Automark magazine sep 2013 by Mustafa Hanif

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

AUTOMARK Editor M. Hanif Memon Technical Editor Muhammad Shahzad

Advertising Manager Tahir Siddiqui

Circulation Manager Abdul Khaliq

Graphic Designer Salman Hanif

Web Master Murtaza Hanif

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

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

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

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

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

Pakistan industries require education and training pathways In Pakistan, many of small as well as big industries require education and training pathways, which stretch from school through to vocational and higher edu cat ion. These indu stries are underpinned by advanced research. What are the key skills that will define the economic needs for Pakistan; how are they contributing to economic growth and what role do industry and education system play in the new skills agenda? Can national policies drive forward best practice or should this be a marketdriven approach? Innovation has always been the driving force and inertia behind development in many sectors which have stirred a global change, be it healthcare or technology. However, education, which is the bedrock of all sorts of development, has been left behind as far as innovation is concerned. This goal of achieving global innovation in education has also been furthered by raking in key players from political arena and at government level in all countries as truth be told: education alone cannot subsist and grow without support from all sectors involved in governance. It would not be an under-statement to say that the world will see the education revolution in a few years to come. Industrial technology is the use of en g in e eri n g a nd ma n uf ac t u ri n g technology to make production faster, simpler and more efficient.The industrial technology field employs creative and technically proficient individuals who can help a company achieve efficient and profitable productivity.

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CONTENTS

Monthly AutoMark PAAPAM / CBI Workshop on Market Research at Karachi & Lahore

100 days of agony and ecstasy An Exclusive article by Ali Hassan on Motorcycle sector

14-16

Pakistan’s Power Crisis & Double Standard of Punjab Chief Minister An Exclusive Article by Asif Masood

17-18

AMANTECH A Vocational Training Institute for All! An Exclusive review by Shahzad Tabish

19-43

A tough FY14 for local car assemblers An Exclusive article by M. Owais Khan

20-21

Auto industry suffering aftershocks of used cars imports & amnesty schemes Paapam point of view

Customer feedback is the most effective marketing tool.... By Mohammad Shahzad from Canada

24-26

International Automotive news

31-32

Suzuki Used Car Gala 33 A Win-Win Deal for the OEM & Refurbished Car Consumer Market An Exclusive review by Shahzad Tabish The Motorcycle Industry Pakistan: Investment Opportunities and Prospects (Last Part) Exclusive Report by M. Yousuf Shaikh

37-41

Passenger cars/light vehicle price list

An Exclusive Article about Digital Speedometers Technology by Ali Baig from Lahore

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PAAPAM / CBI Workshop on Market Research at Karachi & Lahore

LAHORE - A two-day workshop on market research, organized by Pakistan Association of Automotive Parts & Accessories Manufacturers and Centre for the promotion of imports from developing countries (CBI), was held on Aug 29, 2013 in Lahore. Marcel de Vink, Ambassador of Royal Netherland Embassy Islamabad, inaugurated the workshop. Ms Suzanne de Groot, First Secretary Political Affairs, Royal Netherlands Embassy, was also present. T he e nv oy a ss ure d c on t i n u ed cooperation for boosting exports from Pakistan. The same workshop was also held on 26 & 27 August in Karachi. Training Institute is the partner with CBI for conducting this workshop, which has already been conducted for target companies in Karachi, earlier this week. PAAPAM Chairman Munir Bana, and Vice Chairman Usman Malik, on the occasion, elaborated on the future activities of Training Institute, and how

it plans to meet the specialized skill needs of the auto sector. Chairman Munir Bana said that the market research workshop will provide Pakistan exporters knowledge, skills and tools to collect and analyze data regarding EU markets, target groups. This workshop will educate exporters and manufactures to export to EU. Trainers of the workshops are Imtiaz Rastgar, CBI Chief Representative and Zaheeruddin Dar, CBI External Expert. They are also involved, on behalf of the

CBI, in a program for capacity building of Business Support Organisations including TDAP, EDB, PAAPAM, NPO, SMRDA and PFA for promoting export of engineering goods from Pakistan. CBI is an agency of the Netherlands Ministry for Foreign Affairs. It contributes to the equitable economic development of the selected developing countries, including Pakistan. Export Coaching Program of the CBI trains Pakistani exporters. The Engineering Sector Export Coaching Program has 28 Pakistani companies, being prepared for exports to Europe as well as neighbouring countries. The companies are from machinery building, auto parts, metal components, plastic, rubber, steel forgings, process equipment etc. There are several companies from the previous programs who have become successful exporters of packaging machinery, processing equipment, auto parts, forgings and castings.

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Exclusive Article by M. Ali Hassan

Ministry of Industry Government of Pakistan

- Yamaha investment should be resolved amicably in larger interest of employment generation and revenue earning to the government. - Finance minister should also look into the issues of incorrect declaration, under invoicing and smuggling. - All zero rated imports must be fixed at minimum five per cent customs duty - Customs duty on CBU two wheelers – currently over 50% should be not more than 45 per cent - Government should bring a change by abolishing the SRO culture as Finance Minister promised in his budget speech - Lists for import issued through EDB to the assemblers should be abolished immediately - The government should abolish this condition from buying parts from commercial importers for the assembly of motorcycles - The government lists for import issued through EDB to the assemblers should be abolished immediately

Monthly AutoMark Magazine

100 days of agony and ecstasy Pakistan’s new government should take on board all stakeholders and market players while formulating new policies related to the auto sector, the APMA chief said. The Association, he said, has been trying hard for the last 10 years that Pakistan could be able to produce other than 70cc bikes but so far it has failed due to non-cooperation of the government. Old faces and policy makers are still dominating which are against in bringing any change in the two-wheeler segment. The PML-N government has completed its 100 days which according to various businessmen and industrialists are more or less same as prevailing in the last 10 y ea rs i nv o l v i n g t w o d i ff er e nt governments. There has been no change in the Customs and Federal Board of Revenue (FBR) especially in their policies. The PML-N government after coming into power had promised to do away with the SRO culture in the country but in its last 100 days the auto sector continued to rely on the same SROs and notifications. Same is the case with the concerned ministries covering auto sector as they are not responding to the problems of the industry despite repeated attempts. According to Mohammad Sabir Shaikh, newly elected Chairman of Association of Pakistan Motorcycle Assemblers (APMA) f or 201 3-2014, put responsibility on the various groups that hold Chambers and the FPCCI and have made a club of few known members who are not real representatives of business community. They literally influence the officials. He said that businessmen belonging to a particular group have been holding the main seats of presidents and chairman of various trade bodies and associations who have their own interest rather than serving the cause of entire business community. He said it is an easy job to find the real

representatives of the business community in every city but it all depends on the government’s sincerity to acknowledge their presence by calling them in every meeting. Corrupt businessmen usually grease the palm of corrupt officials of various mi ni s tr i es w hi ch is t h e mai n impediment in revenue shortfall. He said the ministers should give chance to those businessmen who always speak for country’s benefit and entire business community. By taking advice from genuine businessmen the government will fetch more revenues besides production and employment will also i mpr ov e, Sabi r S haik h add ed . Pakistan’s new government should take on board all stakeholders and market players while formulating new policies related to the auto sector, the APMA chief said. The Association, he said, has been trying hard for the last 10 years that Pakistan could be able to produce other than 70cc bikes but so far it has failed due to noncooperation of the government. Old faces and policy makers are still dominating which are against in bringing any change in the two-wheeler segment. For instance, Yamaha Japan is trying hard to make a big investment in Pakistan to take a slight share in the 10 per cent market of over 100cc bike which is quite risky in terms of big investment. He said that the government officials

- EDB should made public a list of those assemblers who have introduced the EURO II www.automark.pk | August-2013 | Page 14

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Monthly AutoMark Magazine

Exclusive Article - continued

All zero rated imports must be fixed at minimum five per cent customs duty. All the Input Output Ratio Certificates (IORCs), which are valid up to June 30, 2013 should not be revalidated and one customs duty on imported parts and one customs duty on CBU imports should be fixed at 25 per cent. Currently non localized parts have 10 per cent customs duty and while on localized parts it is 38.75 per cent. He added that customs duty on CBU two wheelers â&#x20AC;&#x201C; currently over 50% should be not more than 45 per cent. Customs authorities in the last 10 years have caused a stir in the taxation system by introducing valuation advices/rulings of different items. are not ready to take serious the new Japanese investment due to some kind of pressure from the existing players. In a strange move, Finance Minister Senator Ishaq Dar in the third week of August assured top officials of Yamaha motor company of Japan that its case of setting up a motorcycle plant with an investment of $150 million near Karachi would be taken up at the next meeting of Economic Coordination Committee (ECC) to resolve all issues leading to installation of the plant without further delay. Yamaha plans to start production of 100cc and above bikes from 2015. Yamaha officials had been running from pillar to post for the last four years to install the Yamaha motor-cycle plant, and it was only recently the process of setting up the plant has picked up with the present government coming into power. The finance minister regretted the delay, and said his government is committed to faci litate f oreign investment and would ensure that a smooth process was laid out to facilitate investment in the country. Japan had also showed his concern on security issues and the problems being faced by the existing Japanese investors and new potential investors in Pakistan. Yamaha would start production from 25 per cent localization and then achieve 85 per cent localisation in five years. After next few days of this assurance, the Japanese embassy rejected recent decision of the ECC of the Cabinet on "New Entrant Policy." Akira Kono, Japanese Charge d' Affaires, in a letter to the Finance Minister, expressed disappointment over the ECC decision.

position where they may have to abandon their planned investment in this country," he added. The top Japanese diplomat said the decision appears to have added the following elements to the New Entrant Policy: (i) the minimum investment entitled for this policy would be 100 million dollars up to the commercial operation date and, (ii) new technology will be defined by the Engineering Development Board (EDB) and recommended by a Committee comprising Chairman, BOI, Secretary Commerce, and Secretary Industries and have to be approved by the ECC.

before they start commercial operation is beyond its scope and capacity. Sabir Shaikh said that the issue of Yamaha investment should be resolved ami cabl y in larger i nterest of employment generation and revenue earning to the government. At least somebody is trying to bring new models from the current decades old models. He said the finance minister should also look into the issues of incorrect declaration, under invoicing and smuggling. The government can earn over Rs 100 billion per annum if the government makes the necessary changes in the policy of the auto sector. Currently this amount is going to waste owing to incorrect policies. The retailers are not against the imposition of sales tax, but actually the manufacturers, importers, smugglers are against this move. In the last 10 years, there was huge evasion and under invoicing of imported parts due to non registration in sales tax regime by auto sector dealers. All zero rated imports must be fixed at minimum five per cent customs duty. All the Input Output Ratio Certificates (IORCs), which are valid up to June 30,

Japanese embassy maintains that the decision on minimum investment level makes it impossible for Yamaha Motor Co Ltd to enter the Pakistani market. In the investment plan Yamaha developed in close consultation with the Board of Investment, a $150 million investment in phases over According to a newspaper report "The several years was discussed and decision made by the ECC on August that too only if the market 22, 2013 on New Entrant Policy in conditions allowed. In the view motorcycle industry seemingly has put of Yamaha Motor Co Ltd, Yamaha Motor Co Ltd in a difficult investment of 100 million dollars www.automark.pk | September-2013 | Page 15

