Automark Magazine March 2011

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Editorial

MONTHLY

The Magazine for Paki stan Automotive Sector

March 2011 Vol 4, Issue 03 Editor : M. Hanif Memon Sub Editor : Dr. Raja Irfan Sabir Contribution Writers : Syed Mansoor Ali Raja Irfan Sabir Shahzad Tabish Ali Hassan Mohammad Owais Khan Omar Rashdi Muneeb Jawed Advisor : Imtiaz Rastgar Abdul Majeed Sheikh Syed Mansoor Ali IHT Farooqui J. Pereira Circulation Manager : Abdul Khaliq Designed By : Mustafa Hanif

Important Announcement The management of the monthly Automark magazine is pleased to announce that Engr.

Syed Mansoor Ali Rizvi has joined the Automark advisory panel from March-2011.

He will be an advisor for the agricultural section of the Automark magazine. Mr. Rizvi completed his B. Sc. in Agricultural Engineering ,1984 from University of Agriculture, Faisalabad. In 1987 he completed a diploma in Manufacturing Technology from IB Vocational Training Center of the Federal Republic of Germany. In addition to having worked in the industry for over 25 years in the marketing, service and field testing of agricultural machines, he has also completed various courses in Business and Project Management from Northern Alberta Institute of Technology (NAIT), Canada. Currently, he is pursuing a Masters in Administrative Science from University of Karachi.

Mr. Rizvi’s core area of expertise is energy conservation in agriculture.

He has conducted many energy audits and retrofits on tractors and tube-wells in order to evaluate energy savings and economic benefits from the retrofits. He is a co-author of the book titled Fundamentals of Tractor Mechanics and Energy Conservation (1998), printed by National Book Foundation. In addition, he has also produced several valuable fact sheets for end-users for facilitating the optimum use of their tractors.

In the past, he has worked for Allied Engineering & Services Ltd., RCG/Hagler & Bailly, Inc. (USAID Project), Khyber Tractors (Pvt.) Ltd., and Al-Ghazi Tractors. He is presently working as Business Manager for CaseNewHolland (CNH) in Pakistan where his role is to support CNH agricultural and Construction equipment brands in Pakistan.

As an advisor for Automark, the lead publication of the Pakistan automotive sector, he will make contributions to further improve the quality of our publications and bring it at par with other international magazines of the automotive industry.

Agriculture sector needs to be modernized Pakistan, being an agriculture-based country, needs to utilize its full potential in the agriculture sector by shifting its focus from conventional agriculture methodology to modern farming techniques. The government should focus on increasing its exports in the agriculture sector through research and developing more varieties of agriculture produce.

Pakistan has vast areas of cultivated land but due to conventional way of farming and lack of know-how of modern technology and sowing methods, Pakistan is still unable to increase its per yield production, which is also the lowest in the region. Our country greatly relies on agriculture, thus modernization and diversification of crops is very much needed in this sector to get optimum results and increase exports.

New varieties of seeds should be developed and keeping in view the internal requirements, agriculture research institutes must provide guidance to the farmer for cultivating crops in demand in the other countries. Growers also pay attention to unseasonal agriculture produce because it would provide them good opportunities of exporting these commodities to other countries along with meeting domestic needs. Demand for organic food is increasing worldwide; therefore Pakistan can fetch a good market share by paying more attention to organic agriculture.

The people particularly in Europe are very much health conscious and pay more for organic food.

International agriculture experts must be invited to find ways and means for increasing per yield production and developing new varieties for fruits and vegetables.

Also farmers must be educated on growing techn iq ues to ge t o p timu m p ro du ctio n .

Agriculture research institutes should also introduce techniques to farmers for increasing shelf life of perishable items because currently a large portion of vegetables and fruits are wasted due to unavailability of preservation methodology.

