. 695,000 Rs. 7000,000 Rs. 666,000 Rs. 637,000 Rs. 642,000 Rs. 2,418,000
Model Honda Aspire Manual Honda Aspire Prosmatec Honda City Manual 1300cc Honda City Prosmatec 1300cc HYUNDAI Honda Civic VTI Manual 1800cc Honda Civic VTI Manual SR (Oriel) Honda Civic VTI Prosmatec 1800cc Honda Civic VTI Prosmatec SR (Oriel) Honda CR-Z Sports Hybird Manual Honda CR-Z Sports Hybird Automatic
TOYOTA COROLLA Model XLI VVT-i 1.3 M/T 1299cc Petrol XLI VVT-i LE 1.3 M/T 1299cc Petrol GLI VVT-i 1.3 M/T 1299cc Petrol GLI VVT-i 1299cc LE 2.OD STD 2000cc ALTIS 1.6L Dual VVT-i M/T ALTIS 1.6L Dual VVT-i MT SUNROOF ALTIS 1.6L Dual VVT-i AT ALTIS 1.6L Dual VVT-i AT SUNROOF Toyota Avanza (Up Specfication) Hiace Commuter STD 3.0L Diesel Hiace Commuter STD 2.7L - GASLOLINE Sportivo, 1600cc M/T Sportivo, 1600cc A/T Fortuner 2700cc petrol
PM Auto Industries (Pvt) Ltd. Model Faw Truck Super 3 Ton (3200cc) Faw Truck Prime 2 Ton (2600cc)
Price Rs. 1,260,000 Rs. 1,034,000
Sokon - Mini Truck (1050cc) DFSK - Mini Truck 2700MM Deck DFSK - Mini Truck 2500MM Deck DFSK - Mini Truck (Double Cabin-AC) 1400MM Deck Introductory Price DFSK - Mini Truck (Double Cabin Non-AC) 1400MM Deck Introductory Price
Rs. 763,000 Rs. 731,000 Rs. 950,000 Rs. 900,000
Sokon - MPV 11 Seater (1300cc) DFSK - MPV 11 Seater (Without AC) Rs. 1,034,000 Rs. 1,084,000 11 Seater (Dual AC)
Model
Sokon - Cargo Van 1050cc DFSK
Rs. 938,000 Rs. 840,000 Rs. 977,000 Rs. 740,000 Rs. 685,000
Tractor Euro Ford 85 HP Tractor Euro Ford 60 HP Tractor Euro Ford 50 HP Price List - Ex Factory (Hyderabad)
Price 1,542,500 1,557,500 1,682,500 1,712,500 1,855,800 1,912,500 2,007,500 2,012,500 2,102,500 2,575,000 3,433,000 3,433,500 2,109,000 2,217,500 5,748,500
Price
Brand New Toyota Hilux Pickup, 4x2, 2500cc Single Cabin, White only, Hilux STD
DAIHATSU
Dual AC - Power Steering+ Power Window
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Hilux Pickup 4x2 sc
11 Seater (Dual AC-Power Steering) Rs. 1,134,000 11 Seater (Dual AC - Power Model Price Rs. 1,145,000 Steering +Power Window)
Sokon - MPV 07 Seater (1050cc) DFSK Without AC Rs. 817,000 Rs. 887,000 With Dual AC Dual AC - Power Steering Rs. 928,000
Price Rs. 1,672,000 Rs. 1,814,000 Rs. 1,522,000 Rs. 1,663,000 Rs. 2,035,000 Rs. 2,267,000 Rs. 2,156,000 Rs. 2,388,000 Rs. 3,286,000 Rs. 3,366,000
Rs. 1,859,500
Hilux Pickup 4x4 E Model
Price
Toyota HILUX 2494cc, Diesel Turbo Charger Common Rail Engine, 4x4 Double Cabin - Standard Model
TOYOTA VIGO DAIHATSU Model Model
Price Price
Rs. 3,109,500
AL-HAJ FAW MOTORS Model
Vigo Champ M/T Rs. 3,423,500 FAW Carrier (WHITE ,BLACK,STRONG BLUE & SILVER) FAW X-PV Std Vigo Champ A/T Rs. 3,623,500 FAW X-PV A/c (WHITE ,BLACK,STRONG BLUE & SILVER) Sirius S80
Monthly AutoMark Magazine - International
Price Rs. Rs. Rs. Rs.
