Automark magazine nov 2014 by Mustafa Hanif

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Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. November-2014 edition Volume 07, Issue 11

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

Monthly

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

Advisors

Muhammad Shahzad

Imtiaz Rastgar CEO, Rastgar Group & CBI External Expert, Ex-chairman EDB Islamabad

Advertising Manager Tahir Siddiqui

Circulation Manager Abdul Khaliq

Graphic Designer Salman Hanif

Web Master Murtaza Hanif

CONTRIBUTING IN THIS ISSUE M. Yousuf Shaikh Engr. Aisf Masood S.M. Ahsan David McMullan Ali Hassan M. Owais Khan Shahzad Tabish Amjad Ali David McMullan from International Desk

Engr. IHT Farooqui Senior Automotive Engineer Karachi 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

Auto industry hopeful of stable, long-term, growth-oriented policy Auto Industry is hopeful for a stable, long-term and growth oriented policy to give direction to a heavily manufacturing-based industry, which requires substantial investment in infrastructure, manpower and machinery on regular basis. A firm and transparent policy was very important for the industry. Due to long manufacturing cycles, planning process must start well in advance and if government policies are fickle and unstable (such as unclear stance on used cars) the entire value chain is at risk and shy away the investors . Indust ry already submitte d its proposal to Engineering Development Board in March 2013 and that proposal included the agreed tariffs that would serve as a relief to the local manufacturers. As for import of used cars, the industry recommends further increase in used car valuation. “We appreciate the fact that the government has recognised lower duties and taxes on imported used vehicles and increased the duty by 10 percent in the last budget. However, the extent of this increase is nominal compared with the increase in global prices due to various reasons like increase in cost of raw material, improved technology and exchange rate, whereas fixed dollar duty for import of used vehicles ascertained in SRO-577 has been revised once in 9 years. The Pakistani auto industry, much like any other industry, attracts government levies such as import duties and progressive taxations. The prices of vehicles manufactured in Pakistan are even cheaper than other countries such as India, UAE and Thailand. Tthe government should provide a level playing field to new entrants by providing them tax holidays while maintaining the existing customs duties and tariffs to avoid discrimination. The two categories that are: category A gets 5year duty relaxation (10 percent duty applicable on existing or new OEMs with the condition to achieve 25 percent localization from after 2ndyear) and category B gets 2-year duty relaxation (10 percent duty applicable on existing or new OEMs but there is no relief after 2nd year).

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Contents

November-2014

Reviews/Reports

Exclusives Articles 14 16 24 34 41

FBR, Atlas Honda on collision course by Ali Hassan CCP exposes PAMADA by Owais Khan Government Set to Buy Expensive Power from Coal by Engr. Asif Masood Cheap Cars – A Factor for China’s Motorcycle Industry Downturn by David McMullan

12 18 22 39 43

Genuine buyers to wait up to next year for Toyota Corolla by Owais Khan

Price List 36 Car/Light commercial vehicle price list 37 Motorcycle Price LIst

automark magazine

www.automark.pk

Inside

Reviewing the FAW V2 Car (COVER STORY) by AM research team Suzuki GD 110S - A New Generation Commuter Motorbike for All An Eco-Technical Review of Suzuki GD 110S by Shahzad Tabish & Amjad Ali Driving into the future By Tariq Ziad Khan PCMIC participated the International Investment conference by Muhammed Yousuf Shaikh An introduction to auto 'Parts Management' by S.M.Ahsan

News Update 32 38

Draft Auto Development Policy 2014 Tariff structure for auto sector revised Automechanika 2014 Frankfurt Germany

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Exclusive Review by AM Research Team

COVER STORY

Reviewing the FAW V2 Car

Starting from the power plant the car is equipped with a 1.3L EFI engine equipped with VCT-i more commonly known to us as VVT or electronically controlled Variable valve timing, this technology is 100% acquired from Internationally very known Japanese brand.

he passenger car segment in Pakistan h a s b ee n p r e d o mi na t ed a nd monopolized by Japanese based OEMâ&#x20AC;&#x2122;s. The prior efforts to introduce and expand the competition till this very instant have been not very successful eith er du e to the lack of Brand Recognition and Brand Prestige, Quality flaws in the products introduced or failure of establishment of Aftersales network. Pre vious atte mpts made belonged to both globally recognized

brands as well as local industrial tycoons however all have had to bite the dust till this point on. Al-Haj FAW is a brand name which is well known in the heavy vehicle and trucking sector of Pakistan after having established its strong hold as the major shareholder in the Pakistani market and breaking the back of monopolis tic industry. Until this very instant, Al-Haj FAW has not made a serious push into the passenger car segment the only previous effort made from Al-Haj FAW

includes the introduction of passenger carriers named X-PV; however, with the introduction of FAW V2 the Chinese backed OEM has now placed its first foot hold in the car segment of Pakistan.. The V2 is based on a small hatchback platform based on Toyota Vitz, however the package on offer is a brilliant surprise. Starting from the power plant the car is equipped with a 1.3L EFI engin e equipped with VCT-i more commonly known to us as VVT or electronically controlled Variable valve timing, this technology is 100% acquired from Internationally very known Japanese brand. This means that the engine churns out 90bhp and that too with the availability of power and torque throughout the entire RPM band while not compromising the fuel economy. Claims for the approximated theoretical fuel economy have been made by the official FAW pers onnel to be somewhere around 16 Km/l however practical testing has revealed the fuel economy figures of around 11-13 Km/l depending obviously on the driving conditions and the accessories used by the driver. The exterior is not as aesthetically appealing as compared to the stylish rival hatchbacks, however a closer observation reveals features that are eye catching and worth having. The tail lamps comprise of LED illumination while the car comes equipped with

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Monthly AutoMark International

standard High Mount tail lamp mounted on rear spoiler featured alongside with the turn signal lamps available on the side vie w mirrors. Th e next big attraction is the standard 6 spoke alloy wheels that illuminate the exterior package. When it comes to features of interior, the V2 surprises us with excellent illumination of the central console coupled with the barrel type instrument panel which houses the speedometer and tachometer. When it comes to electronic features V2 is fully equipped with the standard features one could possibly imagine within a local top end model. V2 comes with standard power windows and central locking features. The car also comes equipped with power steering for the ease of ma neu ver ing a cr oss th e u r ban environment. For any car being spacious is a must these days. The height of the car is suitable enough to accommodate the tallest of passengers while the interior has enough room to easily accommodate 5 passengers. Talking about the boot, the space provided is comparable to the rival hatchbacks. Safety is a prime concern of any family man willing to go for the purchase of any vehicle. The car comes equipped with standard twin frontal Airbags for driver and passenger not forgetting the fact that Seatbelts come as standard for

all four passengers. The USP of the vehicle is availability of standard built in Crash door beams which reduce the body crumble in case of a side impact. This feature is found as an option in the prestige vehicles on offer by our local OEMS. FAW V2 also comes equipped with Bosch ABS and EBD systems which ensure that braking effort is optimized even for the naive drivers. The driving comfort is assured as the car houses independent suspension for all four wheels. This means that handling the odd pot holes and speed bumps is a charm and the passenger remains isolated from the resulting harm. With the local Emission standards compliance a necessity as per the instructions of EPA, the V2 comes with a Euro 4 emission rating standard, which outmatches most of its rivals. As far as my personal perspectives are concerned, the V2 is fairly reasonable when it comes to comparison in between the imported vehicles, the V2 should be a better option. What we have observed in the past is a fact that though the imported used cars is worth buying only however when it comes to the availability and cost of spares the customer is left in tears. For the V2, this won’t be a problem as the vehicle comes from an already established OEM in Pakistan

and it is certain that the customer would be able to find the spare parts at the nationwide 3S dealerships network, if not road side vendors. So for those considering imported used car purchase in the near future due to additional features and performance on offer at an affordable price, it is recommended that they go for a Vizi V2 test drive which won’t disappoint for sure amid their expectations. We have to keep the fact in mind that European Automotive sector has clearly claimed that the streets of Europe would start pouring with Chin ese based passenger cars within a matter of five years based on study that the Economic giant has taken over the manufacturing industry of the world. Considering this fact we have to consider the case of FAW V2 seriously. If the Chinese based cars would be able to take over the western world within a short time based on the fact that the product and manufacturing quality over the time has increased drastically while keeping the costs fairly ver y r eas onab le to t h e g lob al competitio n main ly Japanese and Korean why isn’t it possible that they could establish a stronghold in our local sector as well? Let’s hope for the very best for V2 laying our trust on it to bring the winds of change for our local market. Cheers!

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Exclusive Article by Ali Hassan

FBR, Atlas Honda

on collision course

he Federal Board of Revenue (FBR) has suspended the sales tax registration of Atlas Honda Limited in the third week of October and also asked Pakistan Customs to stop the clearance of import and export of the company. The FBR took the decision against the leading bike assembler on refusal to provide inventory details to the auditors of Inland Revenue. The bike assembler has filed the petition against Ministry of Finance, FBR, Com missioner Inland Revenue, A ssistant Commissio ner Inlanad Revenue and PRAL (respondents) in the Sindh High Court (SHC) in the third week of October. Through in stant petition, the petioner has impunged the initiation of audit proceedings against the petitioner for the tax period July 2011 to June 2012 by the Commissioner Inland Revenue, LTU, Zone-IV, Karachi in respect of sales tax affairs of the petitioner on the grounds that after insertion of Section 72-B in the Sales Tax Act, 1990 through Finance Act 2010 only, the FBR has the authority to select a case for audit per learned counsel, on the subject controvery, several petitions are pending before this Court wherein notices h ave been is sued and the

respondents have been directed not to take any adverse action pursuant to such audit proceedings. Learned counsel further submits that though in itial ly the petitioner has responded and has supplied the relevant detail and information without prejudice to the objections with regard to their ju risdiction, h ow ever, since the respondents have recently suspended the registration of the pe titioner, whereas user ID has been blocked in violation of provision of Section 21(2) of the Sales Tax Act which according to learned counsel for the petitioner, provides for such extreme action under two situation i.e. if a registered person is involved in issuance of fake invoices or tax fraud, whereas per learned counsel, such extreme action cannot be taken on the alleged non-compliance or non-submission of documents. It has been prayed that respondents may be restrained from taking any further

adverse action again st petitio ner whereas the order dated 14.10.2014 may be suspended. Let notice be issued to the respondents as well as DAG for 05.11.2014. In the meanwhile, the respondents are directed not to take any coercive action against the petitio ner in respect of audit proceedings initiated in the instant case till next date of hearing, whereas, the order of the respondents number 3 (commissioner inland revenue) passed on 14.10.2014, whereby the registration of the petitioner has been suspended and user ID has been blocked, shall remain suspended till next date of hearing and the user ID of the petitioner be de-blocked. Sources in FBR said the Large Taxpayers Unit (LTU) Karachi had suspended the sales tax registration of the company for obstructing the audit proceeding by denying the tax officials to share the records of sales and purchase, where the tax authorities had found serious discrepancies. The sources said the registration was suspended on October 14th 2014 and till October 22, it remained suspended. However, sources said that the court had given orders to restore sales tax registration number in the FBR system ti ll final decision of th e cou rt. The FBR sources said the company had purchased bulk quantity of parts, assemblies, sub assemblies, components a nd s ub com po nents u sed f or motorcycles manufacturing but failed to substan tiate the used and the remaining goods. The goods including crank cases, crank shaft, hardware items of engine, carburetor, barring, oil seals, and many other engine and body parts. As per FBR website only active taxpayers are allowed to import and export. Sales tax input credit/adjustment allowed, only if purchases are made from active taxpayers. Expenses for income tax will

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Monthly AutoMark International Sources in FBR said the Large Taxpayers Unit (LTU) Karachi had suspended the sales tax registration of the company for obstructing the audit proceeding by denying the tax officials to share the records of sales and purchase, where the tax authorities had found serious discrepancies.

only be admissible if purchases are made from active taxpayers. Only active taxpayers will be able to participate in the procurement tenders. Only active taxpayers will be able to operate as clearing agent, shipping agent, etc. Only active taxpayers will be able to serve as consultant, adviser, etc. According to local print media report of The News, the local office of Inland Revenue selected the company for audit in March 2014 for the period April 2011 to Ma rc h 2012 aft er d etect ing discrepancies in purchased goods and its utilisations. The FBR sources said that initially the company resisted on the selection for audit arguing that a commissioner of Inland Revenue could not select cases for audit. However, the company later on cooperated with the authorities after realisin g the ch an ges in the law regarding the powers of a commissioner for selecting cases for audit. Th rou gh Finance Ac t, 2013 an explanation inducted to Section 25 of Sales Tax Act, 1990 that states: “It is declared that the powers of the Board, Commissioner or officer of Inland Revenue under the sections 25, 38, 38A, 38B and 45A are independent of the powers of the Board under section 72B and nothing contained in section 72B restricts the powers of the Board, Commissioner or Officer of Inland Revenue to have access to premises, stocks, accounts, records etc under these sections or to conduct audit under these sections.” Section 72B of the Act authorizes the FBR to select cases for audit through computerised random balloting. In the case of the two–wheeler automobile manufacturer, the tax authorities had asked for records as described under Section 22 of the Act where taxpayer is liable to provide records of supplies and purchases showing description, quantity

and value of goods. The FBR sources said that the company had provided soft copies of purchases made but no further detail s were provided about utilisation against manufacturing. The tax authorities repeatedly insisted on the records and finally issued show cause notice, on which the company refused to further cooperate.