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Monthly AutoMark Magazine

Exclusive Article - continued

The entire auto sector is burdened with too many SROs and notifications. There should be just one policy document or the SRO or notification for entire auto sector to discourage corruption. He said another issue with the industry is that exports refunds for many industries has been in doldrums as the Afghan Customs had been computerized. Currently, they do not provide any document on the clearance of goods to Pakistani exporters. 2013 should not be revalidated and one customs duty on imported parts and one customs duty on CBU imports should be fixed at 25 per cent. Currently non localized parts have 10 per cent customs duty and while on localized parts it is 38.75 per cent. He added that customs duty on CBU two wheelers – currently over 50% should be not more than 45 per cent. Customs authorities in the last 10 years have caused a stir in the taxation system by introducing valuation advices/rulings of different items. One can fix the valuation of any item at lower end by bribing the officials, Shaikh said, adding that market players also bribe officials to get the valuation fixed at higher side of the competitors. Sabir said that the government should bring a change by abolishing the SRO culture as Finance Minister promised in his budget speech. The government lists for import issued through EDB to the assemblers should be abolished immediately as it’s a cumber some and time consuming exercise. The entire auto sector is burdened with too many SROs and notifications. There should be just one policy document or the SRO or notification for entire auto sector to discourage corruption. He said another issue with the industry is that exports refunds for many industries has been in doldrums as the Af ghan Cu stoms had been computerized. Currently, they do not provide any document on the clearance of goods to Pakistani exporters. The government should find a way to resolve the issue otherwise exports of bikes and other products would continue to suffer. The EDB has observed that majority of assemblers after enrolling under SRO 656/2006 obtain manufacturing certificate and a controversial list of importable components. Subsequently, t hey resort to procu ring their parts/components from commercial

thriving vendor base relating to production, sales and market share be taken into account before finalizing a new policy for the entire auto sector, another Chinese bike assembler stated.

Engineering Development Board Implementation of EURO II Standards importers/traders instead of direct imports. The government should abolish this condition from buying parts from commercial importers for the assembly of motorcycles. Currently, a number of assemblers are procuring smuggled parts from the markets due to the above condition. This kind of procurement leads to illegal assembly and results in substandard production of vehicles. It also creates an uneven playing field for genuine players. Most importantly, firms engaged in such unscrupulous activity are putting a colossal loss dent on national kitty through evasion of duties and taxes. He was of the view that increases in taxes and duties would improve revenue and bring many sectors into the tax net. However, businessmen had already warned the government not to impose any fresh taxation as it would only trigger inflation and the cost of doing business. But the new government has not come up with any changes in the policy despite the passage of two months. The government has also not called upon any meeting with Chinese bike assemblers yet to discuss future road map of the two wheeler industry. Chinese bike assemblers’ body (APMA) and various Chinese vehicle manufacturers had failed to get representation in policy making. It is high time that the development of Chinese bike assemblers and their

The EDB has asked every two, three and four wheeler assemblers to produce EURO II standards vehicles. How many assemblers have really followed this instruction issued by the EDB. Sabir Shaikh said the EDB should made public a list of those assemblers who have introduced the EURO II vehicles and also publish assemblers’ name for not complying with the government orders.

Provision of Production Data with Engine and Chassis Numbers The EDB has written a letter to all the two wheelers assemblers to provide production data with engine and chassis numbers. Chairman APMA has questioned the EDB as to why the government is enquiring about production data with engine and chassis numbers. “Has the EDB written any letter to the three and four wheelers or this letter is confined to only two wheeler industry,” he said adding that whether the SRO 656/2006 has any such provision. He said EDB is actually taking the decision on its own and under which authority or capacity the EDB is taking such one-sided decisions. Pakistan also produces television, domestic appliances, bicycles and many other electrical items. “Has the EDB sought production, item number and sales data from their producers,” he added...

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An Exclusive Article by Asif Masood

Monthly AutoMark Magazine

Pakistan’s Power Crisis & Double Standard of Punjab Chief Minister It is a matter of great regret that the people still not getting justice and constitutional rights and instead of living in the Pakistan of Quaid-e-Azam and Allama Iqbal, they are living under great deal of difficulties because of load-shedding, poor policies and price hike. After looting the national kitty mercilessly the team of “Ali Baba & Forty Thieves” has given the charge and mandate to another “Ali Baba, with Eighty Thieves” for ruining the Pakistan’s economy to the core while the masses will remain be deprived of electricity and other basic needs from Khyber to Karachi. Mr Nawaz Sharif leader of Pakistan Muslim League (N), an elder brother of Chief Minister of Punjab has taken over the office of Prime Minister in early June this year, but the misery of Pakistani people has not been addressed by the New Government. Federal government is meting out a step-motherly treatment to whole of the Pakistan, and is punishing eighteen crore people for their love for Pakistan. Poor policies and plundering of rulers sitting in Islamabad has resulted raised problems like loadshedding, price-hike, unemployment and poverty for the masses, but this time Punjab Chief Minister Shahbaz Sharif has not organized a protest camp at Minar-e-Pakistan, which

shows the double standard of our leaders. During the last tenure of Pakistan People Party regime he said, he will continue to pursue the corrupt rulers, till the end of discriminatory and unequal loadshedding in Punjab. He said “he is not afraid to die, as life and death is in the hand of Allah Almighty, but his protest, against unequal load-shedding, would continue”. Now the query is why he has not protested against his elder brother and sit to protest in a hot weather for long. The national economy is being decimated, from Khyber to Karachi, but the gang of PML-N is looting and plundering national exchequer, with apathy and indifference. 18 to 20 hours long load-shedding in the country is an act of extreme cruelty and injustice against the people of Pakistan. The people of all over the country are still suffering anxiety and numerous ps ycho lo gical pro bl ems . The government of PML-N also throwing the country into financial instability, due to which unemployment, price hike,

anxiety and n u m e r o u s psychological problems and other issues, are being faced by the citizens. Just to refresh the memories o f Asif Masood Lahorities, Mr Muhammad Shahbaz Sharif, Chief Minister of Punjab, in last summer said, “that he will continue to work in tent Office, Minar-e-Pakistan, as it reminds him of the sacrifices rendered by the martyrs of Pakistan movement”. It is a matter of great regret that the people still not getting justice and constitutional rights and instead of living in the Pakistan of Quaid-e-Azam and Allama Iqbal, they are living under great deal of difficulties because of load-shedding, poor policies and price hike. Punjab is still reeling under load-shedding, whereas despite the fact that there are higher line losses in Karachi and Hyderabad than Punjab. The scourge of load-shedding is still not been removed by the new government and Chief Minister of Punjab has wheezed up his protest from Minar-ePakistan.

POL Product – Petroleum Price Hike How the new government of the PMLN can control the extortion mafia when the authorities themselves collecting ‘bhatta’ from the poor masses in the shape of exorbitant hike in electricity and oil prices. The people of the country were hopeful of some positive change after the so-called business friendly regime took over the country. The practices of the government will not be

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An Exclusive Article by Asif Masood able to put economy back on rails in presence of mounting oil prices, that has not only jacked up the cost of doing business but also adding to the miseries of common man. Most of the organizations urged the government to make more investment in oil exploration projects as new discoveries would be doing a great help in tackling the oil price issue. There is no denying, fact that oil prices were on the rise in the international market but instead of passing on this surge to masses, the government should cut the number of taxes on petroleum products as the fuel is the engine of growth. If the fuel would be heavily taxed the entire economy would suffer. Pakistan’s inflation rose 8.5 per cent in August 2013 from a year ago, the highest increase after 13 months. Inflation, measured through Consumer Price Index (CPI), increased by 1.2pc from the previous month, reflecting the impact of taxation and increase in oil prices in domestic market, suggested data of Pakistan Bureau of Statistics. Since June 2013 the prices of manufactured items are on the rise because of increase in the sales tax rate from 16pc to 17pc and imposition of withholding tax on various products in the budget 2013-14. Upward adjustments in prices of petroleum products in the last two months further fuelled inflation. In the next few months, prices are expected to increase further due to the third consecutive hike in petroleum prices, the rupee depreciation and the electricity charges of industrial and commercial users, which are all likely to result in increased cost of production and also push up non-food inflation. The government has projected an inflation target of 8pc for 2013-14 fiscal year compared to 7.38pc in the year 2012-13. Core inflation, which is nonfood and non-energy inflation, rose 8.5pc in Aug 2013 from a year ago. Government will announce next monetary policy on September 9 to decide whether to increase the interest rate or reduce it further. In August, total food inflation was at 10.3pc from a year ago, non-perishable food items witnessed a surge of 8.70pc and perishable items increased 18.02pc in August over last year. Industrial goods recorded a massive increase during the last month validating the argument of an increase in prices in

the coming months. The price of food items, which registered increase, include: onions (70.08pc), tomatoes (45.05pc), fresh vegetables (27.18pc), wheat flour (27.07pc), wheat (26.78pc), chicken (26.03pc), tea (25.02pc), gur (21.69pc), wheat products (19.37pc), cigarettes (14.65pc), cereals (13.25pc), rice (13.21pc), potatoes (12.43pc) and beans (11.97pc). On the other hand, nonfood inflation witnessed an increase of 7.3pc in August 2013 from a year ago. This is mainly because of increase in the prices of petroleum products during the month.

Nandipur Power Project The agreement for the Nandipur project was signed in January 2008 and work was to begin in October the same year. However, the Law and Justice Division, approached in January 2009 for legal opinion on government guarantees, delayed the matter for two years and eight months until October 2011, causing cost and time overruns. So far, 60% work has been complet ed. The allegations came from a former managing director of Pakistan Electric Power Company (PEPCO), who accused the new government of being involved in a white-collar scam in the Nandipur power project and approached the Supreme Court for action.

