Automark magazine sep 2014

Contents

September-2014

Exclusives Articles 13 Federal Ministries, government departments need attitude changeak

Inside

Reviews/Reports 24 Booming motorcycle sale may lead to traffic chaos in city

by Ali Hassan

14 Pakistani Car assemblers Still unhappy over falling used cars imports

by Owais Khan

19 Costly Honda bikes Excel in production

by Syed Hassan

Book Review 36 American wheels, Chinese roads

25 Faster, Better, Cheaper Motorbike

33 Can vehicle management be reformed in Sindh?

Event PR 20 Dealer's inventive program

by Road Prince Motorcycle

Courtesy by Engr. IHT Farooqui

38 Crown Group rewarded for

Price List

43 Pakistan companies participate in

9th Consumer Choice awards

CBI export coaching program

40 Motorcycle Price LIst 41 Car/Light commercial vehicle price list

automark magazine

www.automark.pk

September-2014 edition Volume 07, Issue 9

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

Monthly

AUTOMARK International Editor-in-chief Muhammed Hanif Memon Technical Editor

Advisors

Muhammad Shahzad

Advertising Manager Tahir Siddiqui

Circulation Manager Abdul Khaliq

Graphic Designer Salman Hanif

Web Master Murtaza Hanif

CONTRIBUTING IN THIS ISSUE M. Yousuf Shaikh Ali Hassan M. Owais Khan Engr. Asif Masood Mohammed Laman

Imtiaz Rastgar CEO, Rastgar Group & CBI External Expert, Ex-chairman EDB Islamabad Engr. IHT Farooqui GM Plant P.M. Auto Industries Hyderabad Muhammad Yousuf Shaikh Founder & Chairman Pakistan China Motorcycle Industry Council Karachi Syed Mansoor Rizvi Principal Officer M/s. CNH Services (Pvt) Ltd. Karachi Mr. Ashfaq Memon Senior Manager Marketing Memon Motors (Pvt) Ltd. Maker of Super Star Motorcycles Hyderabad

Active Communications Tel : 021-32603371 Mobile: 0321-2203815 E-mail: automarkpk@gmail.com website: www.automark.pk

AutoMark Canada Office Managing Editor Mohammad Shahzad S.A.E. D.M.P. 41 Jordana Drive Markham (Toronto) Canada L3S 3N8 Phone: 905-472-8282 Email: automarkcanada@gmail.com AutoMark REGD: MC-1330 Published every month by M. Hanif Memon The views expressed by contributing writers and comments do not necessarily reflect the views and policies of the Monthly AutoMark magazine's management

Wakeup call for Competition Commission of Pakistan The Competition Commission of India imposed a penalty of Rs. 2,545 crore on 14 carmakers for violating trade norms in the spare parts markets.

The fine has been calculated as 2 per cent of car makers' average turnover and the penalty is to be deposited within 60 days.

Tata Motors has been fined Rs. 1,346 crore whereas Maruti Suzuki will pay a fine to the tune of Rs. 471 crore. Mahindra & Mahindra has been fined Rs. 292 crore.

As per the regulator car companies were having a monopolistic control over spare parts and diagnostic tools of their respective brands and charged arbitrary and high prices for their spare parts.

According to foreign media reports, after scrutiny from Chinese regu lators impacted several carmakers, with two of them – Audi and Mercedes – facing fines of their own, the authorities have found a dozen Japanese parts makers guilty of breaching antitrust laws.

The two car brands, along with Audi, Chrysler and other automakers have been under investigation

by China’s regulators, who have already given fines worth more than $200 million to Japanese auto parts suppliers for allegedly fixing their prices.

This development in India is certainly a wakeup call for the Competition Commission of Pakistan (CCP) as c ountry’s local as semb lers also offer spare parts, accessories and lubricants claimed to be genuine at the authorized showrooms.

The prices of parts available at authorized dealers’ showrooms are costlier than the markets’ rates.

Even the service charges and car wash rates cannot be matched with the market prices.

As the auto industry is already notorious for operating under a cartel, their authorized dealers are also ahead in overcharging for car service, parts and tuning rates.

The dealers know that the person who has purchased car of over Rs one million to Rs 1.9 million will not have any problem in paying peanut amount but for the people buying 800-1000cc cars, these charges are too high. As a result many buyers of 800-1000cc cars refrain from visiting the authorized dealers after initial one to three checks.

CCP should investigate the prices of parts, accessories and lubricants available at the authorised showrooms and compare it with products available in the markets. Besides, CCP should also check the rates of service charges in these showrooms.

Exclusive Article by Ali Hassan

Monthly AutoMark International

Federal Ministries, government departments need attitude change Chairman APMA Sabir Shaikh said that for the last one decade the small assemblers have been facing these kind of problems.

T Federal government’s departments including the Federal Board of Revenue (FBR) need to change their attitude otherwise the situation pertaining to routine matters will remain the same.

After June 2006, the industry continues to operate under tremendous pressure coupled with step motherly treatment of federal government departments and ministries. Till today, bureaucratic hurdles and officials’ lethargic attitude still exist.

In the last 10 years, same people in the bureaucracy have been sitting on their seats who have seen three different governments in their tenure.

Like past the Federal Board of Revenue has recently issued sales tax audit notices to every motorcycle assemblers and their vendors. “Are these part of the policies which have been adopted in the last 10 years or there is some kind of pressure from the EDB,” chairman Association of Pakistan Motorcycle Assemblers (APMA), Mohammad Sabir Shaikh said. The language of the notices clear reflects the secret hand of the EDB in formulating the notices, he added.

The turnover of three to four big auto secto r assem bler s of c ar s a nd motorcycles is bigger than 500 small assemblers and vendors. But the government, like past practice, has always created problems for small units leaving big assemblers to operate freely.

According to sales tax notices, the FBR demands sales tax records under section 37 and 38 (2) of the sales tax act 1990 for the period 1.07.2011 to

He urged the PM, NS, FM Ishaq Dar and FBR chairman to stop these kinds of bottlenecks as the industry has already been surviving under stiff business 30.6.2013.

T h e FB R i nf or m e d t h e f ie l d com missi oners to ex am ine t he assemblers and vendors of motorcycles in their areas that are they following SRO 656/2006 dated 22.6.2006 and check have they procured the parts and components from the importers and tr ad ers i nstead of ori gi nal manufacturers.

It is also notable that the genuine manufacturers supplying parts to the OEMs are making parts by themselves or importing these parts from China as the cost of production of auto parts in China is much lower than Pakistan.

Assemblers have been asked to submit following documents for sales tax audit.

1) Purchase register and sales register.

2) Purchase invoices and bill of entries of imports.

3) Monthly sales tax returns and cash payment receipts to NBP. 4) C omp liance of S RO 656/2006. These documents are p rovided to the EDB .

5) Utility bills

Chairman APMA Mohammad Sabir Shaikh said that for the last one decade the small assemblers have been facing these kind of problems.

He urged the Prime Minister Nawaz Sharif, Finance Minister Ishaq Dar and FBR chairman to stop these kinds of bottlenecks as the industry has already been surviving under stiff business and political environment.

The government should refrain from creating hardships and support the industry in order to pull out the assemblers from hot water, he said.

He urged the government to appoint CEO of the EDB immediately and try to fill this post by taking a competent person from the private sector or the industry.

Sabir said that the industry and the vendors were highly hopeful after taking over of PML-N government in 2013 but so far the political crisis appears to have deepened which has put on hold the future investment plans by the local industry.

He said there is a need to end the monopoly of big assemblers and vendors who enjoy upper hand in all the policy making in every government. As a result, th e voice of small units remains unheard.

The political heat engulfing Islamabad mainly and other parts of the country since August 14 because of sit in by Pakistan Tehreek-e-Insaf and Pakistan Awami Tehreek is one of the main problems of people who are looking forward for change in government that can br ing good ind u st ri al a nd government policies besides resolution of their genuine problems...

www.automark.pk | September-2014 | Page 13

Exclusive Article by Owais Khan

Pakistani Car assemblers

Still unhappy over falling used cars imports T

he assemblers of cars are still unsatisfied over sharp drop in import of used cars (from 660cc to 3,000cc) vehicles saying that the import continues despite government’s decision of restricting the arrival through various measures.

Ac c ord i ng to P ak ist an B u rea u of Statistics (PBS), import of cars plunged by 44 per cent in 2013-2014 to $177 m illion as compared to $313.5 million in 2012-2013. But these figures do not impress the local car industry.

CEO of Indus Motor Company (IMC) Mr. Parvez Ghias gave a press statement with reference to IMC’s results of 201314 that the industry was marred by various factor s such as sluggish economic growth and the inventory overhang of used cars.

The Government’s decision to restrict the age limit of imported used vehicles to three years lent some respite to the auto industry however, despite the restriction, over 30,000 used vehicles (all types) still entered the market during the year as traders took advantage of the 50 per cent duty and sales tax concession provided for hybrid vehicles and targeted hybrid imports, IMC press release said.

IMC reported a profit after tax of Rs

3.87 billion in 2013-14, up 15 per cent over the corresponding period last year.

The sales revenue was Rs 57 billion, down 11 per cent compared to Rs 64 billion in 2012-13.

IMC’s sales of Toyota and Daihatsu brand (CKD and CBU) vehicles in 201314 were down 11 per cent to 34,470 units, compared to 38,517 units sold in the prior year. The decline in sales is attributable to the run-out of the 10thGeneration Corolla and re-tooling of the assembly lines requiring plant closures. Additionally, the imposition of 10 per cent federal excise duty (FED) on the Toyota Fortuner adversely impacted the company’s volumetric sal es f or th e fi rst SUV to b e manufactured locally.

Based on the financial results of year ended June 30, 2014, the IMC board announced a final cash dividend of Rs 23.50 per share, in addition to an earlier interim dividend of Rs 6 per share, bringing the cumulative dividend paid for the fiscal year at Rs 29.50 per share.

This shows that the main reason of sales decline has nothing to do with import of used cars. The industry should have capitalized falling import of used cars and industry’s sales should have risen by 40-50 per cent. However, it did not happen as car buyers had much better

options available in old stocks of used cars in the markets at the price of costly locally assembled cars. Many consumers still consider before purchasing costly locally assembled cars and many feel satisfied by running fully load ed imported used cars.

Sales of locally manufactured cars remained flat at 118,102 units in 201314, compared to 118,830 units in 201213.

Only sales of Honda City, in 1,300cc and above, excelled by 22 per cent to 13,741 units, compared to 11,285 units in 201213.

Toyota Corolla sales, however, dipped to 29,087 from 32,608 units followed

by Honda Civic to 9,933 from 9,950 units; Suzuki Swift to 5,128 from 6,096 units and Suzuki Liana to 161 from 164 units.