The sources said the sales tax registration of the company was suspended under Sales Tax General Order (STGO) No 35/2012 dated June 30, 2012 where a commissioner can suspend the registration of a company on refusal to allow access to business premises or ‘refusal to furnish records to an authorised Inland Revenue Officer.’ Meanwhile, market sources said in January last year Atlas Honda also came under scrutiny by customs staff as they detected duty evasion of Rs34.6 million on import of spare parts. Model Customs Collectorate (MCC) of Apprais ement identifie d a goods declaration by the motorcycle assembler where importers grossly misdeclared the actual value to conceal the duty and taxes, included: Customs Duty, Rs11.69 million; Sales Tax, Rs8.56 million; Income Tax, Rs2.68 million; and fine at the rate of 35 percent Rs11.69 million. Sources told MONTHLY AUTOMARK that one of the main reasons of these kinds of practices are the loopholes in the import policies of auto sector. Around eight types of import categories for same parts imported from outside Pakistan for local assembl y exists.

The FBR sources said that initially the company resisted on the selection for audit arguing that a commissioner of Inland Revenue could not select cases for audit. However, the company later on cooperated with the authorities after realising the changes in the law regarding the powers of a commissioner for selecting cases for audit. Import under SRO 656/2006, customs duty at the rate of 15 per cent, commercial imports by the OEMs and commercial importers at the rate of 50 per cent, import under SRO 693/2006 customs duty at the rate of 15 per cent plus 35 per cent, making a cumulative 50 per cent. Import under 655/2006 customs duty at the rate of 10 per cent, 15 per cent and 20 per cent by changing the name of parts as sub assemblies, components an d sub compo nents. Import by the importers and OEMs through misdeclaration, under invoicing and misdeclaration of weight. Open smuggling, import under SRO 655/2006 of raw materials at the rate of zero per cent customs duty. After a complicated tax structure, another game is also being played by the FBR and the industry people are valu ation ru ling of bi ke p art s. A lot of changes occur in the import of parts for commercial importers and the OEMs which is surprising. Two types of customs duty structure should be implemented for bike sector in or d er t o cu rb ta x eva sion, misdecl ation, under invoicing etc. A uniform rate of customs duty on spare parts for all types of bikes at the rate of 25 pe r cent for all kinds of parts, localized, non localized, assemblies, sub as semblies, components, and sub components. It should be implemented for after market and assembly of bikes. Second type of customs duty is CBU rate of duty which must be fixed at the rate of 40 or 45 per cent. This is the only way to stop corruption in the auto sector....

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Exclusive Article on Car Sector by Owais Khan

Competition Commission of Pakistan Creating a level Playing Field

he Pakistan Automobile Manufacturers A uth ori sed Dea lers Associa tion (PAMADA) has recently become famous by grilling used car dealers’ lobby and b r i ng i n g i n to li m e li g h t t h e ir malpractices to the press. But the situation has now reversed. The latest inquiry by the Competition Commission of Pakistan (CCP) has lit e rally e x pose d PA MA DA’s wrongdoings thus suggesting that corrupt practices are more alarming in organized dealership network than used car dealers’ showrooms. As per press reports, CCP has issued show cause notices to PAMADA and its 44 members for prima facie cartelization, collusion, price fixation and collective decision making. Th e a uto assemblers h ave used PAMADA as a tool to handle All Pakistan Motor Dealers Association (APMDA) chairman H.M. Shahzad mainly as many chief executives of the auto assembling units and even vendors avoid giving reply to Shahzad’s continuous criticism on assemblers as they thought Shahzad does not match their intellectual level. Even these executives refused to attend the meetings between stakeholders and government officials in which H.M. Shahzad was invited. Most of the PAMADA press releases were mainly targeting APMDA chief H.M. Shahzad for promoting a case for a more liberalized import of used cars and spitting venom against the local car industry. However, the latest nerve wrecking CCP findings are enough to make a strong opinion that PAMADA has been actively involved in wrong business practices. The action against PAMADA recalls a

recent action taken by the Competition Commission of India by imposing a penal ty 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 was fined Rs. 1,346 crore whereas Maruti Suzuki was asked to pay a fine to the tune of Rs. 471 crore. Mahindra & Mahindra was 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 hig h prices for their sp are parts.

The regulator also said that 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. It is interesting that the CCP has taken the decision after a recent action by Competition Commission of India which suggested that India’s move might have worked as a wakeup call for Pakistani watchdog. Authorized dealers offer spare parts, accessories and lubricants at their showrooms higher than market rates by claiming to be genuine. It is to be seen whether CCP will succeed in imposing h eavy penalties on PAMADA members as per the steps taken by India Competition Commission or it will succumb to the pressure of strong cartel of local assemblers who must be using all the powers on CCP to dismiss the case.

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The service, tuning charges and car wash rates at authorised dealers’ showrooms are much higher than the market prices. It is surprising that PAMADA chief Iqbal Shah has so far kept a mum in the press against the CCP inquiry report. However, it is not clear whether the

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Monthly AutoMark International

Association has approached the CCP from the back door or adopted wait and see approach. The commission has also drafted a detailed analytical inquiry report on automobile sector containing data and other supportive evidence regarding cartelization. The CCP took a suo motu notice of allegations against PAMADA that it was fixing rates of automobile repair and paint jobs. Consequent to an i nq u i r y c on d u c te d b y th e Commission, a search and inspection of the premises of PAMADA was al so carried out, under Section 34 of the Act, on 7 May 2014. According to the findings of the inquiry report, prima facie, collusion took place in four relevant markets, i.e., (i) new aut omobiles sales, (ii) genui ne automobile spare parts, (iii) automobile body repairs and paint jobs, and (iv) the experienced sales and technical staff hiring by authorised dealers in Pakistan. With respect to the market for new automobiles, PAMADA appears to have taken decisions regarding the division of the market and allocation of quota with respect to new automobile sales. Similarly, PAMADA apparently fixed the price s of ge nuin e spare-parts supplied by automobile manufacturers by strictly prohibiting its members to offer discounts. In the area of body repairs and paint jobs, PAMADA took collective decisions regarding the rates of automotive body repairs and paint job services offered by its members, especially for insurance companies. And finally, the evidence of collusion was allegedly found in the area of human resources, where PAMADA allegedly took collective decisions to restrict the

movement of human resources between automobile dealers.

The inquiry report noted that these arrangements between PAMADA and its members apparently have the object and effect of preventing, restricting or reducing competition in the relevant markets. On the basis of the findings of the inquiry report, PAMADA and its 44 Members were issued show cause notices. The CCP's inquiry observed that collusion and cartelization are anti-competitive behavior. When competitors take collective business decisions, the market and consumers suffer from uncompetitive prices, fewer choices, and reduced quality of products. The report said th at usually, th e insurance companies entertain the claims of their clients at the authorised dealerships of the auto manufacturers to ensure quality of work, although similar work can be done in the open market at lesser rates, and the customers also prefer to get their work done at the au th orised d ealer sh ip s of a uto manufacturers perceiving better quality. However, the documents impounded from the PAMADA office indicate that PA MA DA memb ers, by w ay of collectively fixing the rates of the services, are prima facie hampering the free market mech anism of price discovery. Such arrangement of fixing prices is clearly against the interest of insurance companies who are subjected to a fixed price irrespective of the quality of service they obtain, and to customer

who invariably end up paying higher p r em iu m s. Fu r t h er m or e, su c h arrangements leave no incentive for the service provider to improve the quality of service and attract new customers. Therefore, in long run, the investment in development of new products and services is also curtailed. The documentary evidence indicates that PAMADA has formulated a policy whereby a member cannot hire another member's employees without the latter's consent. An example has been provided in the evidence in which an ex-employee of one PAMADA member who was hired by another PAMADA member was fired to avert a violation of PAMADA policy. This provides an unwarranted means of collectively controlling movement of human resource within the industry. The restriction hampers competition between members, as experienced sales and technical staff cannot freely move around, which is critically important for bringing effective competition in the relevant market. During the examination of documents, it has been observed that PAMADA members have divided the market for new automobile sales and have allocated quotas on the basis of geography and customers. The evidence indicates that PAMADA's members, along with other dealers, have taken the decision to divide an d allocate vehicl es sales along te r ri t or i al li ne s a nd h a ve a n understanding not to poach each others' corporate clients. Clearly, this restricts and pot entia lly eli mina tes any meaningful competition, to a large extent, in the relevant market, it added. ...

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Exclusive Review by Shahzad Tabish & Amjad Ali

Monthly AutoMark International

Suzuki GD 110S - A New Generation Commuter Motorbike for All An Eco-Technical Review of Suzuki GD 110S All in all GD110S is a globally recognized model introduced in Pakistan for the benefit of local sector. The consumer market has been looking dearly for a change in the two wheeler technology & Pak Suzuki has brought a fresh breeze of modern technology in this sector for the consumer market to appreciate & adapt. It’s in our hands to appreciate & adapt the technology of the future or cling on to the medieval technology & obsolete designs Affordability, Economy, Adaptability, Reliability are not the only words striking our minds when we hear about a motorbike in the first place. Although, a motorbike inspires a mobility fanatic ju st b ec au se of th e menti oned characteristics, though the true charisma of a two wheeler is for those who take inspiration from this form of automobile due to its agility, maneuverability & instability. In Pakistan a two wheeler is considered to form a mainstay of transportation these days due to sky high car prices topped up with hiking CNG prices & its unavailability. As far as the common man’s motorbike is concerned the design most commonly seen today in our market is obsolete when we consider the globe. Two wheeler segment of the industry is certainly leads by Atlas Honda since last three decades. There is no such direct competition from a big name except few of the local and some Chinese manufacturers. Eyeing the immense demand of the motorcycle consumer market m any Chinese & Japanese oriente d OEM’s now seek to expand their product line with newer, attractive, powerful &

economical models in order to attract the customer. Such an initiative, as we see in the recent past has been taken from the Pak Suzuki motor company; by first introducing Suzuki Raider and GS150 following it up with an international model named Suzuki GD110. Raider is based on the older sprinter only cosmetics have been changed while the GD 110 is an entirely different story. The motorbike was launched on May 21st 2013 in a ceremony & comments were made like “After a very long period, Pakistanis are

Mr. Hirofumi Nagao, MD Pak Suzuki along with Mr. Azam Mirza, GM Marketing at GD110S Launch event held at PC Hotel Lahore on 30th October, 2014.

looking beyond the 70cc motorcycle market. We are cognisant of this fact, and this is why we are presenting a new motorcy cle today with higher engine specifications” from Hirofumi Nagao, Managing Director Pak Suzuki Motor Compan y & “This is not a disposable motorcycle but will last longer” said Azam Mirza, General Manager Marketing for Pak Suzuki Motor Co. Ltd. Within the span of time that has passed since the launch of GD-110 the product has gained immense respect from the c om p et it or s a nd h as r ec ei ved overwhelming response from the consumer market with its fair share of critics.

This has to be kept under consideration that PSMCL management analyzed the critics and has come up with an improved version of the appreciated model GD-110 and named it GD110S where “S” represents the “Sports” variant.

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Exclusive Review by Shahzad Tabish & Amjad Ali

The ride quality of any automobile is determined by the suspension system offered with it. GD 110S offers coil springs with large travel ensuring smooth ride quality even on rough terrains. The suspension also features a 5 point adjustable mechanism which enables the rider to adjust the suspension in accordance to his requirements either stiffening or loosening the suspension setup. As an Automotiv e Engineer & an automobile geek, while visiting a Suzuki dealership, the first thing that I could notice is the sheer compactness of the motorbike itself, a feature th at amalgamate thorough ly with the frenzied tr affic cond itions of a metropolitan like Karachi; while differing it from its Chinese rivals which rely on bulky plastic body panels to make them look sportier. Technically the dimensions feature a 1.9m-0.75m length to width, while the best feature yet mentioned is the low height of seat i.e. only 766mm; even lower than that of a standard 70cc motorbike, facilitating the proper touchdown of even the smallest riders feet. Coming to aesthetics, in accordance to the styling design engineer Makoto Kato “A universally acceptable design had to be chosen which had to cater both the young & old generations”. Indeed the design features sporty looks; all the way from styled fuel tank & a sweeping exhaust muffler while featuring a circular headlamp from the classical commuters, providing a perfect blend o f y o u t h & c l a ss i c a l d e s i g n amalgamation. The Coloring design ex per t Naot o Ma eda sa id th a t “Universally acceptable colors of Black, Blue, Grey and Red were adopted while the application of colors was done in accordance to highlighting the bright design features while blacking out the shaded aspects of design”.