Nandipur is the first power plant to be sponsored by the Government of Pakistan after the 1,350 MW Muzaffargarh plant started production in 1994. More than half the work on the plant has already been completed with all three gas turbines already installed at the site. Nearly all of the civil works, including foundations of gas turbine generators, heat recovery steam generators, construction of the central control building, transformer area, turbines hall, etc are completed. Financing by a consortium of foreign banks, including the Export-Import Bank of China was agreed in 2008 and nearly 400 Chinese workers continued to be on standby at the site

Monthly AutoMark Magazine until recently. But the good news ends here. Work is at a standstill for over a year. About 17,000 tonnes of high-tech machinery is gathering dust and rust for over six months at the Karachi Port. PEPCO has already paid more than Rs 150 million as demurrage. Add the increase in financial cost on account of delay, cost of bringing back 400 demobilized Chinese workers, damage to equipment lying exposed to weather and ot her hazards at the port and you will have an idea of the manner n which direct costs alone are ballooning. The contract for this 425MW power project has been awarded to a Chinese company for $329 million, making it perhaps the cheapest thermal power project in the field. As a thumb rule, the cost of such projects is $1 million per MW. Upon commissioning, the existing tariff will be lowered on account of the cheaper power coming into the system. But after taking over the government the PC-1 cost has revised and the cost of the project has been increased to Rs 22 billion to Rs 57.38 billion. Which had been approved by the Executive Committee of the National Economic Council (ECNEC)? The new government of PML-N has also worn black armbands and was hoisting black flags and banners with various slogans. The sharif family is making mockery of the poor masses by sitting in the bunker in Islamabad & Lahore as if they are spectator to the nation’s sufferings. The load-shedding had given rise to the unemployment and the industrial sector was on the verge of collapse. The country has incurred losses to the tune of billions of rupees due to the crippling power outages and there is no end in sight owing to the wrong polices and corruption of the imprudent rulers,” most of the industrialist are still not finding themselves economically safe and shifting their business to countries for better future. Due to these crises the daily life has come to a standstill. Even more ominously the shortage is endangering the future economic and social prospects of the country, putting its very fabric under strain. In other words, it is not that life has come to a standstill. It has actually given way to degradation, chaos and death...

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Exclusive Review by Shahzad Tabish

Monthly AutoMark Magazine

AMANTECH

A Vocational Training Institute for All! Philanthropy is an act of God but without the human representatives who endeavor to step up in order to decipher the code of philanthropy for humanity the whole concept remains a myth itself. Allah Almighty chooses some amongst his beings to widespread this Act of God amongst the unfortunate suffering humanity. Talking about such noble representatives being a Pakistani & Karachiite I cannot forget a name known globally for being a business tycoon but deep within him hides a philanthropist & for sure I talk about Mr. Arif Naqvi. For those of my fellow countrymen unknown to the personality’s name, must be aware of a non-for-profit Organization named Aman Foundation. Established in the year 2008, the foundation is the result of a generous funding of US$ 100 million from Aman Trust which represents Mr. Arif Naqvi & his family. In this very short span of time Aman foundation has gained repute for every act of socio-economic development it started. Amongst the noticeable projects are Aman health which serves the medical needs of human population by providing ambulance services & free telephonic medical prescriptions from a team of medical doctors, Aman Ghar which serves nutritional needs of the children from low income backgrounds by providing them meals, while other projects like Aman Sports promote the need of physical sporting activity amongst the youth. Education forms the basis of the core needs of any society, realizing this fact the Aman Education project helped an international project Teach for Pakistan which aims to utilize the best amongst literate young generation of today to educate those children who find themselves deprived from the inspiring educational methodologies they sought in their under resourced schools. The other core of Aman Education is Aman Institute of Vocational Training (AIVT) more popularly known as AMANTECH. As the name suggests, the institute is a centre for vocational or technical training for the masses of

Karachi.

The concept of AMANTECH originated from the general observation of the fact that most of the population which is deprived of resources to fund higher education wanders about to seek employment to support their family income but due to the fact that they do not have any particular skill supporting their intention, finding their motive becomes a hard task & they have to finally settle either with a job that requires unskilled labor or as a trainee under the guidance of a technician to learn the tricks of the trade from his experience. Once a thorough survey of the industrial sector was conducted it was observed that an immense shortage of trained technicians lies around the Industrial

hub of Karachi despite of the presence of many vocational institutes due to impartation of poor quality of education to the trainees. Amalgamating this fact with the fact mentioned earlier any individual can eye a prospect of transforming the vast unskilled population into skilled/semi skilled workers would not only provide employment opportunity for masses but also would resolve the industrial requirements resulting in an overall growth opportunity for our nation. This motivation is visible in the motto of the institute which states “Transforming lives”. Eyeing the prospects & having the feasibility the AMANTECH program began with the first intake of students in the year 2011, but long before the intake & initiation of routine classes the process of hiring & training the instructors had begun. Individuals having years of Industrial & technical training backgrounds were inducted & trained rigorously at the institute about the respective course outline of the trades from which they belonged. The course material was developed & verified & the instructors themselves appeared for the City & Guilds (UK) examination; the certifying authority affiliated with AMANTECH in order to judge their credentials as trainers. Once the training was completed, the inducted students started to pour in

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Exclusive Review by Shahzad Tabish - continued seeking a transformation in their lives. The AMANTECH facility features the most in-demand trades of Automobile, Refrigeration & Air Conditioning, Mechanical, Electronics, General Electrical, Construction, CAD/CAM, Fabrication, Welding and Pipe working. The beauty of the taught curricula is its global acceptance due to affiliation with City & Guilds an internationally recognized authority for awarding vocational certifications. T a l k i n g a b o ut t he i n d i v i d u a l departments, we would first like to discuss the

Automobile department which constitutes the largest population of students at AMANTECH. The department features state of the art simulator engines, transmission modules, engine and bodywork electrical modules. The newly inducted students are trained with special attention towards practical practices by allowing them to rigorously train themselves on non functional engines, transmission & drive train modules while special emphasis is paid on theoretical learning enabling them to understand the in depth details of individual assemblies & sub assemblies. The graduates of Automobile department have found placement in internationally reputed firms unlike Al Futtaim’s Lexus dealer core as well as local employment in well renowned Shahnawaz motors the d ealers of Merced es Paki stan.

The Mechanical department trains individuals for manufacturing techniques based on drilling, shearing, grinding while also paying due attention towards lathe & milling machine operations on which the students develop good command which reflects on the machining projects they are able to come up with. The Fabrication Welding & Pi p e wo r k (F WP ) d ep a rt me nt emphasizes on t he f ab ricatio n technology of Welding. The students undergo hours of practice of welding different joints utilizing different welding techniques. The department emphasizes on Shielded Metal Arc Welding (SMAW) for welding metal plates while due attention is paid towards Oxy Acetylene welding techniques applicable for sheet metal welding operations as well. The graduate students from FWP department are in acute demand in international as well as local industrial sector.

In the General Electric &

Monthly AutoMark Magazine timings.

The current operating capacity of AMANTECH is around 5000 students while a total of 3364 students are currently enrolled in the institute.

Electronics

department the students are trained to design electrical circu its, Microcont roller based application circuits while basic training of PLC’s is also provided in order to make their application in modernized industrial environment.

The Refrigeration & Air Conditioning department has curricula that train the individuals to take up the challenge of maintaining HVAC environments in industrial complexes as well as small Refrigeration & Air conditioning units by deeply strengthening their insight into the theoretical as well as practical applications of the vocation.

The CAD/CAM department focuses on the Computer Aided Drawing & Manufacturing training’s utilizing state of the art software’s namely ProE & Autocad. The students undergo different levels of trainings both for CAD & CAM & respective level certifications are awarded with respect to the expertise achieved. The students irrespective of their trades are imparted basic IT skills including basic trainings on MS Office & CAD/CAM skills on Autocad 2D & ProE software’s. Along with the necessity of IT, communication in English language to express themselves forms the basis of all the students willing to seek an international career, hence appropriate attention is paid towards the English language skills of every individual at the institute. Basic Management skills, Life skills & ethics are also taught to all the students enabling them to understand the etiquettes & norms of professionalism. The entire individual department’s work in close coordination to satisfy the requirements of the trainings within a short span of time the students are allocat ed d uring thei r stay at AMANTECH. The courses offered vary from a span of 6-18 months depending on the trade requirements & shift

The institute not only provides training but also pays due attention towards the employment prospects of the students & to cater the need a placement department works independently under t h e Mar k et i ng d ep ar t me nt o f AMANTECH. With the colossal growth in the population of the students the number of instructors has also grown with most of them being meritorious young engineers from reputable institutes like NED University. Recently AMANTECH has signed ventures with different educational as well as industrial institutions one of the noticeable being the execution & implementation of German Pakistan Training Initiative (GPATI) which coordinates with Institute for Advancing Careers & Talents (iACT) Germany to incorporate German methodology of technical training through which students would go through rigorous technical training at the institute while making it mandatory as a part of program to carry out on job training at the associate German industrial alliance namely Lufthansa, BMW, Metro etc. The most recent activity in this concern is the signing of Toyota Technical Ed ucat io n Pr ogram (T TEP) i n collaboration with Indus Motor Company (IMC) to develop a Paint & Body institute in Karachi to develop skilled technicians in the field of Automotive Bodywork Painting. All in all we cannot sum up the discussion without the identification of fact that the act of philanthropy the institute caries out deserves recognition & support. It’s a financial fact that the facilities provided to individual student cost a whopping 275,000 PKR while the amount they are charged constitutes only 5% of the amount spent for them. Despite of this fact the institute continues to aim high & develop beyond the expectation of many critics. It’s a mere fact that the sustainability of the foundation depends on the support of p r o f i t a b l e organizations whether it is in the form of financial. By Shahzad Tahish

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A tough FY14 for local car assemblers

As the industry is already struggling to cope with uncertain law and order situation in Karachi and other economic factors, many industrialist and businessmen are alarmed over grand operation in Karachi for restoring peace in the port city. The industry people believe that this operation may hamper production activities which were already marred by strikes, sit in, law and order situation and protests over rising extortion slips and kidnapping of businessmen. Irrespective of any political and economic situations and uncertain law and order situation, the car assemblers do not waste any time in quickly raising the prices of cars and other vehicles. They link it to losing value of the rupee against the dollar and rising utility bills and transportation charges since June 2013 to offset rising cost of production on account of costlier parts imports. However, they did not provide any relief over the fall in cost of imports when Yen appreciated against major currencies like Rupee and Dollar in the first six months of the current year. Only used car dealers made hue and cry over the car assemblers for not sharing the cost reduction on account of low import price with the consumers while the government, like past practice of previous government, kept a mum. Indus Motor Company (IMC) has raised the prices of various vehicles by Rs 20,000 to Rs 50,000 followed by increase in Honda City and Honda Civic prices by Rs 20,000 and Rs 35,000 respectively. The assemblers surged the prices as one dollar is now equal to Rs 105 in interbank market as compared to Rs 99.50 in June 2013. However, the assemblers had already raised the prices by at least one per cent after increase in general sales tax (GST) by one per cent to 17 from 16 per cent in Budget 2013-2014. The government has never ever initiated any enquiry as to why the assemblers had adopted delaying tactics in passing out exchange rate benefit to the

consumers when the Rupee gains strength against Yen and Dollar. And now when assemblers have come out with new enhanced prices due to Rupee depreciation the government is still not ready to question the assemblers. Market people say that car prices will continue to remain under pressure since the assemblers have failed to achieve desired localization levels in various cars and they are still dependent on hi-tech parts imports, which are in few numbers. Nobody knows whether these hi-tech parts are made of gold or silver that becomes an excuse for assemblers to raise the price on rising cost of imports due to exchange rate parity. On local parts procurement, many vendors are also perturbed over rising dollar value as they have to import raw material from various countries to

produce parts for local car industry. It means that there will be no support from the localization levels or from the vendors’ front that have to import raw material from abroad. All enquires initiated against car assemblers for raising prices time to time had remained confined to only meetings with assemblers in Islamabad and it seemed that the government officials, who never did any homework, surrendered before the power lobby of local assemblers. Even if the government insisted strictly to control or reduce prices the assemblers came out with price increase shocks. Assemblers always blamed low volumes of local car productions in the country which did not allow them to take risk of making huge investment in parts and accessories manufacturing especially hi tech parts manufacturing in Pakistan. Every country has specific requirement of cars as per person as per their country’s population and people income. Similarly, various countries’ government impose taxes and duties as per their economic conditions and sustainability of people of paying taxes. It has always been wrong to compare car volumes with other countries especially India who have their own dynamics and requirement. Perhaps our local assemblers and their vendors would rightly tell as to how much volume they needed to make investment for the long term. Perhaps the assemblers want that every house should have at least three locally