Postal Address Active Communications D-68, Block-9, Clifton,Karachi Visit us: www.automark.pk E-mail: magazine@automark.pk automarkpk@gmail.com Tel/Fax : 021-32218526 Mobile: 0321-2203815

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CONTENTS The Mo nthly Magazine for Pakistan Automotive Sector

e-magazine Issue at our website

visit: www.automark.pk

Your trust is our success

Valuation of motorcycle parts of China origin Exclusive Report on Auto Sector Meeting

by Ali Hassan

09-10

Pakistan needs massive changes in Seed Sector Exclusive Article by Syed Mansoor Ali

11-14

Increase in age limit of used cars fails to provide any benefit to car buyers Cover Story by M. Owais Khan

15-16

Wrong policies in the auto sector causing huge revenue losses Exclusive Article on Auto Sector by Ali Hassan

17-18

The Electric Scooter Exclusive Article by Shahzad Tabish from NED-Karachi

24-25

Zardari invites Japan’s to invest in Pakistan

27

Honda Insight Hybrid Car

by Muneeb Jawed from NED -Karachi

33

China and the Challenge of Environmental Degradation Exclusive Review by Irfan Sabir from China

34-36

Vehicle Emission Control Exclusive Article by Omar Rashdi

36-37

Federal Secretary visits at SDC Islamabad - PR

40

Local assembled car price list Indus Motors CEO - Interview

41 43

Rastgar Launched Backhoe in Hyderabad

45

Workshop - Energy Conservation & Safety Standards

46

Launching Ceremony of Dutro Jr. and Gb bus at Hino Karachi

47

The only ONLINE automotive magazine in Pakistan

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Exclusive Report on Motorcycle Valuation meeting

by Ali Hassan

Valuation of motorcycle parts of China origin Japanese and Chinese bike makers again indulge in blame game cars $1.80/kg and they don't want to allow motorcycle spare parts importers to import motorcycle spare parts at $1.20/kg why? Because motorcycle is being utilized by poor people of Pakistan and cars are being used by rich society.

As new budget draws near, it is really high time for many established business houses and developing industries to present a negative and positive picture of each other before the government in the pre-budget meeting or in other forums to crush their opponents by getting better incentives.

Like past practice, a leading Japanese bike assembler has again alleged Chinese bike makers for procuring parts from China at lower prices.

In this connection, the Directorate General of Customs Valuation, Custom House Karachi called a meeting for refixation of Valuation of Motorcycle Parts of China Origin on February 26, 2011 in the office of the additional director valuation at Customs House Karachi.

In the meeting the additional director informed the participants that Atlas Honda complained that the Chinese affiliated assemblers importing spare parts for Assembly at $1.20/kg which is lower side. The participants informed the additional director that the car commercial importers are bringing spare parts for 1,300cc and above at $1.80/kg and the value of 1,300cc cars is more than Rs 1.5 million and the value of Chinese affiliated Motorcycle is Rs just 38,000.

Car is being used by one person and the same value amount motorcycles are using by a huge population. Customs valuation allowed car spare parts importers to import parts of different

In case the Government increases the value of motorcycle spare parts imported from China of $1.20 to $1.50 then it will be very higher side and it may encourage people to indulge in wrong business practice instead of importing parts through legal channel by paying taxes and duties to the national kitty.

Chinese bike makers say that actually the big assemblers of Pakistan are misusing the manufacturing.

They are also getting relief through IORC (Input Output Ratio Certificate) through Engineering Development Board (EDB) and seek relief for valuation of motorcycle spare parts imported from

AUTOMARK | March-2011 09

China for higher side. They are importing same parts from China through IORC and paying zero per cent duty, five per cent, and 10 per cent and the Chinese affiliated assemblers are importing these parts at 47.5 per cent while commercial importers pay 50 per cent custom duty on these parts.

For example if Ch in ese affil iated assemblers or a commercial trader import motorcycle shock absorbers from China then they pay more than Rupees One thousand custom duty and other taxes and the same parts imported by any vendor in loose condition pay only five per cent or 10 per cent custom duty through IORC. It means they pay less than Rupees One Hundred custom duty and other taxes to the Government.

The value of shock absorber is same for both the importers but IORC supports vendors who are main suppliers to Atlas Honda and some other big assemblers.