The other utility features provided with the package are also im pressive fea tu r in g a c las sic al an alo gu e speedometer & odometer with bright illumination. Featured along with the speedometer on the main display panel are the gear indicator lights, facilitating the rider & preventing him from the guesswork during the ride. Standard neutral, turn & headlamp indication lights feature beneath the gear indication display unit. Other switches apart from the standard ones feature an engine kill switch & a passing light actuation switch (locally known as a dipper switch). These feature s are an uncommon aspect as far as local motorbikes are concerned. Having discussed the aesthetics & electrical gadgetry let’s turn our attention to the heart of the motorbike, the power plant featuring 113cc capacity & a vertical cylinder layout uncommon to the 100cc motorbike pedigree. The power plant churns out 6.2Kw (8.3 bhp) of power output. The vertical cylinder layout has been chosen in order to have a longer stroke & smaller bore in comparison to the usual approach of wider bore to shorter stroke adaptation for motorbikes. The longer stroke helps improve the fuel economy of the motorbike when coupled with other design aspects of motorbike.

The valve train of the GD110S engine features smaller diameter valves in order to improve the intake charge velocity thus improving the vortex formation inside the combustion chamber & hence en h an ci ng ai r fu el mi x ing characteristics. The valve return springs are made from a narrower diameter wire which means lower stiffness & hence lower mechanical losses. The piston featured in the motorbike is a slipper piston, a usual for high speed engines r ed uc ing th e fr ic ti onal l osses, minimizing the vibrations & noise. In order to enh an ce the volumetric efficiency of the engine the air box volume is designed to be large; 3 liters to be precise as compared to the stan dard co unterparts featurin g a maximum of 2 liter capacity. The large volume of the air box is not the only aspect helping improve the volumetric efficiency but also the intake length from air box to carburetor & from car bur etor to intake h ave b een shortened in ord er to facilitate quick delivery of charge to the engine ensuring high performance from low to mid engine speed ranges. Coming to the carburetor itself, Suzuki reliance on the BS type carburetor has persisted. The BS carburetor is basically a constant depression type carburetor featuring a diaphragm for the venture piston operation coupled with a throttle plate controlled by the rider’s throttle operation. The carburetor optimizes

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Such an initiative, as we see in the recent past has been taken from the Pak Suzuki motor company; by first introducing Suzuki Raider and GS150 following it up with an international model named Suzuki GD110. Raider is based on the older sprinter only cosmetics have been changed while the GD 110 is an entirely different story. perfor mance & economy for the motorbike. As far as the economy stats are concerned, practical usage has revealed that the mileage varies from 50-60 km/L of petr ol, wh ich is staggering when we consider the engine is just 11cc short of a 125cc motorbike which doesn’t come close to such economy figures. The emission control standards haven’t been ignored in the development of the motorbike either. The Suzuki PAIR (Pulsed Secondary Air Injection) system featuring an ASV (Air Suction Valve) injects air to the exhaust manifold converting monoxides to dioxides & combusting the remaining unburnt hydrocarbons. Coming to the technical detail s of transmission firstly Suzuki takes pride in the seesaw type gear shift leaver design incorporated in order to prevent the rider’s shoes from damaging. The transmission itself features a four speed layout to facilitate a wider range of operation from each gear minimizing the necessity to change gears in quick successions. Along with the gear shift lever, the motorbike comes equipped with an auto decompression kick starter, a cam keeps the exhaust valve slightly open when the engine is not running which facilitates ease of starting the motorbike eliminating the inevitable pro bability of kick return due to co mpression bu il d up inside the combustion chamber & injuring the ankle of the motorcyclist. The ride quality of any automobile is determined by the suspension system offered with it. GD 110S offers coil springs with large travel ensuring smooth ride qual ity even on rough terrains. The suspension also features a 5 point adjustable mechanism which enables t he rider to ad just the

suspension in accordance to h is requirements eith er stiffening or loosening th e su sp ension setup. Having had a th orough technical spotlight on the motorbike & having discussed the running costs of the motorbike now let’s turn our attention to the maintenance costs of the motorbike itself. The motorbike features cassette type oil cleaner, drum brakes & wide (2.5in. front- 2.75in. rear) tube tyres in order to facilitate easy periodic maintenance while keeping the costs low. When the GD110 was launched many critics pointed fingers at the fact that it should have been launched inclusive of the self start option as the international variant possesses this feature. One further complaint heard of was for the mo dern styled h eadlamp cowling missing and the claim that PSMCL continues to introduce international mo torbik e variants with old style standard round headlamps. The USP’s of GD 110S are the additional 3 features it has over the standard variant including the self starter, Headlamp Cowling and casted Alloy wheels which are a response to the major critics the predecessor variant, GD110 has received over a period of one and a half years of its launch. The self starter in addition to the st a nd ar d ki c k d e c om p r e ss i on mechanism ensures that cranking the motor is a charm now. The Cowling has reenergized the styling of the motorbike

coupling together with the stylish Casted Alloy wheels. The Alloy wheels also eliminate the periodic maintenance aspect of balancing the standard spoke wheels, hence reducing running costs. A few of concerns from the consumers have been noticed, such as the inevitable concer n of th e motorbike being overpriced is being heard off. The price for this motorbike has been announced as 122,000 PKR which is considerably high when we consider that a Chinese 70cc is available at half the price, but considering certain facts & figures which include the technical supremacy of performance, economy & reliability over its counterparts & the exchange rates of Pakistani currency with that of other countries in which this bike has been announced including Philippines where the motorbike is available for 47000 peso which equates to 116,000 pkr, the motorbike is priced fairly. Perhaps those who co nsider benefitin g from low running & maintenance costs would surely gain from the product in the longer run. Besides to address the price concern, there are reports, that Pak Suzuki will be offerin g attractive installment package for motorcycle purchase. Another concern heard of is the absence of the disc brakes in the upgraded variant. The fact is however that after thorough practical investigation the standard drum brakes were found to be efficient enough for emergency braking situations and th e necessity for introduction of disc brakes was discarded as its introduction would have added far less value and would have increased the price of the product even further. All in all GD110S is a globally recognized model introduced in Pakistan for the benefit of local sector. The consumer market has been looking dearly for a change in the two wheeler technology & Pak Suzuki has brought a fresh breeze of modern technology in this sector for the consumer market to appreciate & adapt. It’s in our hands to appreciate & adapt the technology of the future or cling on to the medieval technology & obsolete designs. Cheers!

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Automotive Sector - Update

JICA TO ENHANCE QUALITY OF AUTO INDUSTRY Japan International Cooperation Agency (JICA) has agreed to undertake a four year te chnical sup port program in collaboration with the Smal l and Medium Enterprises Development Authority (SMEDA) for quality and productivity enhancement of the Auto Parts Manufacturing Ind ustry of Pakistan. A w ritten understanding for implementation of the project was developed the other day, which was signed by Ms. Shaista So hail , Joint Secretary, Economic Affairs Division (EAD), Dr. Mukhtar Ahmad, Sr. Joint Secretary, Ministry of Industries & Production (MoI&P), Mr. Muhammad Alamgir Chaudhry, CEO SMEDA on behalf of the government of Pakistan. Whereas, on behalf of the go vernment of Japan, Mr. Mo to o Taki, Leader Detailed Survey Team of J ICA si gned th e d oc u me nt o f understanding. JICA will undertak e a four years program to extend technical support to about 50 Auto Parts manufacturing units in Pakistan to upgrade their

facilities. The program will be conducted by five JICA Technical Experts who are expected to arrive in Pakistan in April 2015. The visiting Japanese experts will also hold a series of workshops both in Punjab and Sindh on productivity and quality enhancement in auto sector of Pakistan. Giving background of the aforementioned technical assistance program of JJICA, CEO SMEDA Mr. Mu h a mm ad A la m gi r Ch au d h ry informed that Auto sector was one of the fastest growing sectors in Pakistan. It contributes a lot towards the national economy through employment and revenue generation and the local vendors deem to play an important role in the growth of auto industry as they bear the responsibility of producing auto parts and sub-assemblies according to the bench mark set by the respective Original Equipment Manufacturers (OEMs), he said adding that on the other hand, local auto parts manufacturing indu str y is still i n the p rocess o f d ev e l o p m e n t a n d l a c ki n g competitiveness in terms of quality, cost and flexibility of manufacturing systems. It is to note that SMEDA has been collaborating with Japan International

Cooperation Agency (JICA) since 2004 to conduit best productivity and quality improvement knowledge and practices to th e in digenous manufacturers belonging to various sectors. In this connection SMEDA requested to Government of Japan (GOJ ) for initiating a long term technical support of J ap anese w ay of imp r oving productivity and quality. SMEDA aims to broaden the scope of productivity improvement activities across the value chain of auto sector and subsequently improving the share of localization of auto parts. A JICA detailed planning mi ssi on vi sit ed Pak ist an fr om September22, 2014 till October 10, 2014. The purpose of the mission was to formulate the detail s of the subject project in close coordination with S ME D A. A p a r t fr om d e ta i le d discussions held with SMEDA, JICA Survey Mission also visited 11 auto parts manufacturing units and conducted series of meetings with Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) and a number of OEMs both at Lahore and Karachi...

Cm gives approval to Apna Rozgar Scheme Chief Minister Shahbaz Sharif has said that 10 percent more quota would be allocated to southern Punjab districts under the Apna Rozgar Scheme. He said that vehicles would be provided to th e unem ployed you th on soft terms. According to a handout, the chief minister expressed these views in a meeting where he gave approval to the Apna Rozgar Scheme. He said that this scheme would provide respectable job opportunities to the youths. He said that me rit and transpare ncy would be ensured at every cost. CM Shahbaz said that youths were a precious asset of the country and that they were being empowered through provision of job

opportunities. The CM also inspected vehicles, which were to be given to the

unemployed youths....

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By Tariq Ziad Khan

Driving into the future accuse the sector of being anti-customer, hyper profit driven and disconnected from market requirements, all while hiding behind protectionist policies that kil l competition at the cost of the customers. The truth lies somewhere in between Employment and HR th ese tw o star k polar ities. Th e development automobile sector by some estimates Domestic market accounts for 3.5% to Pakistan’s GDP. It is also a powerful lobbying force through development Product development and groups such as the Pakistan Automotive Manufacturers Association (PAMA), the new technology All Pakistan Motor Dealers Association (APMDA) and the Pakistan Association Imports threats and external trade opportunities of Automotive Parts Accessories Manufacturers (PAAPAM). All these Image problem groups have been extremely effective in looking out for the diverse interests of the various players and have managed The automobile sector in Pakistan, to help it punch above its weight although dominated by less than a dozen compared to the other larger interest players across all major categories, groups vying for the attention of the continues to be a large employer in the government. economy. Estimates of people employed According to economy watchers, by the sector range from 200,000 whatever side of the argument one directly connected to the industry, to looks at, it is clear that like much nearly two million, when affiliated else in Pakistan, the sector is sectors that feed resources and materiel operating well under its potential into the industry are taken into account. and that in order to reach the next The sector has over half a century of level it will need to address the history and has grown into a large value following challenges: chain of assemblers, component Employment and HR manufacturers and service affiliates. development Analysts point out that despite some While there is no denying that the serious setback s in the course of automobile industry continues to be a th is hal f century – rangin g from large scale employer, the focus has been trade sanctions, depreciating currency on the manufacture of low yield, low parity, law and order deterioration and tech spare parts. According to industry political uph eav al – the in dustry has continued to perform and meet market requirements, which is no mean feat. On the flip side are the detractors who point out that the automobile industry is an oligopoly and one of the most organised cartels in the country. They

NEED TO ADDRESS THE FOLLOWING CHALLENGES

analysts, even with long standing players such as Indus Motors (Toyota) and Pak Suzuki, most of the high technology components as well as crucial engine components come in the form of CKDs (Completely Knocked Down kits) with local manufacturers making only low tech components. In their view the industry needs to further invest in human capital, particularly in high value fu nc tions, including design and manufacturing. This will not only increase the quality of the product, it will also ensure that the industry is not so overtly dependent on foreign sourced components, making it less prone to global economy led price shocks. This in turn will help it become more globally competitive and increase the chances of export earnings.

Domestic market development The law and order situation has held back growth in no small measure. Furthermore, the slowing down of the eco nomy in the face of the global recession has led to a massive slide in the value of the Pakistani rupee which has increased prices of industry offerings and depressed growth across the board. Economy watchers, however, believe that the industry can do much more to help the situation by becoming more assertive in market development. Many point out that the absence of a reliable public transportation network coupled with a growing population means that the demand for cars and two wheelers will continue to rise. Auto makers need

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The progression of Pakistan’s automobile industry is not unique and many other successful industries in Asia have come up the same curve, from being protected domestic industries to global players. The onus is on the industry in Pakistan to drive forward its case with various stakeholders to help it takeoff into the global mainstream to work with banks and financial services to ease up credit requirements, particularly for the salaried class. This would ensure not only the productive use of private sector credit, it will also jumpstart secure lending for other sectors, such as m ort gages and consumer electronics, thereby giving a shot in the arm to the economy. Many point to the recent upswing in the value of th e Pakistani ru pee and the weakening of the Japanese yen as an ideal opportunity for manufacturers to pass on pricing incentives to the salaried class and jumpstart such a programme.