Pak Suzuki Motor Company Limited (PSMCL) has not officially announced discontinuation of Suzuki Liana but vendors said that the sedan production has already come to a halt. This is evident from its p rod uction, 72 units each in October and December 2013.

Pakistan Automotive Manufacturers Association (Pama) figures showed that sales of Suzuki Cultus improved by 13pc to 14,682 from 13,308 units in 2012-13.

PSMCL’s WagonR production and sales

www.automark.pk | September | Page 14

Monthly AutoMark International

CEO of Indus Motor Company (IMC) Mr. Parvez Ghias gave a press statement with reference to IMC’s results of 2013-14 that the industry was marred by various factors such as sluggish economic growth and the inventory overhang of used cars. stood at 2,208 and 1,621 units, respectively, during April to June 201314.

Hyundai Santro production resumed in January 2014 with 82 units after a long gap bu t th e company end ed its production in February 2014 with 128 units. From January to June 2014, production and sales of Santro were registered at 210 and 152 u nits respectively.

In 800cc vehicles, Suzuki Mehran’s sale plunged by nine per cent to 29,509 units, compared to 32,407 units. However, Bolan sales grew by 8.8pc to 14,088 units from 12,941 units.

Analysts however attributed stagnant volu mes to high er impor ted car inventory and imposition of higher taxes.

Weak sales of Toyota Corolla in the last three months were registered, as people deferred their buying till the availability of new model.

According to figures of All Pakistan Motor Dealers Association (APMDA) import of used cars dropped sharply year-on-year in 2013-14, but local assemblers who had been lobbying against the arrival of second-hand vehicles have failed to take advantage of the situation as their sales remained subdued.

Data shows that import of used vehicles (from 660cc to above 3,000cc including 4x4 jeeps) plunged to 22,185 units in 2013-2014 compared to 44,767 in 201213.

The government netted around Rs9 billion in customs duty collection in 2013-14 from used vehicle import compared to Rs18bn in 2012-13.

Used cars arrived under transfer of residence, personal baggage and gift schemes.

Around 16,193 units of up to 1,000cc cars were imported compared to 26,525 units in 2012-13. The customs duty collections consequently fell to Rs 3.46bn from Rs4.2bn. From 1,0011,300cc, only 37 cars were imported as compared to 2,193 units.

Imports of 1,301 to 1,500cc cars stood at 2,646 units compared to 12,255. Only

two units were arrived in category of 1,501cc to 1,600cc in 2013-14 compared to 48 units in 2012-13.

Total imports in 1,601-1,800cc stood at 2,364 units compared to 2,427 units, while in 1,801cc- 3,000cc segment, only 35 units came from abroad compared to 61.

Only 18 units of above 3,000cc vehicles were imported during 2013-14. The number was 82 in 2012-13. In jeeps (4x4), around 890 units came compared to 1,176.

APMDA Chairman H.M. Shahzad said local car assemblers failed to raise their sales amid persistent decline in imports of used cars.

Year-on-year sales of locally produced cars remained flat in 2013-14.

Cut in age limit of used cars to three from five years coupled with reduction in depreciation to two years’ limit has depressed the import of used cars and government’s revenue collection, he said.

In budget 2014-15, the government increased the import duties on used cars.

Besides, changes in withholding tax would also affect the retail price of used cars. “People may now find it harder to afford a car,” said Shahzad.

In a letter to Finance Minister Ishaq Dar, APMDA ch air man said the government must realise that in the absence of any decent public transport system, car is a necessity and not a luxury.

“Pakistanis have become the highest taxed people in the world as everything is taxed directly or indirectly,” he said.

Pak Suzuki Motors (PSMC) announced 1H2014 profits of Rs1.03bn (EPS Rs12.6) which is down 10.5 per cent against Rs1.16bn (EPS Rs14.1) in the same period last year.

During 1H2014, revenues increased to Rs29.1bn from Rs26.9bn in 1H2013, up 8.3 per cent YoY. However, volumetric sales increased to 42,116 units, up 1.9 per cent, compared to 41,326 units in 1H2013. Gross margins improved by

In budget 2014-15, the government increased the import duties on used cars. Besides, changes in withholding tax would also affect the retail price of used cars. “People may now find it harder to afford a car,” said Shahzad.

177bps to 7.6 per cent primarily due to lesser increase in cost of sales, on account of Pak Rupee appreciation, compared to increase in sales revenues.

Other income declined massively by 47 per cent to Rs296mn compared to Rs564mn in 1H2013. Distribution cost increased by 70.5 per cent to Rs410mn while administrative cost increased by 22 p er cent to Rs5 37mn in 1H2014. Furthermore, total tax of the company also surged massively by 175 per cent to Rs424mn compared to Rs154mn because company shifted from turnover tax last year to corporate tax now.

During the 2Q2014, sales of the company increased by 12.5 per cent QoQ to Rs15.4bn while gross profits increased to Rs1.3bn, up 29.2 per cent. As a result, company reported profits of Rs592mn (EPS Rs7.2) compared to Rs443mn (EPS Rs5.4) in 1Q2014.

Honda Atlas Cars (HCAR) posted 1QFY15 EPS of Rs4.41 versus EPS of Rs2.3 compared to same quarter last year, up 93 per cent YoY. Higher earnings are primarily due to significant rise in gross margin.

That said, the company during 1Q (AprJun 2014) posted gross margin of impressive 12.7 per cent versus 7.5 per cent last year (Apr-Jun 2013). Sharp appreciation in Pak rupee versus the Japanese Yen reduced production cost wh ich improved company’s gross margin.

Company’s revenue grew by 3.4 per cent YoY to Rs11.3bnn primarily due to 6 per cent rise in volumetric sales.

On QoQ basis, HCAR’s EPS remained almost flat. However, it is to be noted that the company’s corporate tax remained higher in 1QFY15 versus 4QFY14.....

www.automark.pk | September-2014 | Page 15

Imported Vehicles Detail Figures - Statistics

www.automark.pk | Septmber-2014 | Page 16

Monthly AutoMark International

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Monthly AutoMark International

Automotive Sector - Update

India auto component makers ink pact with Pakistani counterparts Auto Component Manufactur er s Association of India (ACMA) has joined hands with its Pakistani counterpart which aims at exploring viability of working together on skill development in Pakistan as well as building supply chains th rou gh Wagah by r oad .

ACMA and Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) signed an MoU in this regard last Friday during the visit of a delegation from ACMA, under its president and managing director of Rane TRW Steering Systems Ltd Harish Lakshman, to Pakistan, a release said here.

The visit was part of the Indian Council for Research on International Economic Relations (ICRIER) initiative on the

normalisation of trade between the two countries, it said.

Usm an A sla m M alik, Cha irma n PAAPAM, and chairman of Kortech Auto Industries led the PAAPAM side, the release said.

"This is a significant development where both ACMA and PAAPAM, the leading auto component bodies have come together for trade facilitation and growth of automotive indu str y in their respective countries," Lakshman said.

There is an urgent need to develop medium and long-term investments plans that should be on reciprocal basis to build greater ties, between the two sides, he said.

With India having a larger reach in the world of auto market, ACMA believes

Pakistan's participation will strengthen India's position in the region as well, Lakshman said.

The meeting at Lahore brought together participants from the two associations with an objective to exchange views on the potential of auto component trade between India and Pakistan; understand the challenges of the automotive parts manufacturers on either sides; and develop a common understanding for the way forward, including the scope for joint initiatives, the release said.

As part of the understanding, the two associations plan to meet at least twice a year to facilitate business dialogue and people-to-people contact, ACMA said in the releas

PCSIR, country’s premier research institution, in dire straits The country’s most prestigious scientific research institution in the public sector, the Pakistan Council for Scientific and Industrial Research (PCSIR), has been in desperate Knancial straits since the federal government withdrew from it the right to spend its self-generated income on research.

According to sources, the test and analysis work th at has been th e laboratory’s only income generating resources for decades have literally come to a standstill since March as there is no money to buy chemicals or repair equipment.

The financial crisis, they say, have not only affected current employees who were being paid salaries after months of delay but have also hit pensioners (especially in Karachi) who have not been paid a single penny by th e federal government for three months. `The PCSIR, like other public sector research institutions in the country, has been facing a monetary crunch for almost eigh t years as the federal government has not provided any funds for research and development projects to the institution. `Instead of increasing funds and paying salaries in time, the government has

dealt another blow to the institution by depriving it of its self-generated amount that used to help the institution pay utility bills in time, repair equipment and buy chemicals,` said a high-ranking official in the PCSIR. He said the officials in Islamabad had been malcing an unrealistic demand for some time that they wanted to pay pensioners and employees from the laboratory`s meagre self-generated amount.

The institution which has been working since the 1950s has 11 laboratories and a nu m be r of h u m an r esou r c e development centres across the country where hundreds of scientists, engineers and technologists aided by more than a thousand technical and skilled staff are working.

The letter directed officials to stop using self-generated funds collected through tests and analysis services that the institution provided to the private sector.

The PCSIR earned about Rs7 million a mont h th r ou gh t h ese ser vic es.

‘We h ave been asked to obtai n the ministry`s approval for funds’ utilisation but the official process takes so long that we have no option but to stop our services for industrial

clients,’ said a researcher currently servi ng at th e PCS IR, Kar ach i Laboratories.

Ac c or d ing t o h im , t h e PCS IR laboratories are facing similar conditions though the Karachi laboratories have been affected the most since the city is home to a large number of industries that seek testing and analysis services to fulfil requirements for export and import. Besides, the PCSIR Karachi labs have extensive test and analysis facilities not available anywhere in Pakistan. The PCSIR act, he said, allowed the director general to utilise 60pc of self-generated amount to buy necessary consumables and malce repairs.

An ISO-9000 and ISO-17025 certified institution, the PCSIR has developed more th an 1,187 pr ocesses and technologies, many of which have been leased out to commercial concerns. Its 511 patents include 108 foreign patents while it has about 7,640 research publications.

According to them, PCSIR’s testing services covered almost all sciences except nuclear science.

Major export products were certified by the PCSIR making them acceptable worldwide...

www.automark.pk | September 2014 | Page 18

Exclusive Article by Owais Khan

Monthly AutoMark International

215,897 (2013-14)

114,119 (2013-14)

109,935 (2013-14)

United 70cc bike has emerged as the country’s second highest bike assembler with 215,897 units in 2013-2014 as compared to 142,133 units in 2012-2013, 100,707 in 2011-2012 and 52,250 in 2010-2011.

C

ostly Honda motorcycles continued to hold its domination in the overall production of over 1.6 million two wheelers in the country.