In response to February 26 meeting the Association of Pakistan Motorcycle and Rickshaw A ssemblers Ch airm an Muhammad Sabir Shaikh explained some points to Customs Valuation officials verbally but later submitted a detailed paper to keep the record straight.

He was of the view that notice regarding the February 26 meeting given by the Valuation Department in a very short time/notice and it did not contain the agenda of meeting neither any working paper was enclosed.

In the meeting it came to knowledge that Valuation Department would like to act on FTO order/directions and the participants were informed by the Department for enhancing the scope beyond FTO directions.

The meeting selected 22 items plus for revisiting valuation but the notice did not contain any information about it.

The last valuation advises/rulings were based on market visit by your staff.

Before reaching any decis io n the Department should carry out market visit to reach at current conclusion.

The representatives of Atlas Honda and

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Exclusive Report on Motorcycle Valuation meeting

by Ali Hassan

The representatives of Atlas Honda and their venders/suppliers had misguided the Department about prices of the Chinese items by giving the Japan origin prices of these items, and they don’t want to fix Japan Origin and Fareast prices. If the Valuation Department wants to include their remarks for Chinese origin parts then it must release three types of valuation ruling (China, Fareast, Japan). their venders/suppliers had misguided the Department about prices of the Chinese items by giving the Japan origin prices of these items, and they don’t want to fix Japan Origin and Fareast prices. If the Valuation Department wants to include their remarks for Chinese origin parts then it must release three types of valuation ruling (China, Fareast, Japan).

It was also pointed out in the meeting that differences of prices in imports between Japanese assemblers have huge difference for which the Valuation Department accepted that it was because of over invoicing.

Sabir said the Association stressed that action should also be taken against these culprits because for misusing the Country’s Foreign Exchange Reserves.

Since the Department is valuing the Chinese origins items therefore only those stakeholders should be called who are importing the Chinese origin goods as they are real stakeholders.

Sabir informed the meeting that in 2009-10 the Pakistani Assemblers affiliated with Chinese firms produced 885,422 units and Two Japan ese (Honda and Suzuki) assemblers produced 501578 units.

As regards matter discussed in the meeting regarding base price of raw materials and example was given for LAYS CHIPS and Ordinary CHIPS with reference to Potato prices. APMA chief drew the attention when a person goes in the grocery markets he will find different prices of potatoes and different quality of potatoes.

Further it was discussed regarding prices of parts of Cars which is valued at $1.8 per kg for commercial market upon valuation of motorcycles parts it is also be considered along with this exercise oth erwise entire exe rcis e will be discriminatory and biased.

As regards non implementation of valuation advices/ruling he pointed out that some of them were specific to the c ons ig nm ent . Al l va lu a ti on advices/ruling should be placed on FBR Website so it can available to everyone.

Section 25 suggests different modes of valuations but no rules behind it.

Further most of Valuation orders/ruling advices/ruling did not give the complete

details/basis of arriving at rates of items.

This matter also needs immediate attention.

APMA had provided a letter on the valuation of Shocks Absorbers given by one of your Officers which was not considered by him and contents of which are self explanatory.

Sabir urged the Valuation Department not to carry out the above exercise in a hurry as the matter require detail exercise and obtain extension with the FTO. Meanwhile, it has been reported in the media about the rising smuggling of motorcycle spare parts, that is hitting the local industry besides genuine importers and dealers.

All Pakistan Motorcycle Spare Parts Imports and Dealers Association (APMSIDA) has said that smuggling of spare parts has increased manifold which is also causing billion of rupees revenue loss the national exchequer.

If appropriate steps are not taken at the borders to curb smuggling of parts from China and other countries then the industry and legal trade will close down.

The Association had taken up the matter several times but the government had yet to take any practical step s.

T he A ssociat ion ha d su gg est ed withdrawal of SRO 450 and additional duty of 17 percent, besides reduction of customs duty from 35 percent to 20 percent.

AUTOMARK | March-2011 10

The implementation of these suggestions would bring the menace of smuggling to an end and the government would get more revenue through rising import of spare parts from legal channels.

Import volume of spare parts has definitely increased but the share of smuggling has also increased sharply playing a major contribution in the parts markets.