Product development and new technology Auto makers need to work with the government on the deletion programme on a priority basis. Although the Engin eering Development Board’s (EDB) deletion programme has had limited success in pressuring assemblers to indigenise the manufacturing of components, it has only focused on the annual percentage that each model needs to be indigenised without any emphasis on the quality or level of technology transfer. This has led to manufacturers locally sourcing only low tec h p ar ts, su ch as seat s a nd windscreens. This has also meant that current assemblers are not keen to introduce new models while new players cannot enter the market because they are required to meet the deletion targets very early in the lifecycle of a new model. The priority is for the industry and the government to develop the deletion programme further and strike a balance between the need for job creation and value addition. The government should ease the deletion requirements for those asse mb ler s w h o br in g i n ne w technologies (like hybrids) and who are committed t o ind igenise hig her technology and value added production processes. However, for this initiative to work, the go vernment and the industry need to work together to safeguard both the public’s and the industry’s interests.

Imports threats and external trade opportunities The absence of skilled HR, an assertive market and product development has meant that the industry is always at a risk of being overrun by cheap imports and must therefore keep lobbying for government protection. This has led to the stunting of the industry (which still builds legacy models straight out of the 80s) while earning the ire of customers frustrated by a lack of innovation. Added to this, economy watchers lament the fact that the automobile industry, with only a slight re-orientation in focus, would be in great shape to compete in the estimated one trillion dollar global automobile trade. The low cost of labour and the proximity to large markets such as China and India and undeveloped ones, like Afghanistan, Iran and those in Central Asia, could turn Pakistan into a hub for parts and services supply, provided both the local industry and the government invest in value added manufacturing and HR. There have been numerous comparative studies between India and Pakistan on the cost of manufacturing automotive parts and many analysts are of the opinion that given a level playing field, Pakistan’s auto industry can not only hold its own but thrive in a globally competitive scenario.

customers. Th e p ro gr essi on of P aki st an’s automobile industry is not unique and many other successful industries in Asia have come up the same curve, from being protected domestic industries to global players. The onus is on the industry in Pakistan to drive forward its case with various stakeholders to help it takeoff into the global mainstream.

Image problem Despite the fact that the sector is a large scale employer and tax contributor to the economy, it is widely perceived as anti-consumer and elitist. More needs to be d one in term s of br and co mmunication and assertive PR directed at customers highlighting the achievements of the industry and the reasons behind unpopular decisions. Furthermore, automobile manufacturers need to work more aggressively on CSR ar ea s, li ke roa d safety, tra ffic management and defensive driving, to build a better public image. If the ind ustry w er e to w ork in areas like human capital development an d effectiv e brand partnersh ips with banks for better pricing and accessibility options, this would go a long way in improving its image with

Couresty: Tariq Ziad Khan, US-based marketer and a former member of Aurora’s editorial team.

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Exclusive Article by Engr. Asif Masood

Government Set to Buy Expensive Power from Coal The $34 Billion investment from China that they keep parroting about isn't actually an investment, it’s a loan. This loan carries a Fee/Interest Rate of 7% whereas the project loans Pakistan gets from ADB/WB etc are usually at a rate of 2-4%.

The protracted spells of what is arguably the worst load-shedding in the country show no sign of mercy. Ironically, the government says there is no short term solu tion to th e chronic problem. Frustrated citizens are left with no choice but to undergo the inexorable loadshedding schedules that range between 10 to 18 hours in different part of the country. Although the Pakistan Muslim League-Nawaz (PML-N) government has taken action against power bill defaulters with the recent sweep across the power corridors in the capital earnin g it a pat on the back , the longstanding quandary of transmission, distribution losses and power theft persist. Despite the N-League’s tall promises and attempts at resolving the issue of debt, the true picture of the existing situation is overwhelmingly dark, consumers are without power, crushed by heavy bills and fast losing confidence in the current government’s ability to handle the crisis.

Financial Indiscretion on Dilapidated Coal Power Plants The $34 Billion investment from China that they keep parroting about isn't actually an investment, it’s a loan. This loan carries a Fee/Interest Rate of 7% whereas the project loans Pakistan gets from ADB/WB etc are usually at a rate of 2-4%. To avail this loan, the condition is that there will be “NO BIDDING” for

the project and Government will award contracts directly to Chinese companies (or companies that will utilize Chinese equipment and contractors).For this to happen, Government has amending Procurement rules since currently it’s not possible to award such contracts without BIDDING Procurement rules amendment will allow Government to set the price itself for a certain type of work and award direct contract to any company without any bidding involved. Most of this Loan will be utilized for Coal based Power Projects for which Government has already filed a “Tariff Review Petition” in NEPRA headed by Khawaja Naeem – a close Relative of Khawaja Asif. Despite the fact that this “Tariff r eview petition” w as not maintainable since it was filed a year after review period expired, NEPRA has accepted the petition on Government’s request and has approved new escalated Upfront Tariffs for Coal based Power Projects. Government has requested (and NEPRA approved) to allow $1.7 Million Dollar per Mega Watt construction cost for such projects whereas India has recently built a better and more efficient (than approved by NEPRA) Coal based power plant at a cost of $ 0.55 Million Dollar per Mega Watt. So now, with “NO BIDDING” involved, Government will award contracts with a construction Cost of $ 1.7 Million per Mega Watt and hence 2/3rd of it will go into pockets of all the people involved. This also explains why “Hussain Nawaz” and “Salman Shahbaz” (who look after family business and have no apparent involvement in Politics) were not only part of state delegation but were also part of meetings that discussed and finalized these MOUs. This does not end here; NEPRA has also revised the ‘Rate of Return’ on investme nt from 17% to 27% (an

unprecedented step) for these projects. Not surprisingly, first company to announce a Coal based Power project under this program is owned by Mian Engr. Asif Masood Mansha. So now, be ready for country to be burdened further by $34 Billion Loan and a higher Electricity tariff… If everything goes as planned, at the end of the day “Some” will have their pockets heavier by 10-15 Billion Dollars or more…. On Transparency International website, letter written to Ministry of Water and Power regarding this is available Who went on China visit and was part of meetings is widely reported in Med ia (Sour ces are N EPRA, Transparency Internatio nal ). Also Nishat Energy is the company that announced to build Coal based plants with Chinese 'Investment'. On NEPRA website, one can find Govt's petition and NEPRA announcement document for Upfront Coal Tariff.

Fuel Supply Restricting gas supply to the power sector is a big issue which has not only made power expensive but also forced the government to keep generation to a minimum level to provide fewer subsidies. According to government officials, in current year, power plants received only 47% of the earmarked quantity, leading to increase in power tariff and widespread outages. The head of the IPP Advisory Council, Abdullah Yousuf, said that several power plants were shut down due to non-availability of gas. An official assessment reveals that the gap between gas demand and supply is widening and production is expected to drop to about half of the existing levels by 2020 if new reserves are not tapped

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Automotive Technology - Review

Monthly AutoMark International

Electric bikes, the new attraction for motorcycle lovers Younger people are realizing these electric bikes are genuinely fast. In fact, with the kind of performance electric motorcycles have these days, anybody who rides would be impressed How Harley-Davidson, Energica, Zero and other green machine manufacturers are battling to become the Tesla of motorcycles The roar of a Harley-Davidson engine is as distinctive as the popping of a champagne cork. But what if you could have all the power and beauty of a hog with a silent engine that doesn’t devour gas? That’s the question Harley asked earlier this year when it unveiled Project LiveWire, its futuristic prototype for an electric motorcycle. Harley-Davidson is hardly alone in the e-bike wars, where several companies are seeking to become the Tesla of motorcycles. And not just because it’s good for the environment. Last year, the major motorcycle brands—including BMW, HarleyDav idson, Honda, Kawasaki, KTM, Piaggio, Suzuki, Triumph and Yamaha— sold 561,000 bikes in the US, up from 557,000 in 2012 but down a staggering 53 percent from the 1.2 million sold in 2006. This year, motorcycle sal es r em ained relati vely u nc ha ng ed , according to the Motorcycle Industry Council, which tallied 139,922 new units sold in Q1, 17 units higher than the same

period in 2013. And while no one thinks electric bikes will save the industry, they could be a key factor in attractin g the next generation of motorcycle enthusiasts. “Everybody is very concerned with getting this new young rider,” says Mark Hoyer, the editor-in-chief of Cycle World. “And younger peop le are realizing th ese electric bikes are genuinely fast. In fact, with the kind of performance electric motorcycles have these days, anybody who rides would be impressed.” Electrics have been a niche market since 2010, when companies such as Zero, Brammo, Energica and Mission started experimenting with 50-plus-mile-range rides that looked just like traditional motorcycles but boasted zero emissions and gearless, aggressive, twist-and-go acceleration. The idea was that silent, maintenance-light bikes would be perfect for both urban commuting and o?-road cruising. And that they might attract new riders, particularly women, intimidated by the heavy clutches and grimy maintenance responsibilities associated with cafe racers and street bikes. There’s certainly room for growth:

Even though their numbers hav e increased by double digits since 2003, women still represent only 25 percent of motorcycle riders in the US, according to industry statistics. There were some early attempts at ebikes (especially from obscure Chinese brands) that felt more like glori?ed Vespas than high-tech Hondas. Within th e last year, h owever , electric motorcycles have become significantly more powerful, smoother and longerlasting. Zero, for instance, has drastically i mp r ov ed th e s u sp ens ion a nd powertrain technology in its $17,000 SR, which hits 97 kmph in 3.3 seconds on a battery range of 130 miles and takes seven hours to charge in a 110-volt outlet. Brammo’s $11,000 Enertia Plus gets 185 kmpl with a top speed of 97 kmph, and the $30,000, 160hp Mission R racer has a top speed of more than 241 kmph with a sub-3-second, 0–97 kmph sprint time. Then there’s the new Italian ?rm Energica, led by its young CEO, Livia Cevolini, which debuted the $68,000, 134hp Ego 45 superbike (0–97 kmph in 2.9 seconds) earlier this year. That bike will charge fully in just 3½ hours.

or output not increased from existing fields. Due to non-payment of dues by th e power sector, PSO h as been providing 18,000 to 20,000 tonnes of furnace oil to power plants against the requirement of 25,000 tonnes, leading to a dr op in power generation.

owe billions to suppliers, who, in turn, owe Pakistan State Oil Rs175 billion on account of fuel. Due to circular debt, power plants have again dropped production as they are uncertain about payments, with supply standing at 12, 067MW against a generation capacity of 16,400MW. With demand standing at 14,900MW, the shortfall translates in to outages. The recovery of bills in 2009 stood at 92 per cent, which dropped to 82 per cent during the tenure of the Pakistan Peoples’ Party-led regime. The situation is not any different today, as recovery stands at 82 per cent. The government

says that average loss is 22 per cent. But, according to officials, these losses have increased to 29 per cent – a major big setback for distribution companies which are facing a financial crunch, as one per cent loss equals Rs4.4 billion. The National Electric Power Regulatory Authority (NEPRA) has recently reduced permissible loss to 12.8 per cent from 16.5 per cent which may lead to a cash flow crisis for Discos swelling to Rs40 billion a year from Rs28 billion. Consumers would now be paying for 12.8 per cent losses in the power tariff instead of 16.5 per cent....

Circular Debt and Supply At every level, outstanding dues are owed to stakeholders in the power sector. Unpaid amounts add up to a amazing Rs503 billion, causing a circular debt of Rs197 billion. While the private secto r owes Rs288.08 billio n to electricity companies, these companies

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Monthly AutoMark International