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It has always been wrong to compare car volumes with other countries especially India who have their own dynamics and requirement. Perhaps our local assemblers and their vendors would rightly tell as to how much volume they needed to make investment for the long term. Perhaps the assemblers want that every house should have at least three locally assembled cars but it can only be possible when the prices will be affordable and people have a choice to select cars as per their incomes and resources. assembled cars but it can only be possible when the prices will be affordable and people have a choice to select cars as per their incomes and resources. While paying over Rs 1.5 million for Toyota Corolla, one has to think twice due to its old Euro II engine and lack of facilities while at same price they have a wide option to have Euro IV Honda City with central locking, power windows, other passenger and driver safety gadgets etc. Even imported used cars of high quality fully loaded with features are also available. Always begging for long-term auto policy, the assemblers are not ready in introducing world class brands saying that due to high price in world markets it will not be feasible. Over one year is gone and there is no replacement for Daihatsu Cuore and Suzuki Alto, while production of Hyundai Santro, Kia Spectra and Classic have alread been suspended many years ago. Consumers have set their eyes on proindustry Prime Minister Nawaz Sharif to bring some kind of positive change in automobile scenario of Pakistan by inviting foreign investors especially Chinese and Korean car makers to produce low-priced cars. Even some European car makers, who produce small engine cars, can also be attracted for which the government has to ensure investorsâ&#x20AC;&#x2122; security and prov id e incentives to lure them. Coming back to local car sales, it is quite surprising that sales of only Honda cars are going brisk otherwise Toyota Corolla is now literally struggling, while sales of Pak Suzuki can also be termed unsatisfactory. The first month of the new financial year somehow started on a positive note, with rise in sales of cars to 9,288 units in July 2013 from 8,996 units in July 2012, up by 3.25 per cent. However, overall car sales remained depressed if compared with June 2013 figures due to imposition

of higher general sales tax and withholding tax in Budget 2013-2014. Honda Civic and City sales rose to 800 and 1,162 units in July 2013 as compared to 506 and 1,144 units in July 2012. Toyota Corolla, Suzuki Swift and Suzuki Liana sales dropped to 2,368, 440 and five units from 2,464, 684 and 25 units respectively. Suzuki Cultus sales plunged by 8pc to 1,225 from 1,135 units while Suzuki Mehran and Suzuki Bolan sales increased to 2,299 and 989 units from 2,217 and 762 units. There was 33pc decline in Honda Civic sales to 800 units in July 2013 as compared to 1,192 units in June 2013 while Honda City sales rose 4pc to 1,162 units from 1,115 units in in the same period. Pak Suzuki Motor Company Limited (PSMCL) registered a drop of 18pc in Suzuki vehicles sales to 5,697 units in July 2013 as compared to 6,977 units in June 2013, while Indus Motor Company sales (Toyota Corolla, Hilux and Fortuner) plunged by 32pc in July 2013 to 2,894 units as compared to 4,243 units June 2013. Because of low demand, Indus Motor Company (IMC), makers of Toyota Corolla cars, had also been observing Non Production Days (NPDs) for the last several months. In August, the company observed five to six NPDs in which production was down by at least 25-30 per cent from plantâ&#x20AC;&#x2122;s original production capaicty. The company plans to observe six to seven NPDs in the current month owing to slowdown in production by at least 40 per cent from the plant capacity. The main reason of Toyota Corolla falling sales is the latest models of Honda Civic and City with latest engine and security features which the costly Corolla especially XLI model lacks. Besides, a number of used imported Toyota models are readily available in the market, causing divide in the mind of people before purchasing locally produced Toyota Corolla.

The profit after tax of IMC declined by 23 per cent to Rs 3.3 billion in FY13 as compared to Rs 4.3 billion posted for the same period last year. Earnings per share decreased to Rs 42.72 as compared to Rs 54.7 in the previous year. On year to date basis, sales of Toyota CKD and CBU decreased by 28 per cent to 39,774 units compared to 55,060 units sold during the same period last year. The sales revenue for the year ended June 2013 was Rs 63.8 billion, down 17% compared to Rs 77 billion posted for the same period last year. Adverse market conditions like huge influx of used cars, weak economy, energy shortage and poor law and order situation in FY13 compelled the company to curtail production to 37,321 units, down 32 per cent as compared to 54,917 units produced during the same period last year. Another main reason of turbulence in financial results of IMC was termination of Daihatsu Cuore (non Euro II model). It also seems that car sales through leasing and bank financing has also not improved despite cut in interest rate by the State Bank of Pakistan in the current year. The local car industry enjoyed a boom period few years back when the share of car sales through bank financing was over 70 per cent which has now dropped to 20-25 per cent. As the industry is already struggling to cope with uncertain law and order situation in Karachi and other economic fact ors, many industrialits and businessmen are alarmed over grand operation in Karachi for restoring peace in the port city. The industry people believe that this operation may hamper production activities which were already marred by strikes, sit in, law and order situation and protests over rising extortion slips and kidnapping of businessmen.....

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Automotive Sector - Update

Auto industry suffering aftershocks of used cars imports & amnesty schemes Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM)'s Chairman, Munir Bana, said that the lobby of used car importers, who made billions of rupees through misuse of import policy in the past, are again making all-out efforts to misguide the new government, while the country's automotive industry & auto parts manufacturers are still suffering from the aftershocks of inconsistent import policies, rampant import of used cars and frequent amnesty schemes of the past government. Mr. Bana disclosed that, due to these reasons, the domestic industry witnessed a huge decline of 25% in sales of locally manufactured cars from 157,325 units in 2011-12 to 118,830 units in 2012-13, leading to a drastic fall in sales of auto parts in the country. He said that present import policy continues to pose a threat for the local auto industry because, while import of used cars is restricted to three years, all other vehicles such as Vans, SUVs and 4x4 vehicles up to five years old are allowed to be imported

under the current laws. "Import cost of 3-year old used cars is also attractive because of lower duty rates fixed as far back as 2005, based on currency rates and car prices prevailing in the year 2005 (vide SRO 577(I)/2005). Since 2005, the parity of currencies as well as the cost of vehicles have risen significantly, but the duty rates fixed in US Dollar terms in 2005 remain unchanged", he added. The industry representatives have time and again expressed their concerns to FBR to review the duty rates fixed in SRO 577, but despite consensus, no action has been taken so far, the PAAPAM Chairman said. "In a landmark judgment in July 2013, the Amnesty Scheme for smuggled vehicles was deemed illegal by the Islamabad High Court and ordered to be reverted back to pre-SRO position. No action has been taken by the government in this regard, so far, and a huge amount of smuggled vehicles are still available in the market" said PAAPAM Chairman. He recalled that that the IHC had declared the amnesty scheme of the Federal Board of Revenue

Corporate results

Atlas Hondas revs up earnings Atlas Honda Limited (AHL), Pakistanâ&#x20AC;&#x2122;s largest motorcycle manufacturer with a market share of over 50%, has posted a profit after tax of Rs488 million for the quarter ended June 30 2013, up 40% a gai n st Rs350 mi ll i on i n t he corresponding period last year. Company sales also improved by 7% to Rs10.75 billion for the quarter ended June 30 2013 from Rs10.06 billion in the corresponding period previous year. Earnings per share (EPS) for AHL improved to Rs4.73 per share in the quarter ended June 30 2013, up from Rs3.39 per share in the corresponding period last year. On a yearly basis, profit after tax for the 12 month period ended March 31 2013 was Rs1.60 billion, up 33% against Rs1.20 billion in the previous year,

showing an increase in growth rates. AHL is a joint venture between the Atlas Group â&#x20AC;&#x201C; a local financial and industrial conglomerate and Honda Motor Company Ltd Japan. It is by far the biggest motorcycles maker in the country. AHL sold over 630,000 units in the 12 month period ended March 2013, up 5% against a little over 600,000 units in the previous year, resulting in total revenue from sales in 2013 of Rs42.32 billion, up 11% from Rs38.01 billion in 2012. The next step for the company is touching the one million units a year barrier. The company is trying to reduce cost by completely switching to local parts used in its motorcycles, up from 92% currently...

(FBR) illegal and ordered them to impound over 50,000 vehicles. The court, encouraging honest taxpayers and supporting the local industry, had directed the FBR to announce bids for the vehicles after impounding them for auction. The court considered that such schemes had always encouraged smugglers to continue their criminal activities at the cost of domest ic i ndust ry and national interests, he said. On behalf of the entire auto sector, he appealed to the Court to redirect the authorities concerned to implement its directives and prosecute the car smugglers under the law of the land. The PAAPAM vice chairman Usman Malik observed that the car import policy was relaxed in December 2010, when used cars of upto five-year old were allowed to be imported, but this was reverted back to 3-year old cars in December 2012 to offer relief to the local auto industry. During these two years, about 92,000 used vehicles were imported, a substantial quantity of which are still available for sale in showrooms and continues to haunt the sales of locally manufactured cars. He maintained that on top of used vehicles, 58,000 smuggled vehicles, which were legalized under the Amnesty Scheme, are also available in the market. He said used car dealers have grossly misused the import policy concessions, which is meant only for expatriate Pakistanis, by importing huge quantities of used vehicles through manipulation of documents of Pakistanis returning from abroad. Usman Malik said that presently automobile and auto parts industries are passing through trying times, in the face of rupee devaluation, harsh taxes levied in the recent budget, power hikes, etc, which have been compounded by the d wind li ng sal es of locally manufactured vehicles due to the presence of large number of unsold stock of imported used cars and legalized smuggled cars in the market....

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

Monthly AutoMark Magazine

Customer feedback is the most effective marketing tool.... Are your dead customers really dead…or do they have a gripe that keeps them from coming back? They are, in most cases, still driving a car. If they don’t come back, it is reasonable to assume that they are going elsewhere. Have you ever gone through your customer database of repairs sold? And have you ever noticed that quite a few customers have never returned, that may belong to the “dead” file? Are your dead customers really dead…or do they have a gripe that keeps them from coming back? They are, in most cases, still driving a car. If they don’t come back, it is reasonable to assume that they are going elsew here. The final sale is accomplished when a customer settles his bill and drives away, what do you suppose is on his mind? Has that final sale been made? It is at this time of day that the customer decides whether he should bring his car back. Is he satisfied with the work that was performed? Was he angry due to a dirty car? Was he irritated because he had to wait too long for his car? Or was someone discourteous? It might be a small triviality to you, but to the customer’s eye it might loom large, destroying his vision like a grain of sand. Everyone knows that nobody is perfect, but will your customer keep this in mind when he is still peeved at service he received in your dealership or service

shop when his car needs the next maintenance?