Honda bikes’ demand was evident from its p ersistent growth in its production which reached to 639,506 units in 2013-2014 from 636,420 in 2012-2013, 588,106 in 2011-2012 and 570,777 in 2010-2011. It suggests that the company is rolling out an average 50,000 units per month.

A vast price difference between 70cc bike of Honda and Ch inese bike exists but the buyers from rural areas mostly growers are not ready to compromise on the quality and they still prefer purchasing Honda bikes. High quality h as remained one of the strongest points of the Atlas Honda Pakistan (AHP).

Chinese bikes can be purchased at Rs 44,000 while Honda CD-70cc costs Rs 70,000. However, in Karachi, Honda bikes hold only 10 per cent market share due to snatching and jacking up of bikes because of their high resale value. But Honda literally rules in Punjab both in 70cc and 125cc segment.

In contrast, another Japanese bike maker Pak Suzuki Motor Company Limited (PSMCL) comes on 10th position with production of 24,501 units in 2013-2014 which was 20,361 in 20122013, 19,105 units in 2011-2012 and 20,262 units in 2010-2011.

Out of 29 main producers of bikes in the country, around eight Chinese bike makers exist in between number one position of Honda and 10th position of Pak Suzuki.

United 70cc bike has emerged as the country’s second highest bike assembler with 215,897 units in 2013-

2014 as compared to 142,133 units in 2012-2013, 100,707 in 2011-2012 and 52,250 in 2010-2011.

Super Power enjoys third position with production of 114,119 units in 20132014 as compared to 104,564 units in 2012-2013.

Road Prince bikes come on the fourth position with production of 109,935 units in 2013-2014 as compared t o 6 5 ,235 u nit s i n 2 012-2 013.

The production of Unique, Super Star, High Speed and ZXMCO stood at 95,459, 75,181, 40,787 and 38,770 units as compared to 142,427, 37,915, 44,212 a nd 2 6,7 47 u ni ts r espec ti vely.

Around nine bike makers have less than 10,000 units per year production w hile eight bike assemblers have less th an 20,000 units per year production.

The increase in bike production must have caused traffic mess in the country but no one deny that allowing Chinese investment in bike assembling by the Pervez Musharraf government has proved a big relief for many people to own a bike at cheap prices.

In Karachi alone over half a million motorcycles have found way on the roads over the past five years. Since 2 00 9, th e ex cise and ta xa tion department of Sindh has registered 1.34 2 mil lion new m otor bikes.

More than half of them are meant for Karachi, as the rest were registered in other districts of the province.

T her e are definitely over half a million motorbikes which have become part of Karachi traffic during the past five years.

Because of pathetic public and private transport, two wheelers have emerged as one of the most sought after modes of transport.

Refinery operators believe that one of

www.automark.pk | September-2014 | Page 19

the main reasons of rising petrol demand is soaring bike production in the country as two wheelers consume about 55-60 per cent of total sales of petrol.

Increase in bike production also augurs well for the vendor development and opening of more job avenues in both a sse mb li ng a nd vend o r u ni ts.

Corporate Tour - Exclusive Report

DEALER's INCENTIVE PROGRAM by ROAD PRINCE MOTORCYCLES FUTURE IS HERE - FUTURE IS NOW Introducing first time in Pakistan ROAD PRINCE HYBRID MOTORBIKE Pioneering in motorbike engineering, innovation, customer satisfaction and strong dealerships across the country, Road Prince Team [RPT] got set for another voyage and took its strong dealership holders to an exciting and memorable journey across Europe and other exciting parts of the World.

Exuberant Road Prince Team was accompanied by 61 Dealers on the incentive tour to Moscow the city of billionaires , Saint Petersburg famous for landmarks & recreation, Turkey and Dubai which everybody knows, for unmatched 9days.

PAKIST AN IND EP EN DE NC E DAY: The main aim of the visit was to motivate and strengthen RP-Dealer bonds and teamwork. Not least to mention, the entire team of Dealers which was led by Mr. Tanveer Ahmad , CEO Omega Industries [Road Prince Motorcylces] -along with Mr. Shahid Naseem, Director Omega Industries along with Mr. Faisal Mufti, Group Manager marketing, celebrated their Independence Day of Pakistan, i.e. Au gust 14, 2014 with complete zeal and passion in Dubai, UAE at Hayat Palace Dera. Perhaps this is th e first bike assembler which celebrated their Independence Day in foreign. Snaps of some exciting moments shall reveal the enthusiasm and vigor each participant acquired.

RP DEALER'S CON VENTION :

Dubai

During the celebration in Dubai, Road Prince Motorcyles team also distributed Performance Shields to all dealers for instilling their relenting efforts towards sales, promotion, and expansion of Road Prince Motorcycle across the country.

RP HYBRID MOTORBIKE: Road Prince Motorbike humbly boasts to be the first company in Pakistan which introduced Hybrid Motorbike with excellent Energy and Fuel efficient features. This GREEN Hybrid Motorbike will offer huge fuel savings by running 40-50 Km on fully charged battery.

Having said that, Battery can be charged

mechanically and electrically via outlet socket. Team Road Prince is highly hopeful for this new product that will change Motorbike Industry dynamics yet once again after successful launches of Bullet 70cc - Boht Tezz, Jackpot 100cc - Aub lagay ga Jackpot! and RP125cc, One Ride can change Everything!.

This Energy saving HYBRID motorbike will serve a wide array of common two wheeler audience which will mainly include students, jobbers, shopkeepers and urban rural masses who keep a keen eye on maximizing energy and fuel efficiency.

FUTURE IS HERE - FUTURE IS NOW

www.automark.pk | September-2014 | Page 20

Monthly AutoMark International

www.automark.pk | September-2014 | Page 21

Karachi Motorcycle Dealers Association held Independence Day Celebration ceremony at Akbar Road in Karachi

10 motorcycles and 5 mobile phones were awarded to dealers through lucky draw On 14th August, the KMDA held a huge a n d c o l ou r fu l c el e b r a t i on o f Independence Day on Akbar Road Karachi, with the join collaboration of all Motorcycle manufacturing owners, market dealers and shop owners.

Everyone including the association members, dealers, shop owners, mechanics and the representatives of the Super Star, Unique, Super Power, Union Star and United Motorcycles attended the ceremony.

10 motorcycles were awarded to dealers

by the owners of motorcycle companies by a lucky draw.

5 mobile phones were also awarded through a lucky draw by Association's Executive member and owner of New Star Auto Mr. Kamran Khoso. Senior VP announced a free installation of security system on the winners’ of motorcycles. Gift hampers were distributed by Super Star Motorcycles.

The ceremony begun by the recitation of Holy Quran and fun indu ced commentary by Amir Hogla, which included quiz shows with the kids and funny jokes on the stage. Many more awards were given to dealers and shop

owners.

When the president of the association Mr. M. Ahsan came on stage, everyone gave him a warm welcome and a bouquet of flowers.

The president of the association told that our cabinet came to administrator on 16th June 2014, and from day one our agenda is to take all possible steps for the progression of our Market.

The colourful and eventful ceremony ended on a good note.....

By Ashfaq Memon, Sr. Marketing Manager Memon Motors (Pvt) Ltd. (Super Star Motorcycles) Hyderabad..

www.automark.pk | September-2014 | Page 22

Automotive Sector - Review

Booming motorcycle sale may lead to traffic chaos in city

The city seems to be heading towards a traffic chaos with over half a million motorcycles having been brought on roads over the past five years, it emerged on Sunday.

With an increase in local production and subsequent drop in prices, two-wheelers have become a preferred mode of transport for people who have suffered the most amid the fast deteriorating public transport system.

However, city planners and urban experts say that the increased use of motorcycles reflects not only that the people prefer their own transport to public transport, but also that city roads are being congested with vehicles without any major infrastructure development carried out over the past five years.

“Since 2009, the excise and taxation department of Sindh has registered 1.342 million new motorbikes,” said a source citing recently-compiled data.

“More than half of them are meant for Karachi, as the rest were registered in other districts of the province. You can safely estimate there are definitely over

half a million motorbikes which have become part of Karachi traffic during the past five years.”

The figure is also confirmed by motorcycle assemblers who see Karachi as the largest market of locallymanufactur ed motorbikes in the province, with Sindh emerging as the second major province after Punjab, where some two million motorcycles hit roads every year.

“For some 12 years we only had Japanese brands available in local markets. They were sold at Rs70,000 a bike,” said Sabir Sh eikh of the Association of Pakistan Motorcycle Assemblers, adding that the assembling of Chinese motorbikes, however, had changed the entire business in the country.

“Now you can get a 70cc motorbike for Rs40,000 and the price range varies for motorcycles with 125cc engine and above.”

It may seem a positive sign for industrial activity and a large number of people to own vehicles, but it does not inspire tho s e mo n ito r in g th e city ’ s

infrastructure closely.

Amber Alibhai of the Shehri-CBE says that one must look into the reasons for the increase in motorbike numbers in Karachi. “In the kind of traffic that we have, motorbike should have been the least preferred choice of the common man due to fatal accidents it involves,” she says. “Still people are buying it.

So one should look into its reason and the reason is that the poor man has been left with no other choice. Here the number of buses is on the decline while motorbike sale is going up consistently.”

Besides, she says, the metropolis only got flyovers in the name of infrastructure development that has only helped in doing away with traffic signals, but they have not offered any extra space for vehicles being added to city traffic.

“Resultantly, traffic jam has become a matter of routine on every single road.

The roads which until a few years ago were considered smooth for traffic, now no more provide easy travelling facility,” she adds.

www.automark.pk | September-2014 | Page 24

Automotive Sector - Research Report

Monthly AutoMark International

Faster, Better, Cheaper Motorbike In Pakistan, the potential market for two-wheelers is said to be in the range of 30-35 million units against 5,470,000 units on road, whereas over 20 million units are to be purchased in the future Have a quick look at the flow of traffic and two interesting things strike one’s eyes instantly: firstly, the overwhelming number of motorbikes and secondly, their directional flow towards the middle and low income settlements, which almost fades away when they arrive on the well-paved roads of Karachi’s posh localities. According to conventional wisdom, this holds true for other cities of the country as well.

Before moving on to further discussion, it would be beneficial if important statistics quoted by relevant authorities are restated here. According to the 2011 report of the Japan International Cooper ation Ag ency (JICA), the ownership rate of two-wheelers in Pakistan was 22 per 1,000 population in 2007. Despite being higher than the four-wheeled cars’ rate, it was still mu ch lower than India (44) and China (66). The report further added th at as a result of r apid expansion, unit sales reached around 1,190,000 units in 2009-10 across the country.

The reasons for its popularity include: decline in sales price due to increased competition and the economic recession that h as forced a large number of middle-income people to give up the purchase of fou r-wheeled ca rs and c h oose tw o-w h eel ers instead.