699,000 799,000 844,000 1699,000
Price updated May- 2014
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May-2014
International Heavy Duty Trucks - Update
Russian market of Heavy Duty Trucks Heavy duty Trucks market review (based on 2011 result) Total market of New Heavy Duty Trucks 86,200 units including: Local brands 53,000 Units European brands 27,000 Units Other 6,200 Units In local brands Kamaz is the leader with 31,639 Heavy Trucks with GVW > 16t. Totally Kamaz produced 39,073 and 38,273 of them are in the range of GVW from 14t to 30t. Average enduser price for Kamaz truck is 55,000 USD. It seems that Kamaz have a good lobby in the government as they are getting favorable taxes and practically 100% orders for army. Second in locals is Byelorussian MAZ with 14% share of the market. There a lot of rumors that Kamaz ans MAZ are going to do a joint venture. Third is Uralaz with 9% of the market. The loss of the military contracts may have dare consequence for Uralaz. MAN is the leader of European brands sales in Russia with more the 7,000 Units. Second is Scania with 6,800 Units; Volvo 5,400 Units; Mercedes 2,900 Units; Iveco 1,980 Units; DAF 1,900 Units; And Renault 1,200 Units; 4,400 Used Heavy trucks where imported to Russia. The leader if Volvo with 960 units. 162 units where imported from USA with average price 70,000 USD.
www.automark.pk | May-2014 | Page 41
Than You Think
Exclusive Article by Owais Khan
D
espite the fact the local assembly of hybrid cars cannot become a practical realit y, Pak istan Au to mo t ive Manufacturers Association (PAMA), a body formed to look after the interest of local auto industry, has taken up the case of hybrid vehicles import. The peanut import of Hybrid vehicles especially by the Indus Motor Company (IMC) is certain ly not an effort or a milestone that will open new job avenues or bring new investment but its import will only drain out c o un tr y’ s s o m e p re ci ou s fo r eig n ex ch an g e. Th e impo rts are unlikely to cross the 100 mark this year as assemblers are not getting an y pos itive res pon se fro m the customers. By always criticising used car imports and its lobby, what PAMA is doing now is a sheer surprise just to defend the case of import of new hybrid vehicles by IMC and Honda Atlas. There must be a big difference in the working of the loca l in dustry a nd the us ed car importers. These two car assemblers have always strongly lamented the import of used cars under various schemes but these assemblers have remained active in
importing brand new vehicles of higher engine powers just to cater the need of a particular class instead of paving the way for assembly of these costly vehicles. The assemblers introduced cars like Toyota Camry, Rav 4, Land Cruiser, Land Cruiser Prado, Toyota Avanza, Daihatsu Terios, Honda CR-V and Honda Accord, but failed to lure elite class due to their very high prices. Perhaps, PAMA DG has never taken up the case of import duty and taxes on the a bov e c os t ly v eh icles w it h th e government but this time he is more serious to see hybrid vehicles plying on the roads in larger numbers. By seeing lukewarm response of Toyota Hybrid and Honda Hybrid from the customers, Director General PAMA, still wants hybrid vehicles becoming more affordable for the filthy rich consumers. According to him it is only possible when the government will amend the SRO499(I)/2013. He is trying to twist the SRO just to show how important hybrid veh icle is for Pakistani and few customers. Whenever journalists dare to question DG PAMA or senior auto industry executives about introduction of new models in Pakistan, the reply came from these auto geniuses and experts is loaded with ifs and buts over future survival of
new models based on volumes and its market price. Here a question arises how PAMA is making a case for hybrid vehicle import on behalf of the local industry despite its uncertain and low future sales prospects. PAMA DG believes that amending SRO in favor of the industry will fetch additional revenue for the government on import and sale of such vehicles. But DG PAMA did not elaborate how much volume of hybrid car import he anticipates that could bring revolution in revenue generation for the cash starved government. He also did not give details about foreign exchange spending in case demand for such costly vehicles goes up. What DG PAMA here actually means amending SRO in favor of the industry as it seems that he is trying to give an impression that the industry actually produces hybrid vehicles in Pakistan or intends to make huge investment to roll out costly vehicles soon in future. Looking forward to see thriving imports of hybrid vehicles, DG PAMA has submitted proposals of the local auto industry for budget 2014-15 to the government dem anding that the industry needs relief in sales tax at both import and supply stage of hybrid