Depreciation of the rupee again st various currencies and higher price of raw materials in world markets are also causing probl ems to the ge nuine importers owing to rising import value wh ich is af fecting local business.

The Association believed that rising import duty on spare parts h ad increased the smuggling and this illegal activity can only controlled or curbed by decreasing the import duty on spare parts.

The Afghan Transit Trade is al so damaging the local industry as well as the national exchequer. The demand for auto parts is highest in the motorcycle industry that is 60 percent, then for cars, which constitutes 22 per cent, and trucks, buses and tractors consume the rest 18 percent. This demand is met by imports that cater 22 per cent while the loca l ma nu factu rers su pp ly th e remaining 78 per cent.

Motorcycle industry has performed fabulously in the last few years and currently 150,000 units are being sold ev ery m onth w hi le ar ou nd 6 0 assemblers incl uding two to three Japanese bike assemblers and rest Chinese bike makers are engaged in a t ou gh comp etition. Th e annu al production of these assemblers has increased to 1,387,000 units by 200910 as compared with 917,628 units prepared and sold by 2008-09. In 200001, bike production was 119,169 units.

The share of Chinese bike makers in total production of 13,87,000 units is 60 per cent while three Japanese bike makers hold 40 per cent. The import of Ch inese b ike h as alr eady been suspended since 2007-2008 . The highest import of bikes was recorded in 2003-2004 at 22,692 which plunged to 156 units in 2006-2007 and since then no bikes were imported…….

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Exclusive Articl on Seed sector

by Syed Mansoor Ali

Pakistan needs massive changes in Seed Sector

Syed Mansoor Ali

We have to strive hard to introduce new varieties of domestic seeds as improved varieties and high quality seeds are basic requirements for productive agriculture, which is the basis of sustainable economic development in Pakistan. In order to provide an adequate seed quality assurance infrastructure with respect to seed testing and development, we should bring multi-international seed companies in Pakistan.

Similar actions have allowed the Indian seed industry to make huge contributions to the production of quality seed for Indian farmers and improving their food, nutritional value and livelihood security. Superior genetics and technologies with excellent research and develop establishments have resulted in considerable productivity enhancements. These enhancements have helped India emerge as a major player in the global seed business, with an estimated turnover exceeding USD 1.5 billion.

As a result, today, India ranks fifth in the world seed trade.

Agriculture starts with seeds. It is the least expensive but most important factor influencing crop yield. High quality seed is the basis of higher agricultural productivity. Seed quality depends on many factors such as seed purity (amount of unwanted material), fr ee fr om d isea se, v ig or, h ig h germination percentage and seed size.

On the other hand, farmers should be vigilant in their purchase of seed stock from a reputable seed dealer who has proper cleaning, handling and storage facilities. Proper storage of seeds is crucial as excess humidity or heat can cau se da mage in a short tim e.

The government of Pakistan, its research institutes and agricultural universities have good understanding of seed science. We have prestigious institutes like Pakistan Agricultural Institute (PAR C), Central Cotton Research

AUTOMARK | March-2011 11

Institute (Multan and Nawabshah), National Institute of Agriculture and Biology, Faisalabad; agr icu ltu ral universities hav e been conducting q ua lity r e s e arc h in var io u s sectors/aspects of agriculture. These institutes have well-equipped labs and their staff is compris ed of highly qualified scientists with doctorates from reputed foreign universities. Ministry of Agriculture (MINFA) overlooks the planning and administrations of these affairs to ensure the gro wth and sustainability of Agriculture.

In particular, the management of seeds is co nducted by the Federal Seed C er ti fi ca t ion and Re gi st r at i on Department (FSCRD), National Seed Councils, Federal Seed Registration Councils (FSRC) and Provincial Seed Councils (PSC). Policies and legislations that go vern seed productivity and management and other seed related matters include the 1973 Seed Act, which was updated and reviewed in 2008, and th e 2009 National S eed Policy.