In Pakistan, the potential market for two-wheelers is said to be in the range of 30-35 million units against 5,470,000 units on road, whereas over 20 million units are to be purchased in the future.

Furthermore, it’s likely that the twowheeler market will continue to grow faster than the four-wheeled car market for a while now.

According to the Karachi Master Plan, 2020, the total number of registered vehicles in Karachi is 1.5 million with a six percent annual growth rate, which means that every eighth person has a mode of conveyance in the city. It also says that Karachi accounts for 45 percent of Pakistan’s vehicles and has a road

network of 9,444 km. In addition, almost 50 percent of road accidents involve either a pedestrian or motorcyclist.

Moreover, 54 percent of Karachi’s land is utilised for transportation.

In another report titled, ‘Urban transport and sustainable transport strategies: a case study of Karachi, Pakistan’, in 2002 the total registered vehicles and cars grew at twice the growth rate of the population. Moreover, the vehicle fleet was dominated by cars and motorcycles, which accounted for 92 percent of the vehicles against six percent for paratransit vehicles and two percent for public transport vehicles.

This resulted in enormous congestion, especially in the central part of the city, which increased the average travel time in Karachi by over 45 minutes.

The repor t also stated that the majority of Karachi’s urban public transport (81 percent) is made up of low-capacity minibuses and coaches that can carry about 27 to 32 passengers only.

In a recently concluded research by noted sociologist, architect and urban planner, Arif Hasan, on the use of motorbikes in Karachi, the reasons for the popularity of the two-wheeler are crystal-clear. The researcher interviewed around 200 people, including young commuters, motorcycle users and motorbike dealers. According to them, a motorcycle is an economical option as compared to other modes of conveyance.

The average cost of maintenance and fuel is Rs 784 against Rs 1,570 per month spent on travelling by a bus. It also reduces the travel time by up to 50 perc ent as comp ared t o bu ses.

Moreover, motorbikes provide the maneuverability of using it for social and other trips. A considerable number of respondents (70 percent male and 53 percent female) wants to purchase and ride motorcycles, but they do not have

the means to afford one. Interestingly, the interviewed girls expressed their reservations in owing a motorbike due to prevailing social taboos. They also believe that such type of conveyance will pr ovid e t h em indep end ence of movement, which is essential as per the emerging new roles of women in public spheres.

Various conversations with experts, web surfing and literature review for the aforementioned study culminated into a few recommendations as w ell.

Provided that the use of motorcycles is to increase in the foreseeable future, it is recommended that an integrated transport policy be formulated to facilitate the use of motorcycles by the people. Measures such as separate lanes, reduction in duties and micro-credit programmes for the easy purchase of motorcycles have been recommended by relevant authorities. Keeping in view th e noise pollution generated by motorbikes, motorcycle manufacturers should take an initiative of introducing battery-operated hybrid (which runs both on electricity and fuel) green motorbikes. The design also needs to be altered to make the green bikes women-friendly so that they do not have to sit in a saddle-like position, which is per ceived as cultu rally inappropriate.

In fact, some giant motorcycle manufacturers have expressed their interest in exploring the possibility fu rth er, wh ich show s tha t th ey also realise the importance of the ventu re from the p erspective of profitability.

Perhaps, the most important aspect of this entire study is the interest shown by women to ride motorcycles. Women police officers in Lahore are already doing that and have faced no opposition as yet. If in the future, female police officers in Karachi opt for the same option then a cultural revolution will ta ke p l ac e, w i th fa r -r ea c h i ng implications on the social and political landscape of the city....

www.automark.pk | September-2014 | Page 25

Karachi Transportation - Update

36 CNG buses finally made functional after three years A total of 36 CNG buses that have been rusting away for around three and a half years now, will finally ply on the roads of the city after the project was inaugurated by Sindh Chief Minister Syed Qaim Ali Shah on Sep 5, 2014.

The 36 buses were part of a fleet of 72 CNG buses launch ed by the city government during the tenure of Nazim Mustafa Kamal but the buses soon wore out for want of necessary maintenance and were consigned to the Surjani and Korangi terminals after plying for just a year or so.

The Sindh government spent Rs40 million to bring the buses back to roads in collaboration with the KMC which were to ply by the end of June but the project was delayed due some to technical problems.

The service, named the ‘People’s Bus Service’, will run from Quaidabad to Tower and a one-way ticket will cost Rs20.

The provincial transport secretary, Taha Faruqui, pledged that 36 more buses will be added to the service next month and said buses would ply from district West to Tower. He said that th e provincial government had allocated around Rs3 billion for a ‘green line project’, but since this project has been taken over by the federal government, its budget would be diverted to the ‘red line’ that is part of the Bus Rapid Transport (BRT) scheme.

“We w ant to imp rove th e living standards of the people of Karachi and are introducing these 72 buses for their convenience,” said Shah, adding that he hoped the transport issue will be resolved in Sindh, particularly in Karachi where Qingqi rickshaws have clogged up the already congested roads. “We w ant t o end th e mo nopol y of transporters,” he said, while addressing the gathering held at the CM House to mark the inauguration.

The chief minister claimed that the government has made an arrangement under which CNG will be provided to the buses seven days a week without any interruption.

The chief minister said earlier at the launching ceremony at CM House that the Chinese had also shown interest in

After the directions of CM Sindh KMC bring 36 reconditioned buses on road to solve public transport problem in Karachi, seen partked at Shahrah-e-Faisal on September 05, 2014 Yellow line transport service and Karachi Circular Railway project which was to receive Japanese investment but in the last CCI meeting Prime Minister Nawaz Sharif informed the Sindh government that Japanese loan which was for 40 years on 0.4 per cent interest rate was no more available as the government had failed to take advantage of their offer.

Promises made Earlier, KMC administrator Rauf Akhtar

Farooqui briefed the audience about the role of the provincial government in transport and other development schemes and claimed that the KMC, with the help of the Sindh government, will build various flyovers and roads in the city.

Information and local government minister Sharjeel Inam Memon said that the provincial government will start a drive against the encroachments on nullahs....

After the directions of CM Sindh KMC bring 36 reconditioned buses on road to solve public transport problem in Karachi, seen partked at Shahrah-e-Faisal on September 05, 2014

www.automark.pk | September-2014 | Page 26

Indian Automotive Industry - News Update

Honda CD 110 Dream and TVS Star City Plus A Comparative Study The growing craze about motorcycles in India has paved the path for a stiff competition among the similar models of manufacturers. If a particular bike model of a brand is quite successful and is able to hike the sales reports of its manufacturer, other makers make sure that bikes of the similar segment are launched to tap down the demands of the masses. Indeed, this is one of the reasons wh y India is sometimes regarded as the leading producer of motorcycles. As a result, there is always a stiff competition among various brands of similar performing bikes.

Honda and TVS, two extremely popular names in the industry are no different and both the brands have different models in the same segments to compete against each other. TVS Star City Plus and Hond a CD 110 Dr eam are two such bikes in the 110 cc segment that take on each other, in respect of price, specifications and performance.

The TVS Star City Plus has a 109 cc engine that can produce a power of 8.3 bhp at approximately 7000 rpm. The bike generates a peak torque of 8.7 Nm at a commendable rpm of 5000. The transmission is with the help of a manual gearbox, which has 4 gears and the

clutch pattern is wet, multi-plate. This bike has a maximum speed of 90 kmph, which is quite good for this range.

Having a kerb weight of 105 kg, the wheelbase is 1260 mm with a ground clearance of 172 mm. When it comes to mileage, the bike has a stupendous performance of 86 kmpl with a tank capacity of 10 litres. The bike has a telescopic oil damped front suspension and 5-step hydraulic shockers for the rear.

The other hand, the Honda CD 110 Dream is powered by an engine of 110 cc, which churns out a maximum of 8.25 bhp at 75 00 rpm. The torque is maximum at 8.63 Nm at an rpm of 55 00. Par tnered with a manual gearbox pattern, the bike is ideal for the busy city roads. However, the top speed of this bike is a tad lower at 74 kmph with a wheelbase of 1258 mm.

The ground clearance is slightly more at 179 mm, which makes it ideal for bumpy rides. The mileage is of the same range at 83 kmpl, which makes it quite a competitor of the former. Both the bikes have been launched for people who mainly drive in and around the city and the looking for fuel-efficient, high performing bikes.

Monthly AutoMark International

Honda wants to become a Hero in India When Keita Muramatsu arrived in India as CEO of Honda Motorcycles & Scooters India (HMSI) in 2011, the fullyowned subsidiary of Honda Motor Company churned out 1.6 million bikes annually.

Today, with a capacity of 3.6 million and a planned production of 4.5 million by 2015-16, growth has been astounding.

"We climbed Mount Abu, then Mount Fuji, then Mont Blanc, and now we wa nt t o su mmit Ev er est ," sa ys Muramatsu.

Having grown by 36.5 per cent last year, HMSI is gearing up to take on former Honda ally and numero uno player Hero, which grew by only 3 per cent, and dislodge it from the top slot in the rarefied heights of the Indian twowheeler industry.

Of course, Hero may be on the growth path too but it is Honda's astounding rate of grow th and the r esolve in Mur am atsu' s voice that calls for attention. Nu mbers don' t lie either.

India's two-wheeler market stands at 14,805,481 units having grown by 7 per cent from 13,797,748 units in FY201213. Of the 10,07,733 additional twowheeler that rumbled and revved Indian roads last year, Honda has grabbed a large share.

India to be Yamaha’s 2nd largest market Yamaha Motor India will have cause for cheer with its India numbers overtaking Thailand in the second quarter (AprilJune) of this year while rapidly closing in on Vietnam. Indonesia, however, continues to be the company’s largest market with sales of 715,000 units in the period. The results were declared a fortnight ago in Japan.

India and Vietnam are tied at 140,000 units in Q2 of this year with Thailand slumping to 53,000 units. In the same period last year, Vietnam had posted sales of 167,000 two-wheelers while Thailand and India followed with 106,000 units apiece. Indonesia continued to be comfortably ahead with 655,000 units in April-June 2013.

Taking this one step further, half yearly results of this year show India’s sales up to 260,000 units (from 203,000 units in H1 of 2013) with Vietnam marginally

ahead at 291,000 units, a dramatic slump from last year’s level of 403,000 units.

Thailand is in free fall with JanuaryJune numbers down to 98,000 units from 211,000 units in the same period last year.

Quite predictably, Indonesia is the undisputed leader with sales of 1.3 million (1.27 million in 2013) units in H1 of this calendar.

Increasing demand Clearly, demand in Vietnam and Thailand is on the wane for Yamaha’s two-wheelers while it is only a matter of time before India emerges its second largest market after Indonesia. The process is already underway with the company set to commission a new plant in Chennai towards the end of this year.