Importance of feedback ... “We are here to hear you” Customers are your eyes, ears and mirrors. Have you ever wondered what your customers are thinking? The feedback is the only way to capture customer experience, opinions and influences. Nothing can replace customers telling you how they like to be treated, what you are doing right or wrongand what could be done better. It is a wonderful

way to constantly improve your service. You'll learn everything from how they perceive your attitudes of service to how they feel you keep them informed when they have problems. But you won't learn anything at all if you don't ask. Feedback is a wonderful marketing tool. Your customers are going to derive that you are striving to make things better for them. They'll sense that you are pursuing a quest for improvement. Remember, your customers want a relentless pursuit of quality service and feedbacksand this isthe best way to get in front of your customers without attempting to sell them anything. Seven simple feedbackquestions to ask:

How would you rate our Good service? Excellent Fair Poor Were you greet ed and t reat ed withrespect? (Y) (N) Were you satisfied with the work that was done? (Y) (N) Was your car ready whenpromised? (Y) (N) Was it within the estimate you were quoted? (Y) (N) Would you recommend us to a friendor

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family member? (Y) (N) Would you return on your next service visit? (Y) (N)

rather than electronically. These forms cater to the less computer-inclined customers.

How to acquire customer’s feedback?

4. Automated Phone System:

Customer care is paramount, yet the methods of acquiring feedback might be lost on most businesses and the correct method will also vary according to your CRM and customer base.Welcome all customers’ feedback and look at them as an opportunity, not as a threat, to your business. As a way to express your appreciation, offer a free service or detailing as an incentive by having a monthly random selection/draw for customers those have returned feedback. There are many different options open to collect feedback. Here are the top ten sources of feedback.

1. Direct customer contact: Display a small sign at the cashier window “We are here to hear you” or add a note on customer’s invoice,“Please see service or customer relations manager should you have any concerns related to the service performed”. Conduct exit interview, as this method is the fast and effective way to have feedback and resolve customer issues on the spot while customers are still havingfresh concerns in their mind.

2. Suggestion Box: Install a suggestion/feedback box near cashier window with the customer communication feedback form for customers’ thoughts and opinions on a slip of paper. Encourage and invite all customers to participate.

3. Follow Up Letter: Send a follow up letter after three days and ask your customers for their feedback on recent service or send out paper based feedback card via snail mail,

Set up an automated phone systemto call your customers and collect their feedback simply by options to get their input. This may be the faster way, but most customers feel better having a two way communications to express their concerns. Set up “1-800” toll free phone for quick response.

5. Feed Back Form By Fax: Send feedback form by fax and ask your customers to send back by just selecting, m ark i ng or f il l in g c omme nt s .

6. Online Questionnaire / Suggestion Form: Create an online questionnaire /comment form on a blog or website – if your business has a website, it may well have a feedback section to allow visitors/ customers and visitors to add comments on Facebook or Twitter.

7. Email Survey E-mail survey, it is the most effective and fast way to get responses, as most customer are on their computer during working hours.

8. Survey Monkey Survey Monkey is a web-based software program used to collect feedback from your website (if you have any).The program will assist you in tabulating feedback into percentages and charts

for sharing.

9. Regular Staff Meetings Your staff is closer to the customers, so conduct monthly meetings and take advantage of their wisdom about your customers.

10. Call Centre Establish or outsource to a call cent er and have a live person to call customersfor their recent experience with your dealership/service shop.

How to measure customer’s expectations “If you can’t measure it, you can’t manage it!” and if you can’t quantify it, you can’t measure it! Understand the customer is the component of measuring service quality. It ultimately includes your willingness and ability to know and understand your customer’s wants, needs, and expectations. Mostly it is assumed that if you worked someone’s car and they returned to your dealership/shop, everything was all right. The focus was on dealing with the broken car; the broken customer was ignored or generally went unnoticed. Now as the automotive service industry moved forward from just fixing cars to fixing customer relationship, measuring the customer perception of service quality took on new measuring and greater importance. Regardless of if you sell automotive products or provide service, getting input from your customers is critical to your success. It does not matter how long or how successful your service operations may be, you will never cease to better your automotive business by learning from your customers. This is one of the first steps to the successful improvement of customer service.

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Don’t let the four fatal excuses prevent you from revamping your feedback system. The potential rewards will be worth it!

Four common excuses that undermine feedback Despite all the benefits of feedback, do you still choose to hide from feedback? Here are some of the most common excuses to evade feedback.

1. You don’t ask because you are afraid that the information will be too negative. The reality is that the information usually is much more positive than negative.

2. You feel inadequate about your ability to handle problem/difficult customers, so you avoid hearing complaints. 3. You do not solicit customer feedback because you feel it will create higher expectations than your dealership /service shop can fulfill.

4. You don’t get enough meaningful i nfo rmati on to implement any worthwhile changes. Don’t let the four fatal excuses prevent you from revamping your feedback system. The potential rewards will be worth it!

Seven benefits of feedback 1. Feedback reveals your customer`s current and future plans and let you customize your approach to meet those needs. 2. Seeing your business from your customer’s point of view allows you to answer the question“Wouldyou do business with you?” 3. Feedback allows you to tailor your

service levels so you enjoy maximum satisfaction at a minimum cost.

4. If you don’t ask, you’ll never know how you’re doing until it’s too late. 5. Feedback is magnified as iceberg, making it more critical than it originally appears. One of the sure signs of a bad or declining relationship is the absence of complaints from the customers. 6. Feedback reveals what your competitors are doing, helping you to be a consistently strong contender. An effective ongoing customer feedback system can tell you what its image is among your current and potential customers. 7. Having the reputation of wanting to hear feedback can make money for you.

What to do with the customer’s feedbacks? Thank your customer for taking time to contact you with their feedback or comments; good or bad, both must be acknowledged within three days, preferably with the same method of receiving. Sort out all the feedbacks into four segment s such as, complaint s, compliments,suggestions and contact

source. You can further sort common complaints and issues related with the communication, quality,price and time by using Excel data sheets. Apologize for the ones with the complaints and concerns and assure your customers that you are paying serious attention and their input is very important for quality assurance, trainingand coaching p urposes. Find out the most common concerns, probe the root cause and take corrective actions and share all this information with your staff for training and to avoid repetition.

Review and resolve all customers’ concerns to their complete satisfaction and usethis vital information to your business advantage and retain loyal customers for life. This exclusive article on ‘Customer feedback is the most effective marketing tool’ has been written by Mohammad Shahzad S.A.E., D.M.P. specially for Mo n t h l y A ut oM ar k Ma ga z i n e. (Automotive Engineer/Doctor of Motors) He is a Senior Group Manager for Customer Management Operations with The Brimell Group, Brimell Toyota and Brimell Scion in Toronto, Canada. Free advice for Automark readers; please do not hesitate to contact him at shah@brimelltoyota.com or automarkpk@gmail.com

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International Automotive Industry - Update

Toyota introduces new LE Eco grade with new 2014 Corolla Toyota in introducing a new LE Eco grade with the updated MY 2014 Corolla compact sedan. The all new Corolla LE Eco trim level offers enhanced fuel economy due to a 140 hp (104 kW) Valvematic-equipped engine, improved aerodynamics, and unique CVTi-S (continuously variable transmission) tuning. The Corolla LE Eco will offer an EPA rating of 42 mpgUS (5.6 l/100 km) on the highway (3 mpg better than the LE), 30 mpgUS (7.8 l/100 km) in the city and 35 mpgUS combined (6.7 l/100 km). The LE Eco is also certified to California LEV 3 standards. The LE Eco enters the market at $18,700; entry price into the 2014 Corolla lineup is $16,800 for the L grade. The 1.8-liter engine is a DOHC in-line 16-valve 4-cylinder, with Valvematic, aluminum alloy block and head; the 1.8iter unit for the L/LE and S models uses Dual Variable Valve Timing with intelligence (VVT-i). The compression ratio in the LE Eco unit is slightly higher: 10.6:1, compared to 10.0:1 in the L/LE/S models. The 140 hp output of the LE Eco is 8 hp above that of the L/LE/S, and at a higher rev point (6100 vs 6000). Peak torque is slightly less: 126 lb-ft @ 4000 vs 128 lb-ft at 4,400 rpm.

Toyota Celebrates 40 Million Corolla Sales with New Ad Whichever way you see it and regardless of what you think about surpassing the 40 million mark in global sales in no small feat for any carmaker. The Corolla nameplate achieved this landmark number over the course of forty-seven years and eleven generations beginning with the original model that launched in November 1966 with an annual production target of 240,000 units at the Toyota’s Takaoka Factory in Japan. Today, the company produces more than 1.1 million Corollas every year, or about 125 every hour in factories all over the world, from the U.S. to China and from South Africa to Turkey and Venezuela..

Monthly AutoMark Magazine

China Automotive Engine Oil Market Forecast & Opportunities, 2018

Maruti Suzuki may beat Tata Motors to India's first 800cc diesel car

According to "China Automotive Engine Oil Market Forecast & Opportunities, 2018", the market for automotive engine oil in China has observed tremendous growth as a result of increasing automotive sales. The automotive engine oil market revenues are expected to grow at the CAGR of 11% till 2018. The Chinese government is concerned about the increasing numbers of motorcycles and heavy commercial vehicles in the eastern and northern parts of the country, but plans to increase the number of commercial vehicles in southern and western parts of the country which is expected to increase sales of engine oils in these regions. The government is continually focusing towards "Cleaner Transport". The government has taken certain measures to curb emissions, such as the increasing the number of electric and hybrid vehicles. These vehicles need more maintenance and synthetic engine oil. These hybrid and electric vehicles are further expected to boost the market for automotive engine oils in the country

With Tata Motors' plan to launch a Nano diesel yet to come to fruition,Maruti Suzuki India may get a head start by being the first to offer a diesel engine option in the lucrative micro/mini car segment. In 2014, Maruti's new global small car (code: YL7) will be the first model to offer parent Suzuki’s selfdeveloped 2-cylinder 800-cc diesel powerplant, multiple sources close to the development told FE. This could make the YL7, a replacement of both the A-Star and Zen Estilo, the smallest and cheapest car in the country, available with a diesel engine option. At a time when demand is sluggish, the move is seen as key to unlocking increased volumes in the entry segment. Mini cars today have an over 21% share of India's 2.7 million passenger vehicle market, but the segment does not offer diesel engines. “The diesel engine plan is on the speed lane for Maruti. While the petrol model of the YL7 will be launched first around the Auto Expo, the start of production for the diesel variant is for later part of the year. The YL7 will be exported from India to various markets and, in some, will also be sold as the new Alto,” a source close to the development said. A senior Maruti official confirmed the developments, but requested anonymity. When contacted, a company spokesperson added, “We do not comment on our future models.” Maruti’s YL7 small car will first be launched with a 1-litre

Honda's China venture recalls over 400,000 cars: officials A Chinese joint venture with Japanese carmaker Honda will recall more than 400,000 cars in the world's largest auto market because of a problem with a component, China's quality watchdog said. Dongfeng Honda Automobile will begin the recall of its CR-V sport utility vehicles (SUVs) in China on Friday, the General Administration of Quality Supervision, Inspection and Quarantine said in a statement on its website. The company, which is a 50-50 joint venture between China's Dongfeng Motor Corporation and Honda, offered to inspect the vehicles and change any of the defective components, which were named as "piston rods" for shock absorbers in the statement. "In extreme circumstances, the piston rods may fracture," it added. The CR-V model is one of the top 10 selling SUVs in China. But sales of many Japanese cars in China have been hit over the last year amid a simmering territorial row between Tokyo and Beijing....