The nation does have the infrastructure needed for ensuring better seed quality production, however, despite these protective measures, the ground reality pertaining to ‘seed’ in the country is not very encouraging. The reality is that there is a dire need for an immediate review of the current state of affairs surrounding the production and marketing of seeds. Inefficiencies, poor management, administration, and execution of seed affairs are prohibiting proper and beneficial use of the facilities and legislations that govern seed affairs.

The disorganization in the business is causing huge losses to the production of our cereals, vegetables, legumes and

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Exclusive Articl on Seed sector

cash crops. This is a matter of grave concern especially keeping in mind the fact that the agricultural sector of Pakistan provides employment, directly or indirectly , to almost 70% of the total population and accommodates nearly 47% of employed labour-force. At the beginning of 2010, it was contributing almost 21% to the GDP per annum, and as such a set-back to agriculture productivity can affect the performance of the economy to a great extent. It is shocking to note that Pakistan produces barely 10% of its own (vegetable) seeds; it depends largely on imported vegetable seeds from China (15%), Holland & America (5%), and India (70%). If the inefficiencies are to be eliminated, then this dependency on foreign imported seeds could be reduced by a significant percentage.

In a conversation with Mr. Shakeel Ahmed (Zamindar Seeds Hyderabad) it became evident that there are two reasons behind the nation’s absence and non-existe nce in vege tabl e seeds:

1) our farmers are poor and cannot spare crops to develop seeds. They are always in a haste to sell their produce for money for subsistence and for investing in the next harvest.

2) There is no policy in Pakistan that binds farmers to grow crops according to the cropping schedule similarly like in India.

This is one of the reasons behind why

Ind ian dominate s as a source of imported seeds. In other words, India as a nation is at an advantage because by way of legislation farme rs are instructed to harvest crops according to a planned agricultural directive that proves beneficial for the entire country.

Their national agricultural planning allows them to fulfill the needs of fodder, seeds, and staple crops, thereby allowing them to become self-sufficient and ensuring that no shortages of crops or seeds occurs at a national level for which they would have to rely on imports.

Where as in Pakistan , the lack of ag ri c ul tu r a l p l anni ng a nd t h e implementation of whatever regulations do exists gives farmers and land-owners the freedom to grow crops based on either trend or profit. Consider the following example and the benefits that can result from adopting a national agricultural planning system: a farmer with 10 acres of land according to an agricultural mandate based on the agroecological needs of various regions grows wheat on 6 acres, vegetables on 2 acres, fodder on 1 acre, and leaves vegetables on the remaining 1 acre to produce seeds.

Similar actions have allowed the Indian see d i nd u st r y t o m a k e h u g e contributions to the production of quality seed for Indian farmers and improving their food, nutritional value an d liv elih ood security. Superior genetics and technologies with excellent research and develop establishments h ave r esu lt ed i n con sid er a bl e productiv ity enhan cements. These enhanceme nts hav e helped India emerge as a major player in the global seed business, with an estimated

AUTOMARK | March-2011 12

by Syed Mansoor Ali

turnover exceeding USD 1.5 billion. As a result, today, India ranks fifth in the world seed trade.

While our performance could be gauged from the fact that we have neither a vegetable seed industry nor do we support what we do have. In other words, ou r as sets are not being converted into a profitable industry for the country. We have an average annual production of 1138 thousand tones of onion in the country. The quality of our onion is extremely good and produced in all four provinces (Sindh-Phulkara, Punjab-Desi Red, Balochistan - Sariab Red and Chiltan-89 and NWFP Swat1) but the only source of onion seeds are local farmers of the same area who produce on a limited scale with whatever means they have available at hand. The farmers of the adjoining area buy these seed from them. These farmers have no idea of the total seed demand in the country and as such a short fall in onion seed occurs every year. This then leads to a gap in the supply-demand spectrum (20-local: 80-Imported), which is filled by the Indian onion seed. It should also be noted that the output of the Indian seed is no match in quality and size to that of the onions produced in Pakistan with our own seeds.