Its capacity will be increased in phases to 1.8 million units by 2018 and, along

with its other facility in Surajpur, Yamaha will have nearly three million bikes and scooters rolling out from its India plants.

The Japanese automaker has also set in motion Project Indra (Innovation and New Development based on Responsible Analysis) which will eventually lead to prod uction of th e w or ld’s most affordable motorcycle in the Rs 30,000 price range. This will be facilitated by teams from India and Japan which are pulling out all stops to train ancillary suppliers in becoming an active part of Yamaha’s global sourcing programme.

Over the next two years, the value of spares shipped out from India is expected to jump six fold from Rs 60 crore today to Rs 360 crore. The top priority is to ensure that Indian suppliers focus on consistency in quality while keeping costs in check.

www.automark.pk | August 2014 | Page 31

News in brief MoU signed between Pakistan, Philippines Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Zakaria Usman signed a MoU with Philippine Chamber of Commerce and Industry for the formation of a joint Pakistan and Philippine Business Council.

The signing ceremony took place in a meeting held with Philippine Chamber of Commerce and Industry (CCI) in Manila.

“The formation of Pakistan-Philippine J oi nt Bu si ness Co un ci l is th e accomplishment of a long desire of the bu siness community of both countries.

In the meeting with the Philippine CCI and Manila CCI, Usman highlighted the investment potential and incentives in Pakistan for foreign companies and emphasised people-to-people contacts in order to boost bilateral trade.

“Pakistan gives great importance to its relationsh ip with Philippines, an important country of the Association of South East Asian Nations (ASEAN),” he said.

“Bilateral trade potential between Philippines and Pakistan is huge. The current level of trade needs to be further raised for better economic cooperation between the two countries.”

Honda working on small car engine to challenge Maruti and Hyundai In a bid to challenge the small car sgement in the country Japanese automobile manufacturer, Honda is working on a new 1 liter petrol engine, which is being developed in Japan and slated to make its way in a new small car, which is scheduled for a launch in 2017, reports suggests.

Honda’s prime objective in developing this 1 liter petrol engine is to have a go at small car giants Maruti and Hyundai.

Honda has doubled its market share to about 7% in just two years following successful launch of diesel variants of Amaze and City. Now, the Japanese company gears up to challenge top two car makers in India, Maruti Suzuki and Hyundai where small compact cars are concerned.

Monthly AutoMark International

Govt fails to hold several meetings A number of meetings between the b u s in es s c om m u ni t y a n d th e government have been postponed due to prolonged protests by Pakistan Tehreek-i-Insaf and Pakistan Awami Teh reek in th e federa l c apit al.

An official in a multinational drug company said the government used to hold three monthly meetings of the pricing and licencing committees and the registration board, and such meetings could not be held due to the prevailing conditions.

Director-General Pakis¬tan Automotive Manufactu¬rers Association (PAMA), Abdul Waheed Khan said that the 20th meeting of Auto Industry Development Com mit tee (AI DC), w h ic h w a s scheduled to be held on Aug 18 at the offices of Engineering Development

Board in Islamabad was postponed. It was rescheduled for Aug 21, but has again been delayed.

The agenda of the AIDC meeting related to the request received by EDB from Pak-Suzuki Motor Company Limited for allowing import of 6 HS Code, being CKD parts, by removing them from the negative list of items importable from India. The other issues to be discussed included registration of auto vendors with the EDB. No federal minister or the chairman of Board of Investment attended the Expo 2014 held on August 12-14 in Karachi despite their verbal confirmation. Only Secretary of Federal Housing Ministry Younu s Daga visited t he Ex po.

New MAN efficiency technologies for trucks and buses at the IAA As the second largest exhibitor at the IAA, MAN Truck and Bus presents new vehicle and engine technologies, with the top-of-the-range TGX D38 truck with up to 640 HP as its centrepiece.

We are delighted to invite you to our press conference on 24 September 2014 at 8:30 AM to be held at our exhibition stand B 14 in Hall 12. There we shall present all of the innovations and highlights from across our product range. Th roughout the press day, ou r exp erts and pr ess contacts will be on hand to answer your questions.

With its new 15.2 litre six-cylinder engine which boasts 520, 560, or 640 HP, the flagship TGX D38, is proudly displayed as a world first at the IAA 2014. A leading light on the innovation stage is th e 640 HP heavy-duty prime mover. The 19 trucks on the stand and in the outdoor areas represent the product and sector variety achieved by the TGL, TGM, TGS and TGX series.

Consumption efficiency – this central theme goes hand in hand with our goal of reducing CO2 emissions. The new

TGX EfficientLine has all of the efficiency technologies on board, most notably the EfficientCr uise GPS Tempomat and the TopTorque torque enhancer for fuel economy. In the TGX EfficientLine, designed with consistent fuel economy in mind, MAN has the most successful model on the market.

Since its market launch in 2010, more than 27,000 customers have chosen the EfficientLine models and packages.

MAN has reworked the complete D26 engine portfolio for trucks of 400 to 480 HP and provides the TopTorque function throughout that gives an extra 200 Nm torque in the two highest gears.

This puts the new engines on a parallel with long-design drive trains, thus achieving sustainable fuel economy.

MAN is also giving viewers a glimpse into the future of natural-gas trucks with a MAN TGM with a 280 HP CNG engine.

MAN Solut ions foc uses on t he interweaving of services that provide the cu stomer w ith valu able opportunities to reduce costs, and MAN will present a whole host of innovations in this field at the IAA.

www.automark.pk | September-2014 | Page 32

Monthly AutoMark International

Automotive Sector - Review

Can vehicle management be reformed in Sindh?

The next urgently needed reform in the Sindh vehicle management system is to enable all citizens to pay their yearly motor vehicle tax without going to any office or bank

While the Sindh Excise and Taxation (E&T) Department might still be struggling to figure out an efficient mode of yearly road tax collection, it must not be denied credit for having taken an important step forward to improve its veh icle verification process. The department now has on its website an online vehicle verification facility that a llow s ci tiz ens to ch ec k b asi c information and facts about any private or commercial vehicle.

Regrettably, the Sindh Police, which is responsible for fighting crime in the province and which is often the victim of vehicular lawlessness, does not have the capability to readily access the credentials of thousands of suspected vehicles that move around with complete impunity. The police must perform the near impossible task of assembling at one place, personnel and laptops from, at least, four different departments to figure out the complete details and background of a vehicle. This also explains why the police is often helpless and ineffective in the face of organised crime. One wonders why the Sindh Police has taken pains to keep itself aw ay fr om th e tec hniq ues and technologies that are a norm not just in Western countries but are also available to its counterparts in Islamabad and Punjab.

With only minor changes in its vehicle verification system, the Sindh E&T Department could provide immensely useful and powerful data services to the police and public at the same time. It could begin by providing the vehicle verification facility on mobile phones, where users could retrieve a vehicle’s

data by simply sending the vehicle registration number on a four-digit short code SMS. Within a few seconds, the user could receive an automated SMS response that includes the information currently displayed on the E&T website plus the owner’s name, the last four digits of the owner’s CNIC and the vehicle chassis number. The information must clearly state if the vehicle was stolen or involved in a crime. The return SMS must also indicate the total outstanding amount of tax to be given, including the penalty for late payment.

Provision can be made for the police to receive additional information such as the owner’s complete CNIC number or the inspection status for commercial vehicles.

The next urgently needed reform in the Sindh vehicle management system is to enable all citizens to pay their yearly motor vehicle tax without going to any office or bank. This can be done in two steps. First by sending an SMS to obtain the vehicle details as described above. The SMS response will indicate the exact amount of tax due (including penalty if any).

Individuals can then pay the tax, sitting in their homes, by using any of the SMSbased mobile money transfer schemes such as ‘Easy Paisa’, ‘Mobicash’, ‘UBL Omni’ or ‘Upaisa’. The E&T Department could specify a phone number for tax payment, which also sends a return SMS to confirm the receipt of payment.

Vehicles with fake foreign, nonstandard, duplicate, ‘Applied for Registration’ or personalised number plates are being increasingly used in crimes, kidnappings and bomb attacks.

T he S ind h polic e and t he E&T Department fail to recognise this link and refuse to apply techniques that could control or get rid of all unlawful vehicles.

A major hurdle in this process is the Sindh government that is guilty of not having registered thousands of vehicles that are in its own use. The motor vehicle tax of those that are registered is not paid. These unlawful practices offer a huge opportunity to criminals who can u nab ash edly use fake, fanc y or ‘lookalike’ government number plates to gain access to secure places or indulge in criminal activities. The police is often too scared to check vehicles that appear to be official, foreign registered or d is play p laque s lik e ‘MNA’ , ‘Commissioner’ etc.

Not celebrated for its efficient governance, the government of Sindh c ou ld tu r n a rou nd i ts v eh ic le management system (and image) by taking four simple steps. Begin by registering all delinquent government and police vehicles and display their registration details on the E&T website like all other vehicles. Next, enable police and citizens to access vehicle and tax related data directly through a short code SMS service. Thirdly, the E&T Department should introduce the facility for payment of motor vehicle tax through mobile phone money transfer schemes such as the ones described above. Finally, the Sindh police must be nudged to institutionalise and undertake the much neglected vehicle enforcement programme as an ongoing exercise.

Courtesy: The Express Tribune

www.automark.pk | September-2014 | Page 33

Automotive Sector - Report

Monthly AutoMark International

A Brief Look at the Automotive Industry of Pakistan The automotive industry of Pakistan is considered as one of the thriving industrial sectors of the country. It has full potential to contribute high amount of income and GDP to the reserves of the Government. Auto industry is the second biggest tax payer in the country. According to recent statistics, it has contributed 63 billion rupees as indirect tax in the national exchequer.

At present, auto sector is contributing 16% to the manufacturing sector which is envisaged to increase 25% in the next 7 years. Besides that, automotive industry of Pakistan is providing employment opportunities to thousands of people all across the country. And if we look at the statistical figures, w e will come to know that ou r Auto sector employs 192,000 people d irec tly and around 1.2 million indirectly.

Although , a major percentage of automobiles are manufactured locally, our auto industry is still dependent on importing various precision auto parts and components. However, with the passage of time, industry is gradually moving towards complete localization.

As now, our motorcycle industry has successfully achieved almost 95% localization and other sectors are also booming in this race. At the present time, some of the leading world automakers have established their assembly plants in the country which are helping in the transfer of latest global technology to our local industry. Besides th at, var iou s international auto companies, including Toyota, General motors; Honda, Suzuki and Nissan Motors are in joint ventures with local companies. These business ventures b r ing fo rei g n i nvest m ent th a t contributes in the development of indigenous auto sector.