HOW EURPOEN GAINTS STARTED THEIR BUSINESS IN CHINA Riding the hotel wave on the cusp of change Success story of Hilton Hotels in China Hilton bullish on growth prospects in China, according to top executive Hilton Worldwide Holdings Inc, the world's largest hotel operator by market value, has big dreams in China, ones that are hinged closely to the country's rapid eco nomic growth and burgeoning hospitality market, a top company official said. Christopher Nassetta, chief executive and president of Hilton Worldwide, said the co mpany plans to expand its footprint in China and also have more hotels in the pipeline. "By investing more resources, we want to consolidate our presence further," he said. Nassetta, who took office in 2007, said the hotel operator has ample confidence in the long-term growth prospects in China. At present, Hilton has 48 hotels under five brands and 140 hotels in its pipeline under construction in China. "We plan to introduce two more brands in China by the end of this year," he said. The first would be the Embassy Suites, which will be launched soon. In addition, Hilton may also launch its three-star brand - Hampto n, Nassetta said. "We want to cater to different types of customers, and our products range from three-star to super luxury." At the same time, Nassetta admits that Hilton has much catching up to do in China. "The strategies that we adopted earlier in China did not have the desired results. As a result, we lagged behind our rivals. But we are fast catching up." Hilton entered the Chinese market 26 years ago with a hotel in Shanghai. However, it had only five hotels in China by 2007. "I do not know why, since I was not there then," Nassetta said. Industry sources, however, said the hotel giant could not focus much on the China market due to various reasons. Hilton International and the original domestic US business, Hil to n Hotels Corp, became separate companies in 1964, a nd H H C r e a c q u i r e d H i lt on International in 2006. During the 40-year separation, HHC bought several brands, and after the two units reunited in 2007, the new Hilton Worldwide was a "very dysfunctional

org anization", th e sources said. "We were the No 1 brand in terms of customer awareness in every region of the world," Nassetta said. "But we were not doing anything about it." Nassetta, who has over two decades of experience in the hotel and real estate industry, was named CEO and president of Hilton Worldwide in 2007, after private equity firm Blackstone Group took control of the hotel operator. The $26 billion acquisitio n was considered a "bad investment" by many industry sources as the global hotel industry went into a tailspin due to the financial crisis in 2008. However, investors finally got rewards in 2013, when the hotel group listed its shares on the New York Stock Exchange. Hilton Worldwide raised about $2.34 billion in its initial public offering, a record of sorts for the hotel industry. Th e IPO succ ess a nd financ ial performance have h elped bolste r investor confidence, said anal ysts. Nomura Securities raised its price target for Hilton Worldwide to $29 a share on July 7, when the market price was $24.8. Hilton will enjoy a much higher growth rate than most of its peers due to its huge global pipeline and high operating leverage, Harry Curtis, an analyst with Nomura Securities, said in a recent research report. More important, the group's return to the capital market is considered by many industry sources as an innovative move championed by Nassetta. Martin Rinck, Asia Pacific president of Hilton Worldwide, said Nassetta has identified four strategic priorities for Hilton. These include al igning the culture and organization, maximizing performance, strengthening brand and co mme rcial service s, an d fu rther ex pand ing i ts glob al footp rint. "Nassetta has created a senior leadership team in Hilton to undertake these tasks. His passion for excellence and his incredibly engaging personality have helped transform the company from a sleeping giant to a high-performance powerhouse," Rinck said. Consequent to the listing, some industry

sources had expressed curiosity about Nassetta's next career target. "There is no next target", as there are still many things that can be done in Hil ton Worldwide, Nassetta said, adding that China is still an important market where Hilton has much to do. "We were inactive in the Chinese market during the first 10 years of the 21st century," he said. Inte rc onti nent al Hot els G r ou p headquartered in the UK had nearly 200 hotels in China by February 2014. Marriott International Inc had 67 hotels in China by April 2014 and plans to enlarge the number to over 100 in the next two years. Most of the hotel chains are betting big on growth in China due to the huge tourism potential and tourist numbers. China Tourism Academy estimates that domestic tourism revenue will hit 3.1 trillion yuan ($502 billion) this year and the number of outbound tourists will exceed 100 million person-trips. Hilton is aware of the potential and will take adequate steps to enhance its presence, Nassetta said, adding that he makes at least three to four trips to China every year. "I spend as much time as I can in China to help the growth (of our hotels)," he said. China ranks among the top four global markets for Hilton Worldwide currently. "It will be among our top two markets in the next five years," said Nassetta. "Though China's contribution to the Hilton global turnover is small, its growth has been fast." Hilton is not only targeting the home market in China, but also the rising outbound tourists. "We do not just serve the demand here, but also serve Chinese customers all over the world," Nassetta said, adding that the group had more than 687,000 rooms in 93 countries and territories as of June 30, 2014. He said Hilton's main priority in China would be to expand the business and boost b rand aw ar eness. " Th ese measures will help Chinese customers to automatically choose our hotels when they go abroad," he said....

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China Automotive Industry - Update

Monthly AutoMark International

Global Auto Forum China Industry leaders call for accelerating M&As & innovation On the first day of the two-day 5th Annual Global Automotiv e Forum (GAF) which began yesterday in Wuhan, Ch in a on t h e t h em e of ‘ T h e Transformation of China’s Automotive Ind ustry’, th e backd rop for th e discussion was the global economic environment and the ever- changing challenges in the automotive industry worldwide. The forum provides a platform for industry leaders, experts, finan ciers, anal ysts and media to exchange their opinions and share their knowledge to better anticipate the development of China’s automotive industry. As a key industry in China, the cur rent outpu t value of th e automotiv e industry contributes 6 trillion yuan (Rs 6,018,000 crore) each year to the Chinese economy, the production and sales volume ranked first among the world. China accounts for about a quarter of the world’s automotive market, making it a veritable automobile manufacturing and selling power. Making the opening remarks, Wang Ruixiang, chairman of China Machinery Industry Federation, said transforming the focus from volume production to quality production is critical. He said, “China's auto motive in dustry has entered into a critical period where it is fa ci ng c omp r eh ensiv e transformation and upgrading from a focu s on produ cin g volu me to producing quality.” Meanwhile, Wang Xia, chairman of the China Council for the Promotion of I nt er n a t io na l T r a d e ( CC P IT ) , Automotive Committee, China, felt the only way forward for the conventional automotive industry is a comprehensive transformation. “There is a huge c ont ra st b et w een th e C h ines e automotive market volume and the relatively weak position of the Chinese brand an d technology,” h e said. It w a s agr eed t ha t d ur ing th e strengthening of China's economic restru ctu ring a nd up gra ding, th e transformation of China's automobile had entered a critical period." Wang

went on to say that: "I strongly believe in the next five to 10 years, disruptive changes in the automotive industry will go beyond our imagination.” The Global Automotive Forum provides a highly international perspective and attracts the attention of the global automotive leaders. The attendees at the opening of the forum included: Wang Ruixiang, chairman of China Machinery Industry Federation, Chen Lin , commercial counsellor, Department of Outward Investment and Economic Cooperation, Wang Xia, chairman of the Automotive Committee of the China Council for the Promotion of International Trade, Ruan Ch engfa, vice-secretary of Hubei Province Party Committee and secretary of Wuhan Municipal Party Committee, Tang Liangzhi, mayor of Wu han Municipal Government as well as more than 1,000 delegates from domestic and foreign OEMs, component suppliers and other automotive industry or industry related companies. Today, GAF will see the first forum on ‘The Environment, Energy Conservation and New Energy Vehicles’ delivered by Michael Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), UK; and Keiji Ohtsu, managing officer, Automobile R&D Centre, Honda R&D, Japan. It will be followed by a designer roundtable discussion on ‘New Angles and New Mentality in Auto Design’ where the panelists are James Hope, corporate design director, Chery Motors,

China; Guy Burgoyne, design Director, Geely Automotive, China; Magnus Aspegren, director, Creative Consulting, BMW Desig n Wor ks S h angh ai , China/Germany; and Diana Kloster, Design Colour and Trim China, VW Group China, China/Germany. The third forum will be of much interest to component suppliers: ‘The Transformation Path of China’s Auto Suppliers’ where the panelists are J oe G re enw el l, c h ai r ma n, t h e Automotive Investment Organization; Chairman of the RAC Foundation, UK; Jay K Kunkel, president of Asia Pacific; Member of Executive Council, Lear Corporation, USA; Dr Simon Yang, president of Delphi China; managing director, Asia Pacif ic, Connectio n Systems, Delphi Electrical/Electronic Architecture, China/USA; and Edouard de Pirey, Val eo Chin a President, China/France. The closing plenary will be on ‘The Road Ahead for the Auto Industry’ – how 2015 is shaping up, predictions for 2020, key challenges and op p or tu ni t i es a n d i nt e l li g e nt transportation systems. The panelists for this forum are Matt Tsien, GM executive vice-president and president of GM China, USA; Li Shufu, chairman of Geely Group, China; Qi Yumin, chairman of Brilliance Auto Group, China; and Xiang Xingchu, general manager of JA C Motor s, Ch ina

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Automotive Sector - Update

Draft Auto Development Policy 2014 Tariff structure for auto sector revised A uniform CBU rate of 50 per cent has been fixed for the two and three wheeler automotive segments to rationalise the tariff structure. The import duty rate on non-localised components for the assembly of 2&3 wheelers has also been rationalised for the entire segment and fixed at 15 per cent. Federal Government has revised tariff structure for auto sector in the much delayed draft Auto Development Policy 2014 which is ready for consideration of the Economic Co-ord ination Committee (ECC) of the Cabinet, well informed sources in Engin eering Development Board (EDB) told print media. (Business Recorder) A committee headed by Minister for Water and Power Khawaja Asif had finalised the draft ADP 2014-19 in March 2014 without tak ing the views of stakeholders on board however the draft appeared in Business Recorder which led to the local auto sector raising hue and cry after which it was decided to take the private sector into confidence. Ultimately, the then Secretary Industries and Production, Shafqat Naghmi arranged a meeting between the auto sector including importers with the Minister for Water and Power. However, the meeting lasted for only a few minutes and the stakeholders were asked to send their suggestions in writing. Some segments of the auto sector, however, approach ed the deputy convenor of the committee, Muhammad Zu ba ir, Ch air man P riv atisa tion Com mission and conveyed th eir viewpoint. But no meaningful discussion was held between the auto sector and the government' 's team prior to finalisation of the ADP. Insiders claim that an attempt was made by some of the officials to table the draft ADP 2014-19 in the ECC meeting last month but the Finance Minister Ishaq Dar refused to entertain the summary w ith ou t form al comm ents fr om other ministries. However, no official

PAKISTAN AUTOMOTIVE

w a s a vai la bl e t o c onfir m t h is information. A comparison of the draft ADP 2014-19 tailored in March 2014 and revised recently indicates that zero duty on raw material of auto parts wil l remain. Presently, duty rate on sub components and components is 5 and 10 per cent respectively. In March, proposed tariff on sub components and components was 12.5 per cent for five years. However, in the revised draft policy, 10 per cent duty has been proposed for five years. Duty on sub assembly will remain unchanged at 20 per cent.

Presently, duty on CKD is 32.5 per cent. In March 2014, the government proposed to lower it to 30 per cent but now it has been decided to fix it at 25 per cent for five years. Duty on AMax is 50 per cent. In March 2014 draft policy, the government wanted to revise it to 35 per cent however it has been decided to fix it at 45 per cent in 2014-15, 40 per cent in 2015-16, 35 per cent in 2016-

17, 2017-18 and 2018-19 respectively. All incentives, facilities and tax exemptions available under the SEZ Act shall be available to all Category A investors including 100% exemption from custom duties and taxes on the import of plant, machinery, equipment and tooling such as dies, molds, jigs and fixtures for production, inspection and testing of vehicles. According to the summary, the CBU rates have been retained on all categories of passenger cars to provide a level playing filed to indigenous industry visa-vis regional countries. The EDB claims that this will also encourage new investors to decide to invest in a country where his vehicle is adequately protected against imports. The import duty rate on non localised parts has been lowered to improve indigenous competitiveness. The import duty rate on non localised parts is gradually being lowered so as to provide the industry a predictable road map for doing away with SRO 693(1)/2006 by upgrading technologies and attaining competitiveness. Th e duty s tructure un der 65 5(1)/ 2006(IOR) pertaining to

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Monthly AutoMark International

Presently, the hot issue is on-money on new models of cars. According to local assemblers, investors are making money not the assemblers. Chairman Indus Motors Company, Ali Habib telephoned Minister for Industries and Production, Ghulam Murtaza Jatoi and clarified the company''s position with regard to on-money. concessionary inputs available to auto p a r t s ma n u fa ct u r er s i s be in g rationalised to eliminate mis-declaration a m o ng su b c o m p o ne n t s a n d components. A uniform CBU rate of 50 per cent has been fixed for the two and three wheeler automotive segments to rationalise the tariff structure. The import duty rate on non-local ised components for the assembly of 2&3 wheelers has also been rationalised for the entire segment and fixed at 15 per cent. New descriptions with regard to technology-Euro II & above and below Euro II have been defined in the tariff system for tractors. Presently, tractors manufactured in Pakistan are not Euro II compliant and must gradu ate to Euro II and above technological level to become exp ortable to various countries. A CBU rate of 20 per cent has been maintained on regular buses to provide m anu factu rer s of these veh icles adequate protection against imports. CNG category of buses has been eliminated from the tariff system for buses and zero percent import duty has been fixed on CBU of buses operating on LNG/ CNG as well as HEVs and EVs to promote such vehicles because of environmental considerations and in the wake of non availability of CNG in future. Import of all types of vehicles will be regulated by the following used vehicles import policy 2014-19

(i) No used vehicles older than three years will be imported into Pakistan. (ii)

No used vehicles shall be imported into Pakistan except through personal baggage scheme, transfer of residence sche me and gifts scheme. (iii) one per cent depreciation per month will be allowed to a maximum of 36 per cent irrespective of the country of origin.

(iv) duty for imported vehicles will be paid in dollars by the expatriate importer through banking channel. (v) Federal Board of Revenue (FBR) will issue yearly schedule of import duties of all type of vehicles in dollar terms on June 30, of each year, applicable at least for next six months. (vii) no special relaxation regarding age and applicable duty shall be granted under any circumstances. The ADP envisages two categories of new investment with different incentives according to which category A investors whether an existing OEM or a new entrant in auto sector will be allowed to import 100 per cent parts whether or not locally manufactured, at 10% rate of customs duty for a period of five years f r om t h e s t a r t o f a s s e m b l y /manufacturing operations in respect of passenger cars and LCV subject to progressive manufacturing of 25% every year starting from end of year 2 based on indigenization level of industry as per SRO 693.