Toyota to recall 235,000 vehicles over two quality issues news Toyota yesterday said that it will recall about 235,000 vehicles over two separate issues, an indication that the Japanese automaker continues to struggle with quality issues - Toyota is recalling 133,000 Highlander Hybrid and Lexus RX400h hybrid 2006 models over a component of the hybrid system overheating, which causes warning lights to turn on, and the vehicle to enter "limp home mode" with the hybrid system powering down. Toyota said that a possible early warning of the problem is abnormal noise just after start-up. The problem can lead the vehicles shutting down completely. As of 2013 Toyota has recalled around 13 million cars in five years.

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International Automotive Industry - Update

Toyota, Nissan, Honda and Mitsubishi Agree to Joint Development of Charging Infrastructure for PHVs, PHEVs and EVs in Japan Toyota Motor Corporation, Nissan Motor Co., Ltd., Honda Motor Co., Ltd., and Mitsubishi Motors Corporation jointly announced their agreement to work toget her to promot e the installation of chargers for electricpowered vehicles (PHVs, PHEVs, EVs*) and build a charging network service that offers more convenience to drivers in Japan. The move is in recognition of the critical need to swiftly develop charging infrastructure facilities to promote the use of electric-powered vehicles. Assisted by subsidies provided by the Japanese government, the four automakers will bear part of the cost to install the charging facilities. They will also work together to build a convenient and accessible charging network in collaboration with companies that are already providing charging services in which each of the four automakers already have a financial stake. At present, there are about 1,700 quick chargers and just over 3,000* normal

Kawasaki Heavy Industries to Push Motorcycle in China Kawasaki Heavy Industries, Ltd. (KHI) announced a plan on August 8 to march into the motorcycle market of China again. It is 15 years since KHI withdrew from the market. According to the plan, the company will establish sales outlets of medium- and large-sized sports motorcycles in Shanghai, Beijing and Chengdu. The company has become the third Japan's enterprise that sells medium- and large-sized motorcycles in China, after Suzuki and Yamaha. Kawasaki's local unit in Shanghai will import from Japan its flagship Ninja ZX-14R, Ninja 650, Ninja 250, Z250 and other models for sale to Chinese motorcycle fans who are growing in number in tandem with China's economic development. Kawasaki said it will expand its sales network to include Beijing, Chengdu and other large cities, aiming to increase local annual sales to 5,000 units within five years.

chargers in Japan, which is generally recognized to be insufficient. In addition, the lack of sufficient coordination among existing charging providers can be improved to offer better charging service t o cu st omers. The gov ernment announced subsidies for installation of charging facilities totaling 100.5 billion yen as part of its economic policy for fiscal year 2013 to quickly develop the charging infrastructure and expand the use of electric-powered vehicles using alternative energy sources. Currently, each prefecture in Japan is drawing up a vision for the use of the subsidies. With this strong support, the four automakers will work together to install the chargers. Previously, each automaker assessed possible locations for charging facilities on their own. Now, they have agreed to work jointly under the common understanding that the charging infrastructure has public value and that enhancing it should be done quickly during the limited period that the subsidies are available.

Green Cars Gaining Speed in China In the first part of the year 5889 new energy vehicles made it to Chinese roads with around 10,000 new energy vehicles being produced each year. The Chinese government originally planned to have 500,000 New Energy Vehicles on teh road by 2015, a goal which is obviously far away and blame being laid at the feet of the government by industry bodies and consumers for continually delaying subsidy polices for private buyers. Hangzhou, the home to Geely and a number of other automakers, is apparently leading the way in developing China’s EV rental industry. Rental bikes are extremely common in Hangzhou with tourists and local residents renting them to get around the mostly flat city center, but now auto rental companies are popping up to offer EV rental services. Geely’s recent JV with Kandi has been given the name of Zhong You. The new company plans to offer a ‘micro public service’ of EV rental vehicles that consumers will be able to rent for just 20RMB per hour after leaving...

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China’s Great Wall SUVs set to enter India China's largest sports utility vehicle maker, Great Wall Motors, is set to enter the Indian market next year — the first Chinese auto company to venture into the world's sixth-largest car market. Great Wall has also sought to participate in next year’s Delhi Auto Expo, but is unlikely to make the cut due to space constraints at the new Greater Noida venue. It may set up its production facility near Pune, and is likely to bring its bestselling SUV Haval H5 as its first offering in India. “The company will enter the market next year,” said a source close to the firm. “It will be the first bona fide Chinese company to come here. They see great potential in India especially because of the high demand for SUVs here.” Great Wall Motors is a specialist SUV maker, with two production bases with an 800,000 units per annum capacity. It exports vehicles to over 100 countries and is present in other big emerging markets such as Brazil, Russia and South Africa. In the past, China’s largest auto maker, SAIC, entered India via the back door, by buying a stake in General Motor’s India subsidiary. GM’s two latest products, the SAIL UVA and its sedan version, are SAIC products adapted for India.

Chinese automaker to begin operations in Brazil Chinese automaker Chery will open a new plant in Brazil this year, company officials said. Chery Auto started building the plant in 2011 in Jacarei city in Sao Paulo with an investment of 2.45 billion yuan (around $400 million), Xinhua reported. Chery Auto set foot in Brazil in 2009 and has introduced several models including QQ, Cielo and Tiggo, which won the country's title of "SUV of the year" in 2010. In July, police in Sao Paulo started using Celer models, the first time that Chery cars have been used for public service. Chery has 80 dealers in the South American country.

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Exclusive Review by Shahzad Tabish

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Suzuki Used Car Gala A Win-Win Deal for the OEM & Refurbished Car Consumer Market We belong to a state where the concept of junkyard is nowhere to be seen. For things, words like “obsolete” & “out dated” hold absolutely no place. As a matter of fact our country itself is becoming a giant scrap yard for the first world nations. Whether it is a secondhand electronic gadget from the west or a reconditioned car from the east, an affordable price tag is all that is required to sell it to our consumer market. Talking specifically about cars, the trend began around ten years ago when the import duties were reduced on recond it ioned CBU aut omobile assemblies. Many local aftermarket dealers found huge scope & invested to gain benefits. The local consumer market which was fed up by the limited variety on offer by local OEM’s greeted the reconditioned cars with open arms & hence a new business started to prosper locally. Local OEM’s & their authorized dealers felt the setback & protested against the decision but it was in vain, they had to come up with an idea of their own. It took quite a while for them to step in, but now the local mass production giant Suzuki has started a mega project of t h e i r ow n i n t he af t e r sa le s refurbishment program of their own branded product. This year Pak-Suzuki Motor Company recently has organized “Used Car Gala” in expo centre Karachi twice, in the months of April & recently on July 1st. The aim of the event was to showcase & sell used Suzuki certified vehicles from authorized Suzuki dealerships across Pakistan. The earlier event showcased a total of 120 vehicles amongst which 80 were sold out, marking a 67% success rate. Automark magazine paid a visit to the recent event. It showcased a total of 148 vehicles including Mehran, Cultus, Alto, Bolan, Liana & Swift. Out of these vehicles a total of 99 vehicles were sold out, again marking a total success rate of over 67%. These used vehicles were acquired either in the exchange scheme offered by Suzuki or either having being sold by the customers to authorized dealers of Suzuki. The vehicles sold

although have a price tag associated but still have a bargain price ranging between 10,000-20,000 pkr, which is surely a good news for the consumer. Talking to Mr. Mohammad Danish, Deputy Manager Marketing from Suzuki about the business objectives & achievements of Pak Suzuki motor company he explained that this concept had been brought in order to benefit the OEM in two ways, firstly promoting the sales of genuine Suzuki spare parts w hi ch w er e b ei n g ut i li z e d i n reconditioning the vehicles & secondly promoting the NVS through exchange car program. Most of the vehicles on sale in the gala were exchanged by the customers in the Suzuki car exchange program which encouraged the well-off customers to exchange their secondhand vehicles from new ones at a bargain exchange price. Having talked about a brief overview about the business, we shall now consider the certification criterions along with the warranty provided for that c ertifi cat ion. Suzuki awards certifications to vehicles having their health check thoroughly done by their authorized dealer, this health check includes Engine, Drive train & Suspension. The role of the dealer is to minimize the cost of repairs & prepare the vehicle to be ready for certification by the Suzuki officials. Rana Hamid a Suzuki official having certifying authority to the refurbished vehicles explained about the certification criterion that, Suzuki only offers certifications to cars that are less than 5 years old. There are two categories of issued certifications to the cars i.e. a 1 year certification & a 6 month certification. The current dependencies on a year’s certification are that the car either shouldn’t be older than 2 years or it shouldn’t have done a total of 45000 kms, failing either of these two obligations imposed by the parent industry the car will be handed over a 6 month certification. Coming to the dealer’s perspective Mr.Irfan Ahmed from Suzuki Mehran motors explained his ideas that the

exchange car program had benefitted all the authorized dealers by improving the means of sales. Previously they were only dealing with brand new Suzuki vehicles but this program now had opened a wider market of customers, at their doorstep who couldn’t afford a new vehicle. He said that the trend of swapping used to new vehicles is increasing day by day in the customer market. Another representative from another authorized dealership of Pak Suzuki mentioned the fact that although the certification is awarded to only 5 year old vehicles which are attained from the customer, but the dealers are also involved in acquiring even older vehicles which are then sold out independently by the dealers themselves. Many Suzuki dealers also purchase vehicles belonging to other brands as well & sell them out as an individual business agency following the path way of countless independent dealerships in order to attain pure business objectives. It is heard that recently Toyota Dealer’s have also started such an activity as well. Concluding it is worth mentioning that although we can clearly see a business enhancement oriented approach behind this concept of “Used Car Gala” from Pak Suzuki but still we cannot deny the fact that the involvement of the Parent industry makes this scheme reliable from the consumer’s perspective. We may find countless vehicles from small individual dealers on our roads everyday; but can we trust them when it comes to the health of the vehicle? Suzuki Used Car gala provides an authenticity from the parent company & answers this burning question in the minds of used car consumers. So next time you think about purchasing a Suzuki branded used car from a road side dealer, I’d recommend that you should think again. Cheers!