Currently, our automotive industry is largely dominated by three major companies which include, Indus Motors,

Honda Atlas Motors and Pak Suzuki. In evaluating the current scenario of our auto sector, there are 3,200 units of automotive industry with the investment of Rs 92 billions.

The automobile sector of the country can be classified into 6 major segments:

1. Cars & light commercial vehicles (LVC’s) 2. Two and three wheelers 3. Tractors 4. Trucks and buses 5. Accessories and part manufacturers 6. Vendor Industry In the context of Pakistan, there are 10 cars in 1,000 persons which is one of the lowest ratios in the rising economies which itself demands high potential of growth in the auto sector especially in the car production. Besides that, the Rising per capita income and changing demographic distributions are also stimulating the auto industry to expand and grow. However, we can not overlook a ll t h os e c h al le ng es t h a t ar e undermining the growth of our local auto industry.

In the current perspective, the worst economic situation of the country is contributing a lar ge part in the discouragement of auto industry. In addition, the chronic electricity and gas shortages are surely a big challenge for auto sector which are also troubling every other sector in the country. Lack of infrastructure, bad governance and absence of friendly industrial policies are all proving serious setbacks for the development of auto sector.

It can be concluded form the above discussion that auto industry of Pakistan has full capacity to expand its operations and to contribute in the development of the economy of the country. However, for the sustainability and growth of this sector, Government should devise prudent and friendly policies that can attract foreign investors. Besides that, government should facilitate the local

In the current perspective, the worst economic situation of the country is contributing a large part in the discouragement of auto industry. In addition, the chronic electricity and gas shortages are surely a big challenge for auto sector

industry to maximum level so it can achieve absolute localization. No doubt, it is a need of time to be self independent in our automotive sector, so we can proudly compete in international markets.

www.automark.pk | September-2014 | Page 34

International Automotive Industry - Update

Tata Motors, Maruti Suzuki Fall on Competition Commission Penalty Shares in car makers fell on last monthy as the Competition Commission of India imposed a penalty of Rs. 2,545 crore on 14 carmakers for violating trade norms in the spare parts markets.

The fine has been calculated as 2 per cent of car makers' average turnover and the penalty is to be deposited within 60 days.

Tata Motors has been fined Rs. 1,346 crore whereas Maruti Suzuki will pay a fine to the tune of Rs. 471 crore.

Mahindra & Mahindra has been fined Rs. 292 crore.

As per the regulator car companies were having a monopolistic control over spare parts and digonistic tools of their respective brands and charged arbitrary and high prices for their spare parts.

The regulator also said th at car companies have been using their dominant position in the market for spare parts and diagnostic tools to protect their market for repair services which distorted fair competition.

Tata Motors shares closed 0.84 per cent higher at Rs. 512.65 whereas Maruti Suzuki ended 1.19 per cent lower at Rs. 2,772.40 and Mahindra & Mahindra closed down 0.79 per at Rs. 1,399.60.

YAMAHA WANTS TO DO A NANO IN THE MOTORCYCLE MART

Yamaha Motor Ltd is planning to launch an affordable motorcycle in India. The company intends to price the bike around Rs30,000. Yamaha has launched Project Indra to produce the affordable bike for India and Africa. The company has set up an India Procurement Centre to source parts for its global operations.

Yamaha intends to increase the number of vendors from 37 to 60 and the components from 130 to 300 by the end of 2016. The company intends to focus on styling, safety and performance.

Maruti Suzuki to challenge CCI penalty, says order lacks understanding Country's largest carmaker Maruti Suzuki India said it would challenge the penalty imposed on it by CCI for violation of trade norm s in the sp ar e p ar ts a nd aft er servi ces market.

"I believe what CCI has done (is) that they have not understood the entire issue of spare parts of cars. What they are saying may apply to other industries (but not in auto)...There is a lack of understanding of the difference. (The auto) industry by its nature is totally different," Maruti Suzuki India (MSI) Chairman RC Bhargava told in an interview.

Stating that the functioning of the a u tom ob il e in du st r y, s pe ci all y with regards to the spares are different from other industrial sectors, Bhargava said said CCI hasn't taken a holistic view.

"What the CCI has dealt with is that it will result in lowering the prices of the spare parts. They have totally forgotten that most parts of the car are critical for safet y or for p oll ut ion or environment or for performance," Bhargava said.

He further said: "Now cost does not cover the quality of the parts you put into the car, they have totally not dealt with the quality part of the car."

Already Mahindra & Mahindra and Tata Motors have said they would c hal leng e th e CCI ord er a t an appropriate forum.

As per the Competition Act 2002, orders passed by the Competition Commission of India (CCI) can be challenged before the COMPAT (Competition Appellate Tribunal) within 60 days.

The other companies fined by CCI are V ol ks w ag en In d ia , F i at I nd i a Automobiles, BMW India, Ford India, General Motors India, Hindustan Motors, Mercedes-Benz India, Nissan Motor India, Skoda Auto India and Toyota Kirloskar Motor.

The regulator had also ordered the automobile companies to undertake certain compliances within 180 days from the receipt of the order and has directed them to submit a report within 60 days of receipt of the order on the action initiated for compliance with the order.....

China: Japanese auto-parts suppliers hit by record fine After scrutiny from Chinese regulators impacted several carmakers, with two of them – Audi and Mercedes – facing fines of their own, the authorities have found a dozen Japanese parts makers guilty of breaching antitrust laws.

According to the website of the National Development and Reform Commission, China’s main economic planner, the tally for the fines imposed to the guilty companies total 1.24 billion yuan ($200 million). Among them, the worst hit is Su mitomo Electric Industries, facing a penalty of 290.4 million yuan – a new record for the largest antimonopoly fine imposed on a single company.

“This sends a warning to companies engaging in global price-fixing that they should beware of China,” said Chen

Danzhou, a lecturer at the University o f Int er nat iona l B u sines s an d Economics in Beijing. “The government is getting more aggressive as it tries to make a structural adjustment to the market.”

The second largest fine went to Yazaki Corp. and besides the two, the regulator also penalized Denso Corp., Aisan Industry, NSK Ltd., Hitachi Automotive Systems Ltd., Mitsubishi Electric Corp., Mitsuba Corp., Furukawa Electric Co., Nachi-Fujikoshi Corp., Jtekt Corp. and NTN Corp. All the auto-parts makers were found guilty of price-fixing, in a series of investigations that also led to global carmakers such as Audi, BMW, Mercedes-Benz, Jaguar Land Rover, Toyota or Honda to lower their prices for spare parts, services or even vehicles.

www.automark.pk | September-2014 | Page 44

Car / Light Vehicle Price List www.automark.pk SUZUKI Model Model

WAGON-R VX 1000cc Euro II WAGON-R VXR 1000cc Euro II WAGON-R VXL 1000cc Euro II MEHRAN VX 800cc Euro II MEHRAN VXR 800cc Euro II SUZUKI SWIFT 1.3L DX SUZUKI SWIFT 1.3L DLX SUZUKI SWIFT 1.3L Automatic CULTUS EFI VXR Euro II LIANA 1.3L RXI MT PETROL LIANA 1.3L RXI MT (CNG) BOLAN VAN VX 800cc E2 BOLAN VAN VX 800ccm (M)E2 SUZUKI VAN CARGO Euro II RAVI PICK-UP STD 800cc E2 RAVI PICK-UP STD 800cc (M) E2

APV 1.5L GLX MT (Petrol)

HONDA Price Price Rs. 919,000 Rs. 1074,000 Rs. 1114,000 Rs. 635,000 Rs. 688,000 Rs. 1,321,000 Rs. 1,382,000 Rs. 1,518,000 Rs. 1,059,000 Rs. 1,465,000 Rs. 1,544,000 Rs. 695,000 Rs. 700,000 Rs. 666,000 Rs. 637,000 Rs. 642,000 Rs. 2,418,000

Model Honda Aspire Manual Honda Aspire Prosmatec Honda City Manual 1300cc Honda City Prosmatec 1300cc HYUNDAI Honda Civic VTI Manual 1800cc Honda Civic VTI Manual SR (Oriel) Honda Civic VTI Prosmatec 1800cc Honda Civic VTI Prosmatec SR (Oriel) Honda CR-Z Sports Hybird Manual Honda CR-Z Sports Hybird Automatic

TOYOTA COROLLA Model XLI VVT-i 1.3 M/T 1299cc Petrol GLI VVT-i 1.3 M/T 1299cc Petrol GLI VVT-i 1.3 A/T 1299cc Petrol GLI VVT-i 1299cc LE ALTIS 1.6L Dual VVT-i M/T ALTIS 1.8L Dual VVT-i MT GRANDE 1.8L S.R. M/T GRANDE 1.8L S.R. A/T CVT-i FORTUNER 2.7L A/T FORTUNER 2.7L A/T TRD Sportivo

PM Auto Industries (Pvt) Ltd. Model Faw Truck Super 3 Ton (3200cc) Faw Truck Prime 2 Ton (2600cc)

Price Rs. 1,260,000 Rs. 1,034,000

Sokon - Mini Truck (1050cc) DFSK - Mini Truck 2700MM Deck DFSK - Mini Truck 2500MM Deck DFSK - Mini Truck (Double Cabin-AC) 1400MM Deck Introductory Price DFSK - Mini Truck (Double Cabin Non-AC) 1400MM Deck Introductory Price

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

Price 1,627,500 1,752,500 1,827,500 1,712,500 1,952,500 2,027,500 2,152,500 2,302,500 4,755,500 5,005,500

Rs. 763,000 Rs. 731,000 Rs. 950,000 Rs. 900,000

Sokon - MPV 11 Seater (1300cc) DFSK - MPV 11 Seater (Without AC) Rs. 1,034,000 Rs. 1,084,000 11 Seater (Dual AC)

Hilux Pickup 4x2 sc Model

DAIHATSU

Dual AC - Power Steering+ Power Window

Rs. 938,000

Sokon - Cargo Van 1050cc DFSK

Rs. 840,000 Rs. 977,000 Rs. 740,000 Rs. 685,000

Tractor Euro Ford 85 HP Tractor Euro Ford 60 HP Tractor Euro Ford 50 HP Price List - Ex Factory (Hyderabad)

Rs. 1,859,500

Hilux Pickup 4x4 E

Rs. 1,145,000

Sokon - MPV 07 Seater (1050cc) DFSK Without AC Rs. 817,000 Rs. 887,000 With Dual AC Dual AC - Power Steering Rs. 928,000

Price

Brand New Toyota Hilux Pickup, 4x2, 2500cc Single Cabin, White only, Hilux STD

11 Seater (Dual AC-Power Steering) Rs. 1,134,000 11 Seater (Dual AC - Power Price Model Steering +Power Window)

Price Rs. 1,772,000 Rs. 1,914,000 Rs. 1,612,000 Rs. 1,763,000 Rs. 2,185,000 Rs. 2,417,000 Rs. 2,306,000 Rs. 2,538,000 Rs. 3,286,000 Rs. 3,366,000

Model

Price

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

TOYOTA VIGO DAIHATSU Model Model

Price Price

Rs. 3,109,500

AL-HAJ FAW MOTORS Model

Vigo Champ M/T Rs. 3,423,500 FAW Carrier 1000cc (WHITE ,BLACK,STRONG BLUE & SILVER) FAW X-PV 1000cc Std FAW X-PV 1000cc A/c Vigo Champ A/T Rs. 3,623,500 Sirius S80 1300cc (WHITE ,BLACK,STRONG BLUE & SILVER) Sirius Grand 1500cc

Monthly AutoMark Magazine - International

Price Rs. Rs. Rs. Rs. Rs.