All incentives, facilities and tax exemptions available under the SEZ Act shall be available to all Category A investors including 100% exemption from custom duties and taxes on the import of plant, machinery, equipment and tooling such as dies, molds, jigs and fixtures for production, inspection and testing of vehicles on 1 time basis. For Motorcycle Industry "existing policy as approved by the ECC and notified by FBR vide SRO 931 (I)/2013 shall continue".

to import 100% parts, whether or not locally manufactured, at 10% rate of customs duty for a period of two years f r om t h e s t a r t o f a s s e m b l y /manufacturing operations in respect of passenger cars and LCV. The incentives shall not continue after the second year and prevailing tariffs shall apply. They can import 100 per cent parts whether or not local ly manufactured at prevailing custom duty applicable to non localised parts for a period of two years from the start of assembly/manufacturing operations in respect of buses, tractors and prime movers. 100 per cent exemption from customs duties will be allowed on import of tooling, such as dies, molds, jigs and fixtures for production, inspection and testing of vehicles to the extent of new variants only not produced before. The source told this correspondent that work on new ADP began after the ECC constituted the co mmittee on the complaint of Khawaja Asif about onmoney being charge d by the local assemblers. Presently, the hot issue is on-money on new models of cars. According to local assemblers, investors are making money not the assemblers. Chairman Indus Motors Company, Ali Habib telephoned Minister for Industries and Production, Ghulam Murtaza Jatoi and clarified the company''s position with regard to onmoney. Later on, the Minister called this correspondent and quoted Ali Habib as saying that IMC is not charging onmoney but investors and dealers are. He also quoted the chairman IMC as saying that "please identify the dealer involved in charging on-money and let the company know, we will take action against them". The min ister has convened a meeting on auto policy prior to its submission to the ECC. Pakistan Automotive Manufacturers Association (PAMA) has agitated with t he Ministr y of Indu st ries and P rod u ct ion for hol di ng pr op er consultations prior to finalising the auto policy..... Courtesy: Daily Business Recorder

Category -B investors will be allowed

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Automotive Sector - Update

Monthly AutoMark International

312 new CNG buses for Lahore soon

As many as 312 new CNG buses will be plied in the provincial metropolis in order to facilitate common people and in this regard the advertis ement will soon be given in the leadin g newspapers. It was decided in the 46th Board of Directors meeting of Lahore Transport Company held here on Tuesday at Chief Mi nister Secretar iat, u nd er t he chairmanship of Khawaja Ahmad Hassan. It was also decided that public service vehicles under rent a car system will also be regulated in the city in the wake of hassle free transport facilities to the general public. Khawaja Ahmad Hassan said that LTC since its incep tion h ad brough t revolution in the urban public transport

Used cars import thriving The business of used cars import is thriving as 9,569 used vehicles were imported in the first three months of fiscal year 2014-15 as compared to 5,863 units in the same period last year, showing a huge growth of 63 per cent. According to Pakistan Association of Automotive Parts and Accessorie s Manufacturers, though import of used cars is allowed only to Pakistanis living abroad under transfer of residence, personal baggage and gift schemes under import policy order, this policy is being massively abused by used car traders with the support of some customs appraisement officers. In a statement, Siddique Misri, chairman of the association, said despite cut in duty and taxes rates on hybrid vehicles dealers have fail ed to bring down prices. He maintained that despite a huge relief, the price of 1300cc three year-old Honda Insight which was available at Rs 1.5m in January 2013 witnessed an increase of 27pc and was now being sold at Rs1.9m. Similarly, price of three-year-old 1800cc Toyota Prius was increased from Rs1.9m in January 2013 to Rs 2.5 m in September last. He said the prices of non-h yb ri d v eh ic les w er e also increasing. The FBR, he said, should conduct strict audit of dealers as they are making huge profits.-Reporter

and this was the vision of Chief Minister Punjab Mian Muhammad Shahbaz Sharif that modernized transport services in form of Metro Bus and new public buses are being plied on various routes in the city, as a result of these magnificent initiatives benefits are reaching to the common man. Secretary Transport Punjab Shaukat Ali, City Traffic Police Officer Tayyab Hafiz Cheema, Member Punjab Assembly Ramzan Sadique Bhatti, LTC Chief Executive Officer Khawaja Haider Latif, Chief Financial Officer Mariam Khawar, Chief Operating Officer Omer Pirzada, Chief Technical Officer Badiur Rehman and other officials were also present on the occasion....

CCP issues notices to automotive manufacturers The Competition Commission of Pakistan (CCP) has issued show-cause notices to Pa kistan A utomotive Manufacturers Authorised Deal ers As sociatio n (Pamada) and its 44 members for prima facie cartelisation in violation of Section 4 of the Competition Act, 2010. The CCP took suo motu notice of the allegations against the association for fixing rates of automobile repair and paint jobs. Consequent to an inquiry conducted by the commission, a search and inspection of the premises of the association was also carried out under Section 34 of the Act on May 7.

Tractor sales soar

Overall tractor sales remained brisk during the first quarter of current fiscal year rising to 9,363 units from 5 ,059 units in same period last year. Sales of Massey Ferguson and Fiat tractors rose to 6,086 and 3,184 units from 3,281 and 1,714 units while sales of Orient IMT tractor went up to 93 from 64 units, data of Pakistan Automotive Ma nu fac ture rs A ss o ciatio n (Pama)revealed. Overall production of farm machinery has almost doubled in July-September 2014-15 to 11,896 units as compared to 6,419 units in same period last fiscal year. Muhammad Tahir Saeed of Topline Securities attributed rising sales of tractors to government support and improving rural economy. After falling in last few years , he expected tractor sales to grow by 37pc in FY15 and 10pc in FY16. In federal budget FY15, the government announced reduction in General Sales Tax (GST) from 16 to 10pc and increased

agri-credit loan target from Rs380 billion to Rs500bn. Both these measures will provide the much needed growth in tractors sales, he added. Agriculture makes 20pc of Pakistan`s GDP. Consis tent increase in co mmodity support prices (wheat support price doubled in last fiv e years), risin g farmers` education on using modern techniques an d booming remittances (up 166pc in last five years) h ave imp roved bu ying power of farmers. A s ri sing pop ula tion b ase and inheritance has resulte d in lesser available crop area per person, farmers are more concerned on improving yields. In this attempt, farmers are relying more on fertilisers, pesticides and modern equipments. Higher agri-credit, mainly from Zarai Taragiati bank, and rising remittances would also help in rising tractors sales in addition to lower GST and supportive government policies, the analyst said.-Staff Reporter

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Exclusive Article by Owais Khan

Monthly AutoMark

Genuine buyers to wait up to next year for Toyota Corolla IMC had already asked its customers not to pay anything extra demanded by anyone to get a new car and book their orders on partial payments through its authorised dealers for timely delivery. The menace of “premium or on money” has again surfaced with a leading Japanese assembler whose new model has lured the attention of investors. It seems that the investors are getting quick delivery as compared to genuine buyers who have to wait up to April 2015. It is up to the consumers either they should wait for months or get a quick delivery by paying premium or on money on spot selling. The blame for this unlawful practice of charging hefty premium is being put on unathorized dealers who in connivance with the investors are playing this game. But nobody can deny the fact that some authorized dealers are also cashing the situation at their end. The recent inquiry by the Competition Commission of Pakistan (CCP) against the (PAMADA) is fair enough to justify the wrongdoings of authorized dealers. It has been reported in previous years that authorized dealers used to create a situation for impatient new buyers who want to buy the car at any cost. In this game investors were involved who had taken the delivery of new car few days back. As per desire of some cash rich buyers, the authorized dealers had made contacts with the ow ner s of car (investors) and then they negotiated the premium for urgent delivery of cars. Same practice must be going on but the au t h or iz ed d ea ler s d eny th ei r involvement in such game. People, who are booking Toyota Corolla now, will get the delivery in first quarter of 2015 and in some cases in the second quarter. Toyota Corolla GLI automatic will be delivered by April 2015 in case buyers book the car today, while the customers will get GLI manual by March 2015. The delivery time of XLI, which seems not in high demand, is December 2014 while Altis Grande’s time of delivery is March 2015. Authorised dealers said booking is full now for the next two to three months at all the authorised

showrooms. Toyota cars can also be booked at partial payment of Rs500,000. It means that the company will keep the amount for all these months in the banks and earn interest. Due to long delay, the on money on Corolla GLI automatic model ranges between Rs190,000-200,000 while on GLI manual it is Rs100,000. Corolla XLI model attracts premium of Rs50,000 while the on money on Altis Grande is Rs300,000. Premiums also depend on colour of the car. The price of XLI is Rs1.624 million while two models of GLI are available at Rs1.749 million to Rs1.824 million respectively. The price of different models of Altis Grande ranges between Rs2.024 million to Rs2.299 million respectively. Earlier this month the IMC claimed that it had streamlined its production to ensure delivery of cars within committed sch e du l e. In S ept em be r 20 14 , production and sales swelled to 4,463 and 4,358 units as compared to 3,141 and 3,515 units in Aug 2014. IMC had already asked its customers not to pay anything extra demanded by anyone to get a new car and book their orders on partial payments through its authorised dealers for timely delivery. Th e com pany had disp elled an impression of benefiting fro m on money/premium being charged in the market. On the contrary IMC had been the loudest to voice against premium and the first company to offer partial payment bookings.

In such a scenario, what the Ministry of Industries and Production is doing to safeguard the interest of genuine buyers. Last month, as per media reports, Minister for Industries and Production, Ghulam Murtaza Khan Jatoi had taken serious note of up to Rs 250,000 per car 'on money' on new models demanded by Indus Motor Company Limited. On-money on Altis Grande 1,800 CC full option was Rs 300,000, including Rs 50,000 income tax. As per media report, the sources claimed that the company had to deliver 8,000 cars of wh ich 2,00 0 are Alt is G rand e. Jatoi told a print media publication that was continuously receiving complaints from gener a l pu b lic reg ar d ing unprecedented amounts of 'on money' demanded by IMC. "I am taking up the issue with Indus Motor as it is not acceptable to the government to allow any company to charge money over and above the fixed price," he added. According to official documents presented before the Senate Standing Committee headed by Senator Mushahid Ullah Khan, the committee had sought a five-year sale and profit data from M/s Indus Motors but the company had not submitted it so far. The documents further stated that the Engineering Development Board (EDB) had been pursuing the matter with IMC for retrieving the requisite information for a long time. However, the company had stated that the required information was being compil ed and would be available soon. Indus Motor also faced an enquiry last year regarding booking of cars and the CCP served show cause notice to the assembler. However recently the CCP had disposed off the case. (According to w ebsite of CCP)..

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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 Price Honda Aspire Manual 1.3L Rs. 1,652,000 Honda Aspire Prosmatec 1.3L Rs. 1,794,000 Honda City Manual 1300cc Rs. 1,572,500 Honda City Prosmatec 1300cc HYUNDAI Rs. 1,713,500 Honda Civic VTI Manual 1800cc Rs. 2,035,000 Honda Civic VTI Manual SR (Oriel) Rs. 2,267,000 Honda Civic VTI Prosmatec 1800cc Rs. 2,156,000 Honda Civic VTI Prosmatec SR (Oriel) Rs. 2,388,000 Honda CR-Z Sports Hybird Manual Rs. 3,286,000 Honda CR-Z Sports Hybird Automatic Rs. 3,366,000 Advance Withholding Tax For Filer Active For Non-Filer Non-Active Tax Payer Tax Payer City 1.3 L 30,000 City 1.3 L 40,000 City 1.5 L 50,000 City1.5 L Aspire 100,000 Civic 1.8 L 75,000 Civic 1.8 L 150,000 All Variants All Variants

TOYOTA COROLLA

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

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 Petrol

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

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

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

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

Model

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. 1,859,000

Hilux Pickup 4x4 E

Rs. 1,145,000

Dual AC - Power Steering+ Power Window

Price

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

DAIHATSU

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 1,627,500 1,752,500 1,827,500 1,712,500 1,952,500 2,027,500 2,152,500 2,302,500 5,748,500

Hilux Pickup 4x2 sc

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

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

Model

Price

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

TOYOTA VIGO DAIHATSU Model Model

Price Price

Rs. 3,129,500

AL-HAJ FAW MOTORS Price

Model

Vigo Champ-V MT Rs. 3,453,500 FAW Carrier 1000cc (WHITE ,BLACK,STRONG BLUE & SILVER) FAW X-PV 1000cc Std FAW X-PV 1000cc A/c Vigo Champ-G AT Rs. 3,653,500 Sirius S80 1300cc (WHITE ,BLACK,STRONG BLUE & SILVER) Sirius Grand 1500cc

Monthly AutoMark Magazine - International

Rs. Rs. Rs. Rs. Rs.