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

HONDA

Model Model

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

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

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

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

MASTER MOTORS DAIHATSU Model Model

Price

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

Price

Honda Honda Honda Honda Honda Honda Honda Honda

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

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

TOYOTA COROLLA Model Model XLI VVT-i 1.3 M/T 1299cc Petrol GLI VVT-i 1.3 M/T 1299cc Petrol GLI VVT-i 1.6 A/T 1599cc Petrol GLI VVT-i 1299cc LE 2.OD STD 2000cc ALTIS 1.6L Dual VVT-i MT ALTIS 1.6L Dual VVT-i MT SUNROOF ALTIS 1.6L Dual VVT-i AT Cruisetronic ALTIS 1.6L Dual VVT-i AT SUNROOF Toyota Avanza (Up Specfication) Hiace Commuter STD 3.0L Hiace Commuter STD 2.7L - GASLOLINE

Price Price Rs. 1,551,500 Rs. 1,687,500 Rs. 1,868,500 Rs. 1,732,500 Rs. 1,839,500 Rs. 1,919,500 Rs. 2,015,500 Rs. 1,997,500 Rs. 2,105,500 Rs. 2,575,000 Rs. 3,444,000 Rs. 3,433,500

Coster High Roof 26 Seater F/L

Rs. 7,974,200

Hilux Pickup 4x sc Model

Price

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

Rs. 1,779,000

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

Price Rs. 3,483,200

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

DAIHATSU

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

Price updated Sep- 2013

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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 Hi-Speed SR-70 Ravi Premium R1 Bionic AS-70

Retail Price Rs. 50,400/= Rs. 46,000/= Rs. 47,000/= Rs. 68,500/= Rs. 43,000/= Rs. 46,950/= Rs. 44,500/=

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

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

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

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

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

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

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

100cc Motorcycle No. 1. 2. 3.

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

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

Suzuki Motorcycle Sr./ No. 1. 2. 3. 4. 5. 6. 7.

Product & Model Name

Retail Price Sprinter ECO Euro-II110cc Rs. 81,400/= Raider Euro-II 110cc Rs. 89,400/= GD 110 Euro-II 110cc Rs. 101,000/= GS-150 Euro-11 150cc Rs. 106,500/= Inazuma GW 250 Rs. 675,000/= Intruder M 800 Rs. 1,500,000/= Hayasuba GSX1300R Rs. 2,400,000/=

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Exclusive Report by M. Yousuf Shaikh

Pakistan

PAKISTAN CHINA MOTORCYCLE INDUSTRY CONCIL

The Motorcycle Industry in Pakistan: About The Pakistan China Motorcycle Investment Opportunities Industry council and Prospects (Last Part) (PCMIC) This organization is a Pakistan & China Motorcycle trader & Industrial group network for Pakistanis, Chinese and their friends. In addition to being a Pakistan & China motorcycle trade & industry watcher, an investor, a business consultant and an avid follower of the Chinese Motorcycle Trade & Industry markets. The Pakistan China Motorcycle Industry Council (PCMIC) has been created as an instrument to aid the harmony between the Pakistani importer cum motorcycle assemblers and Chinese exporter cum motorcycle manufactures. The PCMICâ&#x20AC;&#x2122;s main goal is to smooth the way for further expansion by all parties and to aid in communication and develop better relationships. Global Chinese motorcycle makers are welcome to seize opportunities in Pakistan and further increase their market shares as currently 55% are Chinese branded motorcycles and 45% Japanese.

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

....Continued from previous issue (August-2013 edition)

3.4.3 FEDERAL BOARD OF REVENUE (FBR) The FBR is a part of the Ministry of Finance & plays an important role in developing the fiscal policy of the county. CBR is heavily involved in also implementing various revenue collection method tools used by the government for generating revenue. These may include corporate tax, income tax, sales tax, custom duties, etc. It has offices all over the Country. During the recent past, the CBR has undergone a major restructuring and modernization program.

CHAPTER 4 PARTS & COMPONENT SUPPLIERS (VENDORS) 4.1 BACKGROUND The local parts & component suppliers also referred to as vendors have developed by working closely with the OEMs. These OEMs were required under the deletion / localization / indigenization program to progressively use local components. The rise in production of motorcycles in the past 5 years has led to increased demand for parts and components. The component industry has not been able to capitalize on this demand

increase. The local component industry comprises mostly of SMEs. These numbers have been estimated at between 1,600 and 2, 000. Most of the p art s and components being supplied to the OEMs by the local component manufacturers do not require high levels of technology.

4.2 TRANSACTION B ASED COSTING Currently the sales tax rate is 15% on all supplies made to the motorcycle OEMs. For example if an OEM purchased components from suppliers worth Rs.10,000, he would receive invoice for Rs.11,500 which he would have received from a sales tax registered

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5.2 EXISTING LOCAL OEMs AND THEIR CURRENT CAPABILITY

ATLAS HONDA supplier. When the OEM sells the final product say for Rs.40,000 he would have to calculate and deposit sales tax @ 15% of his selling price, which in this case would be Rs.6,000. If his suppliers had given the OEM sales tax invoices for Rs.11,500, the OEM would have been able to deduct the Rs.1,500 paid as sales tax from his final sales tax liability and deposit the difference which in this case would be Rs.4,500 and not Rs.6,000. This would affectively increase his profits or reduce his costs by Rs.1,500.

4.3 TARIFF & NON TARIFF PROTECTION The component industry enjoys tariff protection under the Tariff Based System (TBS). Under the TBS, those parts which had been localized prior to 2004 carry an import duty of 50% while non localized parts carry a duty rate of 35%. As the motorcycle industry had reached substantial level of local content which in some cases was, as high as 90% with the 70CC model. The localized parts and components carry high levels of tariff protection. However this protection is not av ailable f or parts which are imported in CKD kit form. Non tariff protection is provided by the EDB when it insists that OEMs either purchase localized components from

Pakistani component manufacturers or else import them directly. OEMs are not allowed to purchase fro m t he commercial importers.

CHAPTER 5 5.1 PAKISTAN EXPORT POTENTIAL Pakistan’s domestic market has reached the critical mass which may lead to further economies of scale. It is therefore important to put in place measures which not only sustain domestic demand growth but also encourage exports. The total production of motorcycles reach 2.2 million units by 2013 – 14. Out of this, the local OEMs should aim to export units to Bangladesh, Sri Lanka, Afghanistan, the six Central Asian Republics via Afghanistan.

Atlas Honda has taken the following measures: Atlas Honda has successfully negotiated global rights with Honda Japan to export the 70CC motorcycle and regional rights for the 125CC motorcycle Achieved 93.0% localization which gives them a cost advantage Worked actively with their supply chain to reduce costs of the components As arranged over 20 technical collaborations for its vendors in Pakistan with the Japanese manufacturers

SUZUKI MOTORCYCLES The Suz uki Mot orcycles Pakistan Limited is 84% owned by Suzuki Japan. It is currently producing only 20,000 units of 100, 110, 125 & 150CC capacity. The installed capacity of the plant is over 100,000 units which the management is planning to utilize in the next five years. Suzuki is currently concentrating on the domestic market where it is investing in developing it dealer network.

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Exclusive Report by M. Yousuf Shaikh

Also the company is investing to develop its vendors The Company at the moment has no rights for exports, however on a country to country basis permission maybe obtained

YAMAHA MOTORCYCLES Yamaha Building Motorcycle Plant In Pakistan TOKYO (Kyodo) -- Yamaha Motor Co. will build a motorcycle plant in Pakistan with the aim of starting production in 2015, in an attempt to expand its business in an untapped emerging market, company President Hiroyuki Yanagi said Friday in an interview with Kyodo News. Yamaha will first invest 1.3 billion yen in the Pakistani plant before increasing the amount to a total of 10 billion yen by 2020 to raise its production capacity to 400,000 units a year. "Motorcycles sold now in Pakistan are mainly Chinese-made, but they are very old," Yanagi said. "We'd like to stimulate the market by introducing new models." Yamaha has set its initial production target at 40,000 units per year. The motorcycle market in Pakistan is expected to double to 3 million units in 2020 from the 2013 level of 1.5 million, according to the Japanese manufacturer.

QINGQI MOTORS QINGQI is only identified Chinese brand in Pakistan with Chinese brand name, investment and expertise.

PAKISTAN ORIGION NAMELESS CHINESE MOTORCYCLES There is no well known Chinese motorcycle and parts manufacturing company still establish in Pakistan except the QINGQI but all other local brands adopted to call Chinese motorcycle for their manufactured products due to import of critical parts from China by well known OEM parts suppliers. That is why we called local brands as unknown Chinese brands. All local Chinese brands together producing the 1.3 million of Pakistan’s total motorcycle production and enjoying 55% share of market

CAHPTER 6 6.1; INVESTMENT OPPURTUNITIES AND PROSPECTS; PCMIC takes pleasure in portraying

several investment opportunities pertaining to rehabilitation and modernizing its member’s selected factories and establishment of new factories in the motorcycle sectors of auto industry of Pakistan. Pakistan will be amongst the top five countries producing and exporting high quality motorcycles in the next few years. It is suggested to global Chinese manufacturers to grab the opportunities before entering the Indian and other manufacturers in Pakistan as they all planed. With the hard work of PCMIC members & associates, Pakistan Motorcycle Industry today stands at the turning point from where the sales and production will touch the ever highest in the history of the country. It is encouraging that after investing by Chinese firms in Pakistan motorcycle industrial sector, Industry should increased its motorcycle production capacity to 2750,000 vehicles annually keeping in mind the growing local demand, one of the largest motorcycle markets in the world, and export potential to regional countries. Specialized International/Chinese Co mp ani es , Busi ne ssme n, a nd Financiers are invited to participate in opportunities that may achieve economic viability and create rapid positive revenues. The concept is that the investors and their supporting teams would rehabilitate and manage the plant on their account against a share of production achieved; for a negotiated period of time.

The strong points of these opportunities are: High local demand of the products. Availability of trained and experienced manpower. Availability of local raw

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materials. Adequate investment legislations and favorable terms for agreement. Fast return on investment. The PCMIC expresses its willingness to assist investors with all the necessary clarifications as well as facilitating essential visits to the factories (if required). Interested investors are kindly requested to submit their inquiries to chairman PCMIC at pakchina.mic@gmail.com at their earliest. The PCMIC report on motorcycle industry of Pakistan is the only consolidated collection of investment in the motorcycle sector in the county which provides a timely and reliable source of information primarily for business (especially investors), and also for investment promotion agencies, government policy makers, academics, and regional and int ernational organizations in Pakistan and other regions. The report will assist entrepreneurs in making sound investment decisions and policy makers in formulating consistent and coherent strategy decisions. This version is composed of information compiled by the PCMIC experts and marketplace member.

6.2; Introduction to Investment Sectors: PCMIC recommends to Chinese motorcycle manufacturers to investment in Pakistan’s motorcycle sector as there are numerous investment opportunities in Pakistan. I would like to invite them to take part in the automotive sector. The avenues exist in setting up new technology motorcycle and engine manufacturing units and for their integral parts which are presently being imported. The PCMIC offers to assist Chinese manufacturers in finding local partners for them since the Government is interested in promoting competition in the auto sector.