724,000 824,000 875,000 1705,000 1885,000

Price updated September- 2014

MADE IN PAKISTAN MOTORCYCLES RETAIL PRICE LIST

70cc Motorcycle Sr./ No. 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Product & Model Name Hero RF-70 Hero RF-70 Plus Honda CD-70 Honda CD Dream Hi-Speed SR-70 Ravi Premium R1 Road Prince bullet Road Prince 70cc United US 70 United Extreme 70

Retail Price Rs. 46,000/= Rs. 47,000/= Rs. 69,900/= Rs. 73,500/= Rs. 43,000/= Rs. 46,950/= Rs. 45,000/= Rs. 39,000/= Rs. 42,000/= Rs. 44,500/=

125cc Motorcycle No. 1.

2.

3.

4.

5.

6.

7.

Brand & Model Name Super Star SS-125 Super Star SS-125 DLX Honda CG-125 std Euro II Honda CG-125 DX Honda Dream Ravi Piaggio Storm 125 United US-125 Euro 2

Retail Price Rs. 59,000/= Rs. 67,000/= Rs. 102,500/= Rs. 124,000/= Rs. 105,900/= Rs. 112,000/= Rs. 69,500/=

Suzuki Motorcycle (Heavy Bikes) Sr./ No. 1.

2.

3.

4.

Product & Model Name Inazuma GW 250 Intruder M800 Hayasuba GSX1300R Bandit GSF650SA

Retail Price Rs. 725,000/= Rs. 1,600,000/= Rs. 2,500,000/= Rs. 1,500,000/=

Sr./ No. 9.

10.

11.

12.

13.

14.

15.

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

Retail Price Rs. 45,450/= Rs. 40,000/= Rs. 44,000/= Rs. 44,700/= Rs. 48,200/= Rs. 44,000/= Rs. 44,500/=

100cc Motorcycle No. 1.

2.

3.

4.

5.

6.

Brand &Model Name Honda Pridor Super Star SS-100 Super Power SP-100 Road Price Jackpot 110cc United US-100 Euro 2 United Regular

Retail Price Rs. 86,000/= Rs. 57,000/= Rs. 60,000/= Rs. 44,000/= Rs. 49,500/= Rs. 48,500/=

Suzuki Motorcycle Sr./ No. 1.

2.

3.

4.

5.

Product & Model Name SD110 Sprinter ECO SD110 Sprinter ECO Del SD110 Raider GS-150 Euro-II GD 110 Euro-II

Retail Price Rs. 90,400/= Rs. 85,400/= Rs. 98,400/= Rs. 122,500/= Rs. 109,900/=

www.automark.pk www.automark.pk | Sep-2014 | Page 40

Price update: Sep-2014

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September-2014

Monthly AutoMark International

CBI Event - Press Release

PAKISTANI COMPANIES PARTICIPATE IN CBI EXPORT COACHING PROGRAM THE HAGUE, 1 Sept. 2014. CBI, the Dutch Centre for Promotion Of Exports from Developing Countries today launched a five day seminar EXPRO 102 designed for enhancing the exporting skills of Pakistani Engineering Sector Exporters and also the capacity building of P akis tani Bu siness S up p or t Organisations who are stakeholders in the drive to enhance Pakistani Exports.

With the Pakistan government planning an exponential growth in Pakistan’s exports, th e i nitiative fr om t he Netherlands Ministry of Foreign Affairs is well programmed for achieving its goals.

There are five Pakistani Engineering Sector Companies participating in the present Seminar with seven participants while there are two participants from TDAP. A-One Techniques, Haseen Habib, ESP, Al Hadeed and Comcept are the companies attending the current Seminar.

The countries represented at the EXPRO are Pakistan, Vietnam, Phillipines, South Africa and Indonesia, at the NH Hotel,

The Hague, The Netherlands.

The Private Sector SME companies are undergoing a four year CBI Export Coaching Program, during which they are being coached and mentored by CBI Experts to make them stable exporters and lead their companies to export led gr owth . Th e present grou p h as undergone local training in Pakistan through CBI Experts and attending Wor ksh ops on Market Research, Process Control and other on going training programs initiated by the CBI. During the present Seminar, the EXPRO102 participants shall be led through the process of refining their Export Marketing Plan as well as training on Cultural Sensitiveness needed for exp or t sales, Bu yer Behaviour, Trade Practices etc. The group will also spend one day at the TIV, Hardenberg, The Netherlands. This regional Trade Fair for sub contracting and networking will prepare the group participants for their entry to European trade Fairs.

The BSOD EXPRO102 Program is designed to steer Pakistan into new directions of Exports, and prepare them for Skills Training and improving skills levels of their staff, for creating effective Sectoral Export Marketing Plans to achieve export-led of the Pakistan economy.

The five day Seminar is being conducted at the NH Hotel, at The Hague, Holland,

by CBI Experts Julian Lawson, Imtiaz Rastgar, Jan Elferink, Peter Lichthart Allan Gozon, together w ith Cor Dieleman, CBI Country Program Manager for Pakistan. Two officers from the TDAP are also attending this program as part of CBI BSOD Program.

CBI works on behalf of the Dutch Ministry of Foreign Affairs, to promote exports from developing countries to Europe. CBI has Export Coaching Programs running in the Engineering and Food Ingredients Sectors of Pakistan. -PR

www.automark.pk | September-2014 | Page 43

Monthly AutoMark International

Honda CR-Z Hybrid gets factory bolt-on supercharger

Tata Nano, once a symbol of aspiration for two-w heeler ow ners, will be revamped next year and launched as a 'Smart City Car', Girish Wagh, senior vice-president, Tata Motors, said on August 13.

The car suffered from an image problem leading to lower sales. "We are carrying out multiple interventions to improve the product as well as its image to ensure that the Nano lives up to its promise," Wagh said on the sidelines of launch of Zest, a compact sedan from the Tata stable with 29 new product features.

The adulation around the Nano brand disappeared when deliveries were hit owing to delay in the project. Cases of the car catching fire dampened the consumer sentiment around the brand.

"Although fire incidents were either caused by foreign objects in the exhaust system or external manipulation with the car's electrical systems, over the period, we have rectified them," he said, adding that the company has refocused on the safety aspect in its subsequent model Nano Twist.

The company realised that there were significant number of cases where people would test-drive, book their Nano and then, drop out owing to negativity around the brand.

"Social circles would dissuade them," Wagh said adding that the company is hoping to see a change in Nano's fortunes, post rebranding, including possible export to international markets.

Tata Nano is manufactured at the company's Sanand facility on the outskirts of Ahmedabad...

A fac tor y Hon da P er for ma nce Development (HPD) supercharger kit promises to give your Honda CR-Z Hybrid the kick you always wished it had.

The official press release from Honda said HPD has developed a full line of performance parts for the Honda CR-Z Hybrid first shown at the 2013 SEMA show, though the supercharger kit debuted this August. All Honda CR-Z Hybrid performance parts from HPD are now available for purchase from

Honda dealer parts departments, the release said.

HPD President Art St. Cyr said, “The CR-Z was the first hybrid to prove that efficiency doesn’t have to come at the cost of sportiness and fun. With HPD st reet p erform ance ac cessor ies, including the new supercharger kit, the CR-Z will surprise everyone again with even higher levels of performance directly inspired by our on-track racing efforts.”

Chinese Motorcycle Industry Attempts to Reverse Export Decline The Customs and Excise department of the Chinese government have just released the half year motorcycle export figures for 2014.

The number of motorcycles exported from January to June 2014 was recorded at 4,661,792 units, a decrease of 6.24 percent compared with the same period of the previous year. The total value of the motorcycles exported for January to June 2014 was $2,504,508,389, a decrease of 4.54 percent compared with the same period last year.

Over th e last few months I have frequently documented the reasons for China’s slight but noticeable downturn with the main issue being India’s entrance on to national markets traditionally controlled by the Chinese

motorcycle industry. Here I will document the opinions of some of China’s motorcycle industry most influential commentators with regard to reversing the decline.

Chinese automotive industry historian and motorcycle event organizer Guo Changchun opined “we all know the reasons for the export downturn, the Indians and Japanese are encroaching on our markets, mainly due to the extra disp osable inc ome avai lable to customers that had previously only been able to afford Chinese bikes.

The China Chamber of Commerce’s motorcycle division has reacted to the downturn by organizing a forum to be held in Chongqing in September.

www.automark.pk | September-2014 | Page 35

Book Review Courtesy by Engr. IHT Farooqui

American wheels, Chinese roads

A REVIEW OF MICHAEL DUNNE’S BOOK ON GENERAL MOTORS

H

ow could one company—General Motors—meet disaster on one continent and achieve explosive growth on another at the very same time?

While General Motors was hurtling towards bankruptcy in 2009, GM’s subsidiary in China was setting new sales and profit records. This book reveals how extraordinary people, remarkable decisions and surprising breaks made triumph in China possible for General Motors. It also sh ow s just how vulnerable that winning track record remains. By the time of the financial crisis, China had become General Motors’ saving grace. The company was recording big losses in Western markets as it struggled to combat rising costs and appeal to US consumers. In China, however, GM’s sales rocketed from 100,000 cars in 2002 to 2.3 million in 2010, generating roughly one-third of

GM’s global profits No small part of GM’s success in China springs from its management of shifting business and political relationships. In China, the government makes the rules for —and c om petes in—th e aut o industry. GM’s business partner, the City of Shanghai, is both an ally and a competitor. How does su ch an unnatural relationship work on a dayto-day basis? Where will it go on the future?

General Motors also engages in constant battles with other global and Chinese car makers for the hearts of demanding Chinese consumers. Dunne gives us rare glimpses into the mindsets and behavior of this new moneyed set, the world’s new est class of w ealthy consumers.