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

Price updated December- 2014

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MADE IN PAKISTAN MOTORCYCLES RETAIL PRICE LIST

70cc Motorcycle Sr./ No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

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. Brand &Model Name 1. Honda Pridor 2. Super Star SS-100 3. Super Power SP-100 4. Road Price Jackpot 110cc 5. United US-100 Euro 2 6. 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 Price update: Sep-2014 www.automark.pk | Nov-2014 | Page 00

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November-2014

Exclusive Article by Muhammad Yousuf Shaikh Chairman PCMIC International investment conference 2014

Pakistan China Motorcycle Industry Council (PCMIC) participated the International Investment conference to highlight FDI particularly from China in the Pakistan’s fastest growing motorcycle trade & industry. PCMIC proposed BOI to jointly organize the first “Pakistan International Motorcycle Expo” & investment conference. PCMIC congratulate Chairman BOI, Dr. Miftah Ismail and Honorable Mian Nawaz Sharif sahib, Prime Minister Pakistan to organiz e the leading” International investment conference 2014” on October 27,2014 – at Sareena h ot el I sla m ab d . Th is i s m os t constructive and appreciated event for business community of Pakistan and the world. We thanks Prime Minister & Chairman BOI for their invitation to PCMIC to participate “International investment confer ence 2014” to represent the Pakis tan Mo torcycle Industry. This is great success toward rapid industrialization and to encourage FDI in Pakistan. Prime Ministe r Nawaz Sharif was inaugurate the conference while various federal ministers will b rief th e p a r t i c i p an t s a b ou t e no r m o u s opportunities available in the country. Finance Minister Ishaq Dar, Minister for Water and Power, Khawaja Asif, Minister for Petroleum, Shahid Khaqan Abbas si, Min is te r for Commerce, Khurram Dastgir, Minister for Planning Ahsan Iqbal and senior officers from public sector and professionals from private sectors would address the gathering to highlight the country's investment potential. the conference was scheduled after business as sociatio ns of Pakis tan showed great concern at the falling trend in Foreign Direct Investment (FDI) as it fell by 26 percent during the first quarter of current financial year. They called on the government to take urgent

automark magazine

measures to improve FDI inflows. Dy Director (China) Investor Relations Mr. Riazul Haq of Board of Investment (BOI) welcomed the Chairman Pakistan China Motorcycl e Industry Council (PCMIC) and thanked him for visiting BOI investment conference on his invitation. He expressed hope that the visit of the Chairman-PCMIC would go a long way in enhancing the Motorcycle trade & industry relations and economic cooperation in the Pakistan. “It was indeed a pleasure and privilege to host you and we hope that you had an informative meeting with us” at BOI conference Mr. Riazul Haq praise Chairman PCMIC. He stated that we certainly hope we can have more meetings in the future for the prosperity of Pakistan China Motorcycle Industry Council. The Chairman PCMIC further stated that Pakistan is a very big market consisting of 180 million peoples and also provides Motorcycle Industry investors the market access to many other Asian countries. As many as 450 foreign and local investors h ave confi rmed t heir participation to the Board of Investment (BoI) for the two-day International Investment Conference was scheduled for Monday-Tuesday (October 27-28). Federal government was arranged a two-day International Investment Conference with the objectiv e of highlighting the available opportunities

for investment in various sectors of the country's economy. The conference is being organised by BoI. Board of Investment (BoI) Chairman Dr Miftah Ismail told that around 165 foreign delegates, heads of multinational companies and 200 local businessmen have indicated they will participate in the investment conference. "The board has received overwhelming response from investors - both foreign and local," he added. Around 450 guests would attend the conference who wil l be briefed about the investment potential particularly in energy sector. Pakistan has held four international conferences on trade and investment in the past one year. One conference was held in Dubai and the other in the UK. Joint c onferences on trade and investment were held in Pakistan with Ko re an a nd Ba h r ai n b us in ess associations and bodies. "This however is the first conference which will focus on investment,", investors from China, Saudi Arabia, Qatar, Bahrain, Australia, Russia and other countries confirmed their participation and guests would start arriving in the capital on Sunday. all the delegations are from private sector as the invitation was sent only to private businesses. The conference were continue for two days with discussions on energy, oil and gas, privatisation, roads and infrastructure, agriculture and livestock, mining and minerals as well as success stories from existing investors i n vari ou s sectors.....

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

Exclusive Review by David McMullan

Cheap Cars – A Factor for China’s

Motorcycle Industry Downturn

In recent months. I’ve written a lot about the contributing factors for the slight downturn of the Chinese motorcycle industry, mainly concentrating on the ban on motorcycles in Chinese urban centers and the threat from the Indian industry. But there is another factor to the downturn – cheap Chinese cars! Three years ago I wrote about the way t h at C h ines e m ot or cy cl es h ad revolutionized the agricultural industries in many developing nations. In the past, horses, oxen, mules and other beasts of burden were invaluable for agrarian families in many countries. These animals played a key role in plowing farmland, fetching water and transporting crops from fields to the threshing floor. Carriages and oxcarts were the major transportation vehicles in the rural areas until the invasion of cheap Chinese motorcycles changed everything. Cheap Chinese motorcycles have helped to mechanize small agricultural farms and with it play a big part in the

development and improvement of crop and livestock transport, one villager in Chile remembers “riding a motorcycle to visit relatives and friends, driving a tricycle to transport farm produce and goods for crops growing and cropland plowing. The other benefits enjoyed were that villagers could travel easily to other villages and find love! Chinese motorcycles brought a whole new way of life to rural areas and opened up many new avenues for trade and leisure. “The irony of this phenomenon is that the Chinese motorcycles had helped agrarian workers to make more money, to start turning a profit rather than just growing to exist. Mechanized farmers could grow a surplus and then transport the surplus to market on the tricycles which had replaced their motorcycles. No w the automotive evolution has continued and many farmers now have Ch i ne se c ar s a nd m in i-v a ns.” Three years ago I spoke to Bolivian teacher and motorcycle safety instructor Diego Torres about the automation of the rural areas in Bolivia. He commented then “In the wilds of

Bolivia getting their prized agricultural produce to market meant that someone had to carry a giant basket on a backbreaking, day long trek through narrow mountain trails. That is now changing, thanks in large part to Chinese motorcycles”. Fast forward 3 years and it’s a different story. Diego reports” the change to Chinese cars has happened so rapidly and is due to a few different factors.

An important factor is that the quality of the country roads is improving year to tear. In the past it would have been difficult for anything other than a motorcycle or a Range Rover to transport goods, now the roads have improved to the level that family cars can comfortably use them. Also, the surplus money, some of which was produced due to the usefulness of Chinese motorcycles has enabled farmers a better standard of living with a greater disposable income. Add to this the influx of very cheap Chinese cars and you have a situation

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

continued on page 35

Monthly AutoMark International

But there is another factor to the downturn – cheap Chinese cars! Three years ago I wrote about the way that Chinese motorcycles had revolutionized the agricultural industries in many developing nations. In the past, horses, oxen, mules and other beasts of burden were invaluable for agrarian families in many countries. where agricultural workers are now saving to buy cars and keeping their bikes as a secondary means of transport, which basically means it is not necessary for them to update them.” In Mongolia which has a legendary h istor y of h orse tr avel Ch inese motorcycles had been the main replacement for the nag, until now. Motorcycle importer Erdene Jagar of Ulan Bator commented “you can now get a hire-purchase agreement with the bank when opting to buy a Chinese car, this was originally set up to enable the poorer farmers to buy motorcycles but now they’ve tak en a step up the au tom otive evol uti onary ch ain. “They have been a revolution for these guys who can now trade at much further distances than before. Mongolia is the most unpopulated country on earth per square mile so traveling for trade has always been a difficult business. Not so now due to the affor dability of cars al though sales of motorcycles (mainly Chinese) have taken a bit of a hit.”

As of 2012 exports of Chinese automobiles were about 1 million vehicles per year and rapidly increasing compared to China’s motorcycle export figures which have dipped under 10 million and are decreasing. Like the motorcycle export industry most sales were made to emerging economies such as Algeria, Brazil, Chile, Egypt, Iraq, Iran, Russia,

Saudi Arabia, South Africa, or Syria where a Chinese-made car (such as a BYD, Dongfeng Motor, FAW Gr o u p, SA IC Mo to r , L i fan, Chang’an (Chana), Geely, Chery, Hafei, Jianghuai (JAC) or Great Wall) sells for about half of what a equivalent model manufactured by a international brand such as Honda or Ford does. The Chinese cars are based on modern designs but economically made and they are chiefly lacking in safety and performance features. Cars made in China by international joint ventures such as Chang’an Ford are normally not exported. Mu ch the same as th e Ch inese motorcy cle industry the quality of Chinese cars is rapidly increasing but according to a report conducted by J. D. Power and Associates they are not predicted to reach parity with traditional multinational producers until at least 2018. So m e C h in es e mo to rc ycle manufacturers have been producing cars for many years and others are either just new to the market or have future plans to expand in to automobiles. Of all the motorcycle companies in China, Lifan have developed the most successful cars, trucks and mini-vans with a yearly production ability of 300000 units. At a recent expo I saw that Loncin had produced a mini-van (which looked just like an old Bedford Rascal) and there are rep orts of other motorcycle manufacturers following the trend. One motorcycle manufacturing trend that has been followed is that of ‘cloning’ other models. At Canton Fair three years ago I was astonished to see a Mini

Some Chinese motorcycle manufacturers have been producing cars for many years and others are either just new to the market or have future plans to expand in to automobiles. Of all the motorcycle companies in China, Lifan have developed the most successful cars, trucks and mini-vans with a yearly production ability of 300000 units. At a recent expo I saw that Loncin had produced a mini-van (which looked just like an old Bedford Rascal) and there are reports of other motorcycle manufacturers following the trend. One motorcycle manufacturing trend that has been followed is that of ‘cloning’ other models

Cooper on the Lifan motorcycle stand. On closer inspection the vehicle turned out not to be a Mini at all but a very similar design. Only yesterday (at time of writing) I noticed a Chang’an car which was a dead ringer for a Range Rover “Evoque.” The automobile phenomenon has h ow ev er ca u sed m oto rc yc le manufacturers to look more at the leisure markets triggering an increase i n sp e nd i ng on r es ea rc h a nd developme nt, original design and marketing. Dav e McMullan, an international Ultimate MotorCycling correspondent who reports exclusively on the Chinese motorcycle industry, can be reached at en gl ish m a ninc h in a@ gm a il .com . Also, visit his website at www.chinamotorcyclenews.com

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

International Automotive Industry - Update

Akzo Nobel begins operations at vehicle refinishes plant In Changzhou, China

In terms of global sales Toyota, the Japanese carmaker has kept its lead over the German manufacturer Volkswagen an d American auto giant Ge neral Motors. Toyota Motor Corp said that it had sold 7.615 million vehicles around the world, up nearly 2.8 per cent from the previous year. Toyota also finished first last year with a record sales of 9.98 million units while General Motors finished second followed by Volkswagen AG at third position. Further for the second spot, Volkswagen barely edging GM with the sales of 7.4 mil lion vehicles from Jan uary to September as compared to 7.37 million from the Detroit based automaker. Toyota, pumping hard on the sales to create a record in automobile industry, is projecting its annual sales stand at 10.2 million units. An interesting fun fact for our readersin terms of global sales, General Motors stayed on the top spot for more than 7 decades (77 years to be exact!) before losing the title to Toyota in 2008. Even after issuing 30 million recalls over faulty parts, GM has maintained its strong presence in the automo bile industry globally. President Akio Toyoda told shareholders that the company was “advancing into uncharted territory” in the annual report. The company recently crossed 7 million unit mark for hybrid sales in the first nine months of the on-going year. Currently, the manufacturer sells one plug-in hybrid and 27 hybrid models in more than 90 countries across the globe.

Dutch paints maker Akzo Nobel NV (AKZOY.PK, AKZOY) said it has started operations at its state-of-the-art vehicle refinishes plant in Changzhou, China, the company's 30th manufacturing facility in the country. The new factory adds around 25 million liters of capacity for Sikkens, Lesonal and Prime vehicle refinishes products. It al so stre ngthens the co mpan y's position as one of the leading players in Ch ina ' s veh ic le r efini sh es and co mmercial vehicle OEM markets, building on its acquisition of Changzhou Prime A utomotiv e Ltd . in 2010. "The Changzhou site is designed to help us meet rapidly increasing customer demand, not only from domestic suppliers, but also from our global automotive customers that have business in China," explained Simon P ar ker , M ana g ing Di re ct or of AkzoN ob el's V eh ic le Refinish es business...

2015 Yamaha YZF-R3 First Look Yamaha has confirmed its 2015 YZF-R3 will debut in the 2015 US model line. Po wered by a liquid-cooled 321 cc Parallel Twin, the R3 will retail for $4990 and be available at US dealers in January. The R3 builds off the R25 design, which Yamaha debuted at the 2013 Tokyo Motor Show, bumping displacement up from 249 to 321cc. Engineers achieved the 72cc increase by boring out the cylinders to 68mm (from 60mm), with an identical 44.1mm stroke. The engine is liquid-cooled and fuel injected, with DOHC fo ur -va lve p er cyl ind er valvetrain. The R3 sports a six-speed transmission. A diamond-type steel frame cradles the R3 engine, with the swingarm also steel. KY B p ro vi d es th e su s p ens io n components, with a 41mm fork and single shock delivering a respective 5.1 and 4.9 inches of travel. Braking consists of a floating 298mm rotor and twopiston caliper up front and 220mm rear.