The situation with reference to seeds of wheat, cotton, rice and maize are better compared to vegetable seeds. They are locally produced and marketed through several hundred companies in the country. However, inefficiencies in

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Exclusive Articl on Seed sector

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Syed Mansoor byby Syed Mansoor AliAli

The situation with reference to seeds of wheat, cotton, rice and maize are better compared to vegetable seeds. They are locally produced and marketed through several hundred companies in the country.

The general complaint made by the farmers about the cotton seed is that sometimes small companies sell the seeds of those varieties that did not make good market by putting them in new bags with a label of good/popular variety. research, execution of seed policy, su sta ina bility, m arketing eth ics (adulteration, spurious seeds etc.) are causing huge losses in terms of the crop yield. The situation in maize is much better as imp orted Hybrid seed (2 5 00 Rs/ 10 kg ) is av ai lab le in abundance in local market.

There are many companies selling wheat seed but not all of them sell good seeds.

There are numerous small companies operating from their backyards following no infrastructure to ensure seed quality.

These companies randomly mix expired, spurious and/or wheat coming straight from the mills in good seed causing great loss to the yield. Only a judicial legislatio n can prevent this from happening and put in place a qualitycontrol measure for seeds that are sold in the market. Another area that needs g over nm ent intervention is th e availability of approved varieties of produce from private companies. It has been observed that approved varieties disappear quickly from the market and inferior stuff fills-in the vacuum. In 2 0 0 8, A g r i cu l t u r al Un iv er s it y Tandojam, introduced a variety (TD-1) of wheat that had an average yield of 70/80 maunds/acre. The availability of this variety is now scarce as only one company (Hira) in Punjab is producing it which is not sufficient enough to meet the bigger requirement.

Particularly for wheat and generally for all crops, our farmers need education, which could possibly be given through extension specialists to disseminate new knowledge and skills to farmers to aid them in successfully adopting and making a more efficient use of their land and allied resources providing emphasis on good seeds and timely sowing with right quantities. The low yield in wheat is attributed (50%) to farmers as they prefer using their own produced seed ( w h e a t s t or e d fo r t h ei r o w n consumption). The number of these farmers is significant because 60% of our cultivated lands are owned by small farmers. The other area that requires

significantl y improved from 40/50 maunds (non-BT variety; No 78) to 70 maunds/acre. Hybrid seeds are also available in the market coming from Australia that can increase the yield further up to10 maunds/acre. However, its price is more than 50% than that of the local BT varieties. The BT varieties are available in between 1800Rs/10kg2200R s/1 0kg compare d to 5000Rs/10kg (Australian Hybrid seed).

The serious challenges pertaining to cotton seed could be better imagined by the report, “Punjab probes 600 seed companies for infrastructure" published in The Nation (Lahore), Feb 08, 2011.

c ont in u ou s ed u ca ti on is t h eir understanding of the affects of yield versus sowing time of seed. In wheat, there are three stages/timings of sowing: e a r l y (A g e t i / P a w a n ) , m i d d l e ( M ed i u m / S on a le ka ) a nd La t e The report states that (Pachati/Maxi). These stages have a "Action has been initiated to cancel direct bearing on the amount of seed to the registration of the seed be sown. The recommended quantities companies having no are 50K g/acre, 70-80kg/acre and infrastructure as per rules and 100kg/acre for early, middle and late regulations after investigation of sowing respectively. The vigilance (put 600 registered seed companies in the right quantity of seed as per sowing timings) in this area will increase yield Punjab. The meeting also decided of wheat up to 30-40%. to ban the sale of colored seeds so Cotton is our cash crop. We stand 4th that no excessive price could be in cotto n production in the world charged to the cotton cultivators. ranking. We are almost self-sufficient The meeting evolved strategy for and are able to fulfill the demand of a provision of quality and attested large (approximately US$ 10 billion seeds in the next season of cotton. dollar) domestic textile industry. Since the introduction of BT varieties (this is The meeting was informed that by yields Syedhave Mansoor Ali Seed Corporation will not a hybrid seed) our Punjab

provide approved seed of BT verities of cotton of 45 thousand maunds to cultivators for which arrangements have been made.