China is already the number one car market in the world. During the next ten years, China will export millions of cars and trucks globally, including to the United States. American Wheels, Ch inese Roads presents read er s with fascinating illustrations of what to expect when Chinese cars, companies, and business people arrive on our shores.

Gaining access to the China market was a feat in itself. The opportunity was clear: Shanghai’s state-owned car company, Sh a ngh a i A u tom oti ve In du st ry Corporation (SAIC), was looking to

expand into a second JV after its venture with Volkswagen. But competition was tough. US car companies are used to being lobbied by governments to set up manufacturing plants in their state or city, but SAIC turned the game on its head. It created a race between Toyota, Ford and GM to invest hundreds of millions of dollars.

The incentive worked for Ford and GM, due partly to the promise of the local market, but also because of their fierce rivalry. “For the leadership at GM, the mere idea of being beat by anyone at Ford anywhere at any time was simply intolerable,” Dunne writes. The result was finalized in November 1995: SAIC and GM invested a staggering US$700 million in a plant to make the Buick Century and the Buick GL8 minivan in Shanghai.

GM won the bid in part because of its products. Though Buick in the US was confined mostly to the silver-haired crow d, in China the car was still remem ber ed as the king of th e road in 1920s Shanghai. Chinese consumers liked the old-style American cachet and – in a country where chauffeurs remain popular – the roomy back seat.

GM also bested Ford because it pledged not to withhold help or technology from the JV, as other foreign car companies such as Beijing Jeep were doing in China

www.automark.pk | September-2014 | Page 36

Monthly AutoMark International

China is already the number one car market in the world. During the next ten years, China will export millions of cars and trucks globally, including to the United States. American Wheels, Chinese Roads presents readers with fascinating illustrations of what to expect when Chinese cars, companies, and business people arrive on our shores. at the time. SAIC’s mission was leading China to build a car it could call its own, and GM promised to help them do that.

But the race had only just begun. Just as GM secured the license to produce a full-size sedan in China, company executives found out that, across town, Volkswagen had also sweet-talked SAIC into letting it introduce a full-size Santana. Honda then opened a venture to manufacture the Accord, another fullsized car, in Guangdong.

These developments increased the competition for government and SOE fleet purchases, wh ich were still responsible for about 80% of car purchases in China in the mid-1990s.

At the time, the key to success “was to get inside China’s protected industry and let the Chinese partners win p r od u c t i o n o r d er s f r o m t h e government,” Dunne writes.

To ug h er co mp et iti on g av e ca r companies new motivation to go beyond the government and begin to court a growing market of private buyers. But while Volkswagen and Honda did well with this segment, GM did not. In 2001, more than 50,000 Accords and Passats were sold in China, compared with only 20,000 Buick Century’s.

GM’s China employees realized early on that the reason for their failure among private buyers was the big Buick engine.

Chinese were willing to pay for an American classic, but they would not keep reaching into their wallets at the gas pump. Chinese wanted cars that were impressive, affordable and fuelefficient. Looking around, executives realized that GM had no car in its extensive US product line-up that Chinese people wanted. GM’s American

engineers, wh ose cu ltu re Dunne describes as one of “friendly arrogance,” remained opposed to turning the Buick sedan into a “dog” – a Detroit term for a big car with a little engine.

GM ultimately turned to its European unit to manufacture the missing product. It cobbled together the Corsa, a small, four-door sedan with a 1.4-liter engine m ad e by GM ’s Ger ma n subsidiary, and the Buick brand. The car, the Buick Sail, became a big success in China.

GM realized it needed more affordable, fuel-efficient products for the China market. But here the company ran into logistical problems. GM could not build China cars in the West because of the costs, but it was also reluctant to build them in China.

This was partly because Ch inese manufacturing operations were inferior to those in the West. But it was mostly because GM would have to split the revenues 50-50 with SAIC if it made a car under its China unit. GM would lose the revenue from shipping parts from its Europe and North Amer ican operations to China, and it would also lose sole claim to the intellectual property.

The US car company found a quick work-around. It bought the struggling operations of Daewoo in Korea and used those facilities to produce smaller cars for China. Here too, however, GM faced difficulties. With Daewoo, GM acquired plans to a small, snub-nosed car that it planned to launch in China as the Chevy Spark. But Daewoo workers leaked the blueprints to a Chinese company called Chery.

In 2003, months before the Chevy Spark was to be released, Chery launched the almost identical but cheaper QQ that went on to outsell the Spark five to one.

GM used the Korea operations to fill out its China product line in the years that followed. Though it continued to face tough competition and an uncertain market, the company steadily expanded its reach. Like other car makers, it benefited greatly from the government’s new subsidies for private buyers in 2009.

“American Wheels, Chinese Roads” comes across as the quintessential American business yarn, the kind ancient China hands spin over a draft at Shanghai watering holes like Malone’s or Big Bamboo. Dunne’s language is to-the-point but peppered with wisecracks and engaging anecdotes. Car people will go crazy for this book. But “American Wheels, Chinese Roads” is likely to be a helpful read for anyone seeking to understand business in China. It could also be a quick and valuable read for Chinese seeking to understand US business culture.

The book illustrates just how painful breakdowns in communication and conflicts of interest between Chinese and foreign partners can be. Dunne depicts the gamut of China challenges, from finding and working with a Chinese partner (hint: it’s a bad sign when your partner is nowhere to be found) to decoding local consumer preferences (Chinese c onsu mers respect th e presence of a waiting list) to the value of “the correct presentation of things.”

“So long as you set up your words in a way that appears palatable, anything is possible,” writes Dunne.

The book concludes by pointing out that the China auto story has progressed, but it is far from finished. China’s strategy has been to partner with foreign auto companies and absorb their technology in order to introduce strong domestic brands.

Adopted from China Economic Review

Courtesy by: Engr. IHT Farooqui

www.automark.pk | September-2014 | Page 37

Seminar - Review

Monthly AutoMark International

Progress or not ?

From buses to Qingqis, transport in Karachi has deteriorated with time

The quality of public transportation in Karachi has worsened over time as commuters have gone from travelling on double-decker buses in the 1940s to using highly dangerous three-wheeler Qingqis in the 21st century.

Dr. Noman Ahmed, the chairperson of the architecture department at NED University, was not satisfied with the development in Karachi over time as he spoke at a seminar on last month evening. The daylong seminar on ‘Smart City Advocacy in South Asia and Urbanism’ was held at Karachi Expo Centre. It was organised by the Association of Builders and Developers of Pakistan (Abad).

“Let’s hope they [commuters] don’t go back to the age of travelling on horses and ponies,” he said. He referred to the unplanned and unchecked growth of multi-storeys in katchi abadis and the construction of high-rise buildings as the ‘high-rise syndrome’ and claimed it was highly dangerous for the residents of Ka ra ch i. H e ca lled for th e implementation of the city strategic master plan 2020, the formation of a metropolitan planning agency and the replacement of ad hoc projects with wellsurveyed plans.

Smart city Talking about the aim of the seminar, Abad senior vice-chairperson Saleem Kassim Patel said they wanted to bring together intellectuals and engineers to discuss and suggest ways to address Pakistan’s urban issues and housing problems and how to turn its cities into smart cities that are perfect for good living.

Institute of Architects Pakistan (IAP) Karachi Chapter president Architect Mumtaz Jilani defined a smart city as a place where there is investment in human and social capital, traditional and modern infor mation and a co mm un icati on t ec hn o log y infrastructure that fuels sustainable economic development and a high quality of life, with a wise management of natural resources. Such a city has smart people, smart mobility, smart economy, smart environment and a smart government.

Once the requirements of a smart city were laid down, Pakistan Green Building Council’s CEO Aqrab Ali Rana talked about the reasons why Pakistan has been unable to develop smart cities. “It is the lack if the concept of working together,” he said. The government, the private sector, the academia, NGOs, and the general public have worked for years

but the reason why the country has not progresses is because everyone is working individually. “We need to work together to get what we need to achieve,” he said.

To get smart cities, Pakistan needs capital, technology, awareness, proper bylaws and institutions, said Rana, ur ging p eople to encou rage th e use of local material and natural resources.

Architects Mukhtar Husain and Komal Pervez spoke on the generosity of Karachi, which has provided shelter to over 22 million people. Due to the rapid increase in population Karachi has not m ad e a ny a dv anc eme nt i n it s infrastructure, said Hussain, adding that it is still counted as one of the 10 mega cities in the world. Every morning its children go to schools and its people h ave opp ortunities to work and more people are migrating to Karachi, he said.

The seminar ended with vote of thanks

by Abad chairperson Mohsin Sheikhani who called for collaboration and joint effort to resolve the problems of the city including its security issue. “We wanted to gather you people to do something for the problems we face,” he said. “If we did not do something now, we won’t be able to live in this city in the days to come.”

www.automark.pk | September-2014 | Page 39

Corporate Event - Press Release

Monthly AutoMark International

Crown Group rewarded for 9th Consumer Choice awards

27th Aug 2014: In 9th Consu mer Ch oice awards distribution ceremony Crown Group (CRLF) rewarded for two major awards, one in the category of Consumers Choice Award for best Automotive Parts and other is Consumers Icon Award for Best Motorcycle Parts in Pakistan. This award has been organized under the banner of Consumer Association of Pakistan and given to Consumer’s friendly brands engaged in the manufacture and supply of the categories of goods and services. The ceremony held on 27th August, 2014 in Pearl Continental Hotel, Karachi.

In this event Provincial Minister for Industries and Commerce M.A Rauf Siddiqui distributed the awards among the awardees. On behalf of Mr. Farhan Hanif (CEO-Crown Group), Mr. Shabbir Pervaiz Qadir-DGM South received the Consumers Choice Award and Mr. Muhammad Jamil-DGM North received the Consumer Icon Award.

T h i s p r e st ig i ou s a w a r d is an acknowledgement for Crown Group (CRLF) who maintained the quality standards over a decade. It developed a relationship of trust among consumers with its quality motorcycles and spare parts due to this reason CRLF become the most popular manufacturer in the consumers Issued by: Crown Group of Companies

On behalf of Mr. Farhan Hanif (CEO-Crown Group), Mr. Shabbir Pervaiz Qadir (DGM South) received the Consumers Choice Award (on best Automotive Parts) from M.A. Rauf Siddiqui Provincial Minister for Industries and Commerce.

On behalf of Mr. Farhan Hanif (CEO-Crown Group), Mr. Muhammad Jamil (DGM-North) received the Consumers Icon Award (on best Motorcycle Parts) from M.A. Rauf Siddiqui Provincial Minister for Industries and Commerce.

www.automark.pk | September-2014 | Page 38