Currently Japanese brand motorcycle manufacturers have 45 percent share in the motorcycle sector, whereas the Chinese share in the latter is 55 percent. Notably, about during 2010-11, motorcycle production was way beyond at 1,535,427 units. Any manufacturer can invest in Pakistan under the Auto Industry Development Programme (AIDP) or the Tariff Based System (TBS).The government intends to make the existing policy regime more flexible for new entrants in order to attract foreign investment. An amended policy is expected soon and it is emphasized that Chinese manufacturers would be persuaded to explore the Pakistani market. For any query with respect to this report or any other content requirement, please contact aut hor at pakchina.mic@gmail.com PCMIC is pleased to provide the following services to foreign or local Investors in the Auto Industrial sector. • Undertake customized market research and statistical reports on the Pakistan Auto Industry market. • Identify automotive products; both vehicles and components for import and export. • Help find distributors and suppliers of automotive products. • Identify and evaluate potential cooperative or joint venture partners. • Help setup dependable business networks in Pakistan. • Conduct legal, financial, human resources, • Technical management and feasibility studies. • Help negotiate automotive business deals. • Help with liaison and management of business ventures i n Paki st an. • Help identify and locate local executives and employees. • Walk our customers through the Pakistani maze of bureaucracy. • Services on a retainer basis are available.

The investment opportunities in PCMIC report as a major two-fold objective. Firstly, The Pakistan/China Motorcycle Industry has an emerging investment o p p o r t un i t y i n p u bl i c / p r i v at e partnerships to set up an inventive Research & Development Production Facility. Secondly, this is a much needed industrial project which is profitable and feasible due to a big demand in our local market. This prompts me to draw the kind and valuable attention of prospective investors towards what I mention below. The Pakistan Auto Industry has been around for more than 60 years, and today is considered to be a source that is highly important to our country’s economy. The motorcycle industry employs an estimated 100,000 people. Over 2 million motorcycles are manufactured annually. All auto assemblers-cum-manufacturers at present are Pakistani. The majority of the motorcycles being manufactured in Pakistan are of 70CC capacity. Most of the parts used in the frame, suspension, engine etc are interchangeable, or can be used with minor adjustments. But all Pakistani motorcycle manufacturers still depend on foreign technology and the country is still unable to design and produce its own motorcycle; especially the engine and key parts. This makes it difficult for the industry to develop and produce new models/designs to fulfill the demand of the market. Pa ki st a n’ s C hi n ese d o mi na t ed motorcycle assembling continues to see a strong growth in terms of production and marketing and are forcing the industry and investors to explore alternative opportunities; including working with international partners and e xp an d i n g i n t o r e s ea r c h a n d development (R&D) services. The Motorcycle production has increased from 100,000 units at the start of the century, to around two million units per year and expected three million in 2020. Despite this fact, Pakistan still does

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Monthly AutoMark Magazine

not have any dedicated manufacturer of the key parts of motorcycles such as the Complete Engine, Carburetor, Drive Chain, Timing/Cam Chain, hundreds of separate engine components (Cylinder Head, Ring/Piston Set, Ball Bearings, Bushes, Timing Chain, Crankshaft, and many other components) and also the Handle Switches, Lock Sets, Wheels Hubs & Breaks, Complete Front and Rear Shock-absorbers in dismantled condition and Speedometer Movements; therefore these are 90% imported through different channels. Moreover, there was a time that motorcycle production was as low as 100,000 units per year whereas this figure now stands at two million units per year. This fact makes it economically feasible to produce ancillary items; mainly the motorcycle engines. The engine is a core part of the motorcycle, and the demand for motorcycle engines is directly related to the demand for motorcycles. The motorcycle engine market has great potential as a result of the booming motorcycle demand. Better performance motorcycle engines are needed due to the demand of shifting from standard two-wheel motorcycles to more sophisticated and technically advanced models. Motorcycle engines are in the process of upgrading to low emission, low vibration, low noise and low heat load engines with displacements over 125cc. Along with the sales of three-wheeled motorcycles (also known as tri-wheelers) in Pakistan, demands for their engines are also growing fast. The three-wheeled motorcycle manufacturers of Pakistan also do not have the ability to produce their required engines. Also, the technology to produce such engines is different from those of two-wheeled motorcycle engines due to their exclusive features. Hence, international market demands will be satisfied by those manufacturers that have the R & D and manu f act ur ing cap ab il it ies f or

three-wheeled motorcycle engines as well. Our motorcycle industry is divided into two markets. The mainstream market consists of manufacturers who are from overseas joint ventures. The other market is the niche market, consisting of SMEs producing Chinese motorcycles. These are Pakistani-owned companies that depend on design and production technology from abroad. In this market most of the companies are Pakistani and products are sold domestically, where there is little foreign competition. Most of the involved parties have not been utilizing enough technology in terms of design, manufacture and engineering. Due to the importance of the Pakistan motorcycle industry, the Pakistan China Motorcycle Industry Council (PCMIC) has planned to invite foreign investors to set up a support programme for a Motorcycles and Parts Research and Development Institute & Production Facility under the industrial and services cluster group. This will enable specialized industries to have the capability to design and produce motorcycle engines and other parts which are still not indigenized in Pakistan. It will be a profitable and risk free investment for foreign investors which helps strengthen the niche market in the future and also provide technology for design, production and engineering for Pakistani parts-makers in order to raise their capabilities. The PCMIC seeks a strategic planning alliance in a public/private partnership that should be targeted at stand-alone parts design and manufacturing. The project is intended to create an automobile platform for Pakistan that would be relayed to the private sector. The second phase of the project would ad d res s aut omo bil e and par ts manufacturers, and the PCMIC would collaborate with various Government Departments like the Military Vehicles

Research & Development Establishment (MV RD E), MoS T, En gi n eer i ng Development Board (EDB) etc. With such a coordinated approach it will be possible to include niche areas of interest to specialist Government Organizations in the development effort. four areas would be targetable:• New design new technology Motorcycle & Engine manufacturing units & their integrals parts presently imported • Multipurpose Larger Sized Engines (200 cc and above) • After Sales parts The proposed project will be carried out by China based Chinese Manufactures and Pakistan’s Chinese Motorcycle Assemblers through PCMIC, in cooperation with the MVRDE, Local parts Vendors and financial institutes. The project is expected to be co-financed by all the stakeholders and the Government. The Government is being requested to kindly provide interest free loans & allow a tax holiday for five years to this project. If this happens, it will be in the interests of all to design the cleanest possible engine within reasonable cost and performance constraints will require a “Team Approach” and the project will require intensive investment & huge financial resources. The support and guidance provided by the Government would be a great instrument for the phenomenal growth of this sector. PCMIC experts prepare expansion plans for an Engine Assembly Plant with a built-in Quality Assurance System consisting of the Longest Conveyor assisted Motorcycle Assembly Facilities integrated with “Quality Gates” and Test Equipment to meet ever increasing market requirements.

THANK YOU & Welcome to Pakistan

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

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Septembert-2013

Monthly AutoMark Magazine

Exclusive Article by Ali Baig

Digital Speedometers Technology AutomotiveDevices is an Automotive Electronics systems supplier for OEMs with specialization in Driver Information Systems which majorly includes Instrument Clusters for 2 wheelers, 3 wheelers, 4 wheelers and Tractors. We are pioneer in Pakistan to locally desi gn, d evel op an d manu f acture digital Instrument clusters and other automotive electronic assemblies. Our Digital speedometers are designed to bear harsh road conditions of Pakistan and have best visibility in sunlight as well as in night. Further, there is no impact of rain or no battery condition in motorcycle on our speedometer products since all of our products are manufactured using Automotive Grad e compo nent s wi th lat est miniaturization technologies to qualify all automotive standards (AEC Q100 and Q101). We are committed to keep our products in perfect pace with the fast growing demands of automotive industry and we thrive to achieve the highest level of you r imagi nati on s t hrou gh an exp erien ced engi neeri ng team. Reliability, Durability, Safety and Control are most commonly pronounced in the company while products are designed and engineered from concept to realization. This is reason all of our products are offered with minimum warranty of 1 year with un-limited mileage for first time in Pakistan.

which then turns the speedometer mechanism itself and show speed. Whereas in digital speedometers, a rotation sensor mounted in the transmission or front wheel delivers a series of electronic pulses whose frequency corresponds to the average rotational speed of the driveshaft, and therefore the vehicle’s speed.

Technology Overview Digital Speedometers Vs Mechanical Speedometers

This is because digital speedometers use

Technology Comparison: Mechanical speedometers use a cable driven by a gear attached to the hub of the front wheel. The speedometer gear assembly will turn a speedometer cable

Technology Shift: Mechanical speedometers have been widely used over a long period of time. It’s only few years that digital speedometers have gained lot of popularity and many manufacturers started to switch to digital speedometers in motorcycles after cars since Mechanical speedometers have lot of features limitations versus digital ones. Digital Speedometers are known these days as DIGITAL INSTRUMENT CLUSTERS since with technology advancement they have unlimited features options and showing speed, engine rpm, time, trip meter, fuel amount, real time fuel consumption rate, temperature, battery status and many more features.

The digital speedometershave many advantages over the mechanical speedometer: More accurate and reliable readings:

speed sensors which actually reads the vehicle’s moving rate, and then sending r es u l t s t o t he s p e e d o me t e r ’s microprocessor, which displays speed and other parameters accurately over LCD display.

More readable than the clock-like display of analog ones: Another advantage is that digital speedometers display the speed measurement in numbers, which is a lot more readable than the clock-like display of analogue ones. Drivers suffering from deteriorated vision would surely prefer digital ones as they would no longer need to stare at the pointers and the somehow unclear lines between the digits on the clock-like display.

Long life and less prone to failures: Digital meters usually have a much lower chance of failing due to almost no moving parts or gears. Miniaturized surface mount parts have long life and no damage on vibrations. Harsh environment has no impact on digital instrument clusters because of wide range temperature performance of components.

More features and Information about Vehicle Performance: Digital Instrument clusters have unlimited possibilities to display vehicle information. One of main feature of interest these days for drivers is display of real time oraverage fuel consumption rate to monitor efficiency of vehicle.

More aesthetic appeal: LCD displays in digital speedometers have best visibility in night with different colors option and thus more attraction to the vehicle driver. Also LCD displays have best display in morning in sunlight with anti-glare feature.

www.automark.pk | September-2013 | Page 44

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Upcoming Event - Press Release

1st Customer Satisfaction Awards 2013

IMPORTANT ANNOUNCEMENTS

Mr. Muhammad Sabir Shaikh , taken charge of Chairman APMA for the year 2013-14 on 1st september 2013.

M. Irfan Shaikh (Ex-Director Sales & Marketing), M/s. Hinopak Motors has passed away on Sep 4, 2013. He were admitted in Agha Khan hospital for an operation.

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

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