The Minister directed to apprise the Punjab government of the report regarding average production after getting samples of seeds available for cultivation of cotton of Federal Seed Certification. The Minister also directed Federal Seed Certification Department, Agriculture Department and Agriculture Department Extension to have AUTOMARK | March-2011 13

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Automotive Sector - Update

Car sales improve by 12 percent in 7 month FY11 Car sales have increased by 12 percent in first seven months of current fiscal year FY11 to reach 72,580 units as compared to 64,965 units in the corresponding period last year, data released by Pakis tan Automotiv e Manufacturers Association (PAMA).

According to the latest numbers by PAMA, new year registration factor and deferred sales from December were seen as “major reasons” behind surge in sales, which is also evident from the past trend, as car sales on a month-on-month (MoM) basis recorded a substantial increase of 73 percent to stand at 12,934 units as against 7,446 units in December 2010.

The highest growth was observed in the HCAR, as its auto volumes surged by 21

percent to 1,904 units in the month January 2011. Whereas, highest drop was seen in DFML as its sales declined by 59 percent to 23 units in the said month.

However, car sales for the month of January 2011 improved by 15 percent year-on-year (YoY) to 14,668 units compared with 12,704 units sold in same period last year.

During seven months of FY11, the major increase was seen in sales of Pak Suzuki as its sales grew by 14 percent to 45,113 units compared with 39,646 units last year. This double-digit improvement indic ates grad ual str engt hening consumer confidence in the economy, Furqan Punjani, analyst at Topline Research said. .....

coordination and make regular monitoring of the seed companies."

needed is a quality-control measure that not only prevents this type of losses from occurring but al so encourage good companies like Guard to come forward and play their role in supplying quality rice seed to Pakistani far mers.

We have to strive hard to introduce new varieties of domestic seeds as improved varieties and high quality seeds are basic requirements for productive agriculture, which is the basis of sustain able economic development in Pakistan. In order to provide an adequate seed quality assurance infrastructure with respect to seed testing and development, we should bring multi-international seed companies in Pakistan .This is required to incre ase cro p productivity and provide enhanced food security in the country.

The general complaint made by the farmers about the cotton seed is that sometimes small companies sell the seeds of those varieties that did not make good market by putting them in new bags with a label of good/popular variety. The impact of such practices falls on yield affecting the financials of farmers and country as a whole.

There is a great potential in the cotton crop to increase our annual production by 5-6 million bales, which could bring revenue of 3 to 4 billion dollars for the country. This is possible by continuous and vigilant monitoring of the seed comp anies to cu r b th e sale of substandard and unapproved varieties assuring the sale of qualitative and approved seeds. This will maximize cotton production and in turn the economy of the country could be strengthened.

The rice seed has more or less similar problems. In the year 2007, a report titled “Hybrid Seed Companies Accused Of Duping Farmers” (http://oryza.c om/AsiaPacific/Pakistan-Market/6391.html.) related that Pakistani farmers in Sindh faced huge losses due to the Hybrid rice seed imported from China which turned out to be unproductive. What is

Indus Motor Company (IMC) profits slow down Indus Motor, the maker of Toyota Corolla, recorded a 34 per cent decline in net profit to Rs908 million in the first half of fiscal 2010-11 primarily due to higher cost pressures and lower other income.

Manufacturing operations were affected by rising input cost due to depreciation of the rupee against Japanese yen and other inflationary pressures, said the company in a press release.

The result was accompanied by a dividend announcement of Rs5 for every Rs10 ordinary share, according to a communique sent to the Karachi Stock Exchange on last week......

The seeds coming from foreign countries do not suit our soils due to variation in weat her. Th e di seases t hat ar e suppressed there according to their weather become dominant here due to different weather conditions, which impact the yield. Another important aspect that our research stations should take into care, particularly in cotton, is that the seed should not be released before completion of the research on disease and virus purity until it is fully a p p r ov e d a n d c e r t i f i ed . T h e developmental timeline for a seed is generally 10 years but we bring it into the market in 4 years, which should not happen.

In order to start producing vegetable seeds in the country, it is suggested that the lands which are not under cultivation (21.56 million hectares are not being cultivated fully due to lack of capital and irrigation facilities) should be given to the army to produce vegetable seeds.