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Monthly AutoMark Magazine International vehicles as this concession will lead to the improvement of demand for new hybrid vehicles introduced by OEMs backed by complete warranty and after sale support to protect consumer rights. It is worth adding here that under SRO 499(I)/2013 Hybrid vehicles are allowed to be imported at a concessionary rate to duties and taxes in Complete Builtu p Un it (CB U) con d ition on ly. The present concession applicable duty s tructure in this regard is: 1 00% for upto 1 200cc; 50% for 1201cc to 1800cc; and 25% for 1801 to 2500cc. D G P a m a f u rt h er s t a t ed t h a t discrimination in the application of sales tax on sale of Hybrid Electric Vehicles (HEV) is providing undue advantage to undocumented sector which should be eliminated and a level playing field be created for everyone. It is to be noted that through SRO-499(1)/2013 a relief from custom duty, sales tax and income tax was provided only on the import of Hybrid Electric Vehicles and not at the retail stage. However, local sale of these vehicles by a registered person is subject to sales tax at normal rate i.e. 17 per cent. ‘There is, therefore, a discrimination that import by an unregistered dealer will be cheaper than import and local sale by the OEMs. This has led to disadvantage to registered persons, while importers of used vehicles get full relief at import stage, thereby helping undocumented sector at the expense of registered p er s o n s ,’ r ea s o n ed D G PA M A. Market experts expressed surprise over the seriousness of PAMA in forwarding the case of hybrid imports whose only
beneficiary can be counted on fingers and it will only prove a dent to the foreign exchange reserves. They said has PAMA ever taken up the case of Pak Suzuki Motor Company Limited (PSMCL) for assembling decades old models and continuously raising the prices on Yen-Dollar-Rupee parity excuses and also not achieving required localization targets especially in Suzuki Mehran, Suzuki Bolan and Suzuki Cultus. Why PAMA did not qu es tio n Pak Suzuk i an d o th er assemblers for not sharing price cut when the rupee gains strength against Yen and Dollar. Instead the assemblers were quick enough to raise prices on rupee depreciation against major currencies. Since these three models are not available and assembled in other parts of world, it is very hard to justify the prices being charged by its assemblers in local currency. Perhaps in PAMA’s dictionary and opinion, this is called higher localization in which vendors of these three cars have been making same parts for three decades and surprisingly the localization levels in Mehran and Bolan were confined to 70 per cent for same period. Sources said that the concern ed industries officials in the previous and current governments have shown serious disappoin tment over th e existence of Mehran especially but its assembler is pow erful enough to continue its assembly without any fear of being questioned and grilled by the government. W hy PAM A was silent when the assemblers were taking full payment of cars booked by the customers and taking four to six months time to handover the
L ooking forward to see thriving imports of hybrid vehicles, DG PAMA has submitted proposals of the local auto industry for budget 2014-15 to the government demanding that the industry needs relief in sales tax at both import and supply stage of hybrid vehicles as this concession will lead to the improvement of demand for new hybrid vehicles introduced by OEMs backed by complete warranty and after sale support to protect consumer rights. vehicles. Taking the case of Hybrid vehicles shows the upper hand of IMC and Honda Atlas on the PAMA. Officials in car industry said that actually the government had opened the way for the industry to import hybrid cars by providing relief in duties and taxes in the last year’s budget. So putting blame on the industry for encouraging imports of such costly vehicles does not make any sense. The industry is just following the guidelines of the government on hybrid car import policy. Here experts said that the government have also asked the assemblers so many times to reduce prices, improve quality, lower delivery timing, check premium charged by authorized dealers and improve localization. What efforts have been made by the assemblers in this regard...
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