Dongfeng Nissan plant in Dalian, China commences production The Dalian plant of Dongfeng Nissan Passenger Vehicle Company (DFL-PV) commenced production On October 18. In addition to the existing production bases in Huad u of Gu angzh ou , Xiangyang and Zhengzhou, the Nissan cars produced in China – all of which are for the domestic market – offline from a total of four locations across the country. DFL-PV is a business unit of Dongfeng Motor Co, Ltd. (DFL), Nissan's joint venture with Dongfeng Motor Group Co. DFL-PV is engaged in research and development operations, manufacturing and distribution of passenger vehicles. With a gross floor area of 1.32 million square metres, the Dalian plant is being developed in two phases. The investment for the first phase totals RMB 5 billion (Rs 5,015 crore), for an initial production capacity of 150,000 units per year. Upon completion of the second phase, the total capacity will expand to 300,000 units per year.

Trevor Mann, Chief Performance Officer of Nissan Motor Co (NML), spoke at the Start-of-Production Ceremony. "The Dal ian plant is a statement of our commitment to China and our efforts to continue delivering high-quality pr od uc ts to Chinese consum er s nationwide. The manufacturing technology, quality and eco standard of the construction of the Dalian plant are aligned with the global standards of Nissan, while the factory management comes from existing Chinese plants. This plant will strengthen our competitiveness in China, which is the world's largest automotive market." The Dalian plant rep resents DFL-PV's footh old in Northern China. Together with the Huadu (first and second) plants in Southern Ch ina, Xian gyang and Zhengzhou plants in Central China, DFL-PV says it is well positioned to provide vehicles throughout the country.

www.automark.pk | November-2014 | Page 42

Monthly AutoMark International

Exclusive Review by S.M.Ahsan

AN INTRODUCTION TO AUTO ”PARTS MANAGEMENT” (First Edition) For success in marketing of CBUs (Complete Buying Units), PARTS play crucial role. In fact, the three pillars mandatory for effective launching and thereafter successful running of Units operations are: • SALES (S1) • SERVICE (S2) • SPARES (S3) Also known as 3-S operations, these are key and integrated activities for the entrepreneurs engaged in the business of Automo tive Vehicles and al lied Equipment. This comes under the category of ‘Aftersales Support’. The three aspects of Automotive business are interdependent. There is a wellknown adage: “The first Vehicle is sold by Sales Department (S1) and the rest sold by Parts Department (S3)”. In a way, it is true. Availability of Parts ensures customers confidence and encourages and creates desire in him/her to own the vehicle.Even S2 operation is also dependent on effective availability of Service and Maintenance Parts at al l locations adjace nt to company's Service centers. Service Department contributes in boosting Parts off take and profitability through professional advice to the clients for ch an ging the worn out Parts/assemblies.The three departments work hand in hand.

PARTS AVAILABILITY In today’s working environment and highly competitive nature of business,’ Optimized Availability’ of Parts is essential. The facility generally used to measure 'customer Satisfaction' to the extent as Support in Parts are measured by availability of Parts in:

1. Right ‘Qty’ 2. Right ‘Time’ 3. Right ‘Price’ This is a bare fact and is to be in line with potential client's convenience and

conditioned Parts are i m p or te d f ro m abroad or procured from placed where accidented Vehicle are left for disposal. These too, are as g ood a s G enuine Parts but repaired to S.M.Ahsan r em o v e minor damages in the assembly for fitment. aspirations ,to make Parts (at least ‘Fast Moving’) avail able to customers places/doorsteps, at most reasonable prices at all times. We can observe the success story of well-known brands viz Toyota, Honda, Suzuki Passenger cars in our own country. Their Parts are avail able throughout Pakistan from Karachi to Peshawar, Quetta to Lahore. Even in rural areas , there are Parts outlet availabl e, nearer to th e points of consumption everywhere in the country.

TYPE OF PARTS As a natural consequence and for customers priorities, various types of Parts are available in the market to meet th eir Purc hasin g power, nam ely • Genuine Parts (source : CBU manufacturers and their authorized Agents) • Imitation Parts/Copy Parts (source: Replacement Parts Market) • Used Parts (source: Scrap yard/Old Parts Stores) Each segment has its own advantages and disadvantages. Parts supplied by Vehicle Manufacturers/Distributors guarantee that they are same as used in assembly line in the factory where the vehicles are produced. Imitation Parts,as the name implies, are the Copy of the Original Parts made by local Workshops. Their long term performance is not guaranteed but these are available in lucrative prices. ‘Used Parts’ or Re-

PARTS MARKETING STRATEGY T he m ain slog an now u sed for a d v e r t i se m en t i s CU S T OM E R DELIGHT instead of ‘Cu stomer Sa tisfaction’. Th e ow ner or the Distributors endeavor to give ‘Delight’ to the Product Users through Parts services. This Delight is realized through, besides reasonable Price, the built in facilities, co sy showrooms, the air conditioned environment, the easy Payment terms, simple ord ering procedure and Collection of required Parts/components and return of unused Parts etc. To be continued.... About the Author S.M.Ahsan is a BE in Mechanical Engineering Graduate with PGD in Business Administration (from IBA, Karachi University ) and has had the working experience for 36 years in Manufacturing and Sales/Marketing of Technical Products. Last assignment was for 22 years as Country Parts Manager in Muscat, Oman ,at OMASCO, a subsidiary of Al-Futtaim Group of Companies/Conglomerate of UAE in sale and distribution of HONDA,HINO,YANMAR brand of Products. During this period , he has traveled extensively and participated in many Conferences and seminars and workshops with suppliers team.

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

Monthly AutoMark International

18m vehicles likely on Saudi roads by year-end Eighteen million licensed vehicles are likely to be on Saudi roads by the end of this year, from 17 million last year, according to a study published by AlEqtisadiah daily. The number of licensed cars rose by 7 percent from 2011 to 2012, to 15.9 million vehicles, it said. This was a rise of 975,000 cars from the 14.9 million in 2011. About 81 percent of the registered vehicles in 2012 were in the three major provinces of Makkah, Riyadh and the Eastern Province. Makkah province registered 5.1 million vehicles accounting for 32 percent of the total of 12.8 million vehicl es registered in the three provinces in that year. Riyadh province followed with 4.8 million registered vehicles accounting for 30 percent of the total vehicles registered followed by the Eastern Province with more than 3 million vehicles accounting for 19 percent of all registered vehicles, the report said. The country’s traders paid SR356 billion to import cars over the past six years. The cost of imports rose 3 percent from SR77 billion in 2012 to SR79 billion last year, according to the study. The study stated that SR53.8 million worth of cars were imported in 2008, falling 22 percent to SR41.9 billion in 2009, attributed largely to the global financial crisis. However, it increased 22 percent in 2010 to SR51 billion, then SR53.7 billion in 2011 and R76.6 billion in 2012...

Toyota airbag recall update for November, 2014 This is a quick update for the Toyota airbag recall in early November, 2014. This brand might not be the largest name within the list of automakers making up cars recalled for faulty Takata airbags, but they have made some controvers ial statements in regard to how far they will go to fix cars involved in the 2014 Takata airbag recall. You have most likely seen the early numbers for this recall that involved not only Toyota, but also GM, Nissan, Honda, and other big names. The Takata airbag recall list was expanded to just under 8-million fairly quickly towards the end of October, although some doubt the real international reach is known...

Toyota sells seven million Hybrid cars worldwide Toyota Prius Plus: Comes to the market in 2015

Toyota has increased its global sales of hybrid vehicles to over seven million units as of Sept. 30, 2014, reaching 7.053 million units. This latest million-unit milestone was achieved in the fastest time yet for Toyota, taking just nine months. “To have achieved this latest millionunit milestone in just nine months is truly a remarkable accomplishment and und erscores Toyota’ s u ndeniable leadership in hybrid technology,” said Adel Muhammad Ezzat, managing director of Marketing at Abdul Latif Jameel Compan y (ALJ) , the sole authorized distributor of Toyota brands in Saudi Arabia, As of this mo nth, Toyota sells 27 different hybrid passenger car models and one plug-in hybrid model in more

than 90 countries and regions. In 2015, Toyota is planning launches of a total of 15 new hybrid vehicles Toyota will continue augmenting its hybrid lineup and increasing the number of countries and regions where it sells hybrid vehicles. Toyota calculates that as of September 30, Toyota hybrid vehicles have resulted in around 49 million fewer tons of CO2 emissions— believed to be a cause of global warming— than would have been emitted by gasoline-powered vehicles of similar size and driving performance. Toyota also estimates that its hybrid vehicles have saved around 18 million kiloliters of gasoline compared to the amount used by gasoline-powered vehicles of similar sizes....

Suzuki working on a new 1.5-litre engine for Indian market Suzuki, the Japanese auto maker, seems busy in developing a new 1.5-litre four cylinder engine for the Indian auto m a rk et . S ou r c es c lo se t o t h e development process have hinted that the auto maker had already designed an 800 cc diesel engine, which Maruti is anticipated to start using soon. Reportedly, this engine is developed on a modular platform, and therefore there are multiple derivatives of it are expected. Along the 800 cc engine, the auto maker is developing two derivatives of a four-cylinder engine, namely a 1.5litre one for India and a 1.6-litre variant for Europe. Experts believe that these derivatives are differentiated as Indian government levies higher excise duty on cars having engine bigger than 1.5-litre.

A company insider told ET, "This new engine is expected to complement the existing Fiat multi-jet engine and will not replace it. The aim is to offer wider choice to the customers. The first probable product (with the new diesel engine) is expected to the nextgeneration Ertiga, even the future SUV and a new MPV is expected to be powered by this 1.5-litre engine.” W ith th e d evel opm ent of new technologies, the diesel cars are expected to ex emp t the sh ortcomings on refinement under the review of petrolpowered versions. Also, diesel offers a better fuel economy, which happens to be a major consideration for Indian buyers....

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

Investment feast - Update

Monthly AutoMark International

Pakistan wins investment worth $42b in China P

remier Nawaz, who already returned from China, had met China’s President Xi Jinping and Premier Li Keqiang at the Great Hall of the People in the Chinese capital. He told President Xi that his country would “continue to resolutely fight the East Turkestan Islamic Movement terrorist forces”, China’s foreign ministry said in a statement following the meetings in Beijing. According to APP, matters of mutual interest, including energy, economic relations and regional situation came up for discussion during the prime minister’s meetings with the Chinese leadership. He said Pakistan-China friendship enjoyed across-the-board political, institutional and popular support in Pakistan. He stressed that his visit would further strengthen the bilateral relations between the two countries. The Chinese leaders reiterated a desire to continue to support Pakistan in developing economy and maintaining stability, since China and Pakistan were ‘iron friends’ and all-weather partners of strategic cooperation. They stated that they would create a green channel for tim ely r elease of funds for development projects initiated by China in Pakistan.

Investment bonanza During Nawaz’s trip, the two countries si g ned 19 a gr e em ent s a nd memorandums of understanding mainly on projects relating to China-Pakistan Economic Corridor and electricity generation. The prime ministers of the two countries oversaw the signing of the agreements that pave way for Chinese state-owned companies to help build at leas t four new power stations in Pakistan, while the deals also cover the supply and mining of coal, the prime minister’s press office said.

“The deals being signed between China and

Pakistan are worth $42 billion. The whole investment is being made by China,” said Amir Zamir, the spokesman for Pakistan’s ministry of planning and development. “There is no loan or aid for the energy projects, but pure investment by the Chinese,” he told AFP. The deals in clude Economic and Technical Cooperation Agreement; Framework Agreement on Provision of Conce ssional Loan; CPEC Energy Projects Cooperation; Government Conce ssional Loan Agreement on Construction of Cross-Border Optical Fiber Cable System between China and Pakistan for International Connectivity of Voice/Data Traffic Project; and Framework Facility Agreement on SukiKinari hydropower project between China EXIM Bank and Suki-Kinari hydropower project. The two sides also signed an MoU on the outline of the Long-Term Plan of CP E C , C a p a c i t y B u i l d i n g f or Development of CPEC between NDRC of China and Ministry of Planning, Development and Reform of Pakistan,

minutes of the 3rd JC C of ChinaPakistan Economic Corridor, Surface Mine in Block-II of Thar coalfield and the Engro Thar 2x330MW coal-fired power plant. The two countries also signed the Memorandum of Facilitation Agreement on Muzaffargarh 660MW coal-fired power pro ject between CME C and Government of Punjab, Pakistan, MOA relating to development of 2x660MW coal-fired power project at Qadarabad, Sahiwal, 99MW UEP power project EPC Framework Agreement, Quaid-e-Azam Solar Energy Park 900MW solar power station project between ZTE Energy and Government of Punjab, Implement Agreement on Dawood 50MW wind farm between Hydro China Corporation and AEDB Pakistan, EPC Agreement of 6.5 Mt/a open pit mine in Thar Block I, Coal Supply Contract under the Project of Integrated Mine Mouth Coal Power Plant in Thar Block I and MoU for Development of Thermal Power Assets in Pakistan. Pakistan and China also signed Framework Agreement on Ruyi-Masood Textile Industrial Park and 2 x 135MW self-generation coal-fired power plant between Industrial & Commercial Bank of China (ICBC) and Ruyi-Masood Textile Company of Pakistan and MoU on coal-fired power plant in Port Qasim.

www.automark.pk | October-2014 | Page 45

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