A r m y h a s t h e c a p a bi l it y a nd administrative skills to undertake this national task for the development of our country. They are successfully

running National logistics cell, Frontier works organization, and Fuji Foundation (by former officers of Armed forces) which speaks in volume about their capabilities.

AUTOMARK | March-2011 14

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Exclusive Articel - Automotive Issues

Cover Story by M. Owais Khan

Increase in age limit of used cars fails to provide any benefit to car buyers The price of used cars has not declined since December 2010 when the issue of used car age limit had hit the headlines of the newspapers. Even no notable price cut is seen in locally assembled cars who are now cashing up the demand arriving from the growers owing to rising farm income and good prospects of some cash crops.

Confusion has gripped among the buyers and in the markets over the conflicting media reports about increase in depreciation on import of five years old used cars being imported under various schemes.

Two leading pr in t med ia h ad reported earlier this month that the g o v er n m e nt h a d ex t e nd e d depreciation limits by an additional 10 per cent for assessment of duty and taxes on the imported used cars.

This move may result in bringing down prices of the used cars.

The Economic Coordination Committee (ECC) meeting under Finance Minister Dr Haf eez Sh aikh enhanced the depreciation limit to 60 per cent from existing 50 per cent. However, the decision was not made public after the meeting due to the fear of a backlash from the local aut o-manufacturers.

A statement issued after the meeting said only that the ECC has approved summaries of the commerce ministry seeking rationalisation of car prices in domestic market.

As per law, the government allows one per cent depreciation per month in value of used cars for assessment of duty.

Though the government extended the age limit of used cars to 60 months (5 years) in December but even still an importer could avail a maximum of 50

had given an advertisement in the print media seeking safeguarding of investment of billions of rupees and jobs of 200,000 workers of the auto industry.

per cent depreciation because of the upper capping.

The new law envisages assessment of duty to the maximum of 40 per cent of the original price of the five year old imported cars.

Auto industry people are also not sure whether the government has really taken the decision regarding increase in depreciation but said that something was cooked in th e m eeti ng on depreciation issue but was not made public.

However, in the past the PAMA and PAAPAM had remained very cautious in the last ECC meetings since the issue of used car imports had surfaced.

Feeling the gravity of the issue, the Pakistan Automotive Manufacturers Association (PAMA) and vendor industry represented by the PAAPAM on March 1, the day of ECC meeting,

AUTOMARK | March-2011 15

PAMA and PAAPAM are deeply concerned over the government’s policy of liberalizing the import of used cars by increasing the age limit from three to five years. They again recalled that like in the past the facility of increasing the age of used cars will be misused by unscrupulous traders and importers.

The PAMA and PAAPAM did not mention clearly regarding depreciation on used car but their advertisement said that there is mo re anxiety on the proposal that further liberalization is in the offing.

“So far the government has not issued any SRO or notification relating to enhancement in depreciation on used cars,” an assembler said adding that something was done in the last ECC meeting as reported by some leading print media but some other media remained silent.

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Exclusive Articel - Cover Story

Chairman All Pakistan Motor Dealers Association H. M. Shahzad said the enhancement in the depreciation limit will lower the prices of used cars and consumers will definitely get a relief by getting cheaper imported cars. He said the government has still not issued any notification about the decision on depreciation but hopefully the notification would arrive.

He said that Pakistan has the most liberal policy for used cars imports in the whole region. He added that used vehicles import policy must be regulated so that growth of the local industry is not impeded and consumer interest is protected.

The assembler said that the industry has always asked the government to provide a stable policy so that it could plan effectively for future models and expansions. The government should reverse the decision on age limit of used cars to three years and maintain the current depreciation of allowance.

Perhaps the government fearing negative reaction from the assemblers did not announce the decision on the depreciation issue in the meeting.

Chairman All Pakistan Motor Dealers Association H. M. Shahzad said the enhancement in the depreciation limit will lower the prices of used cars and consumers will definitely get a relief by g etting ch ea per i mp or ted c ars.

He said the government has still not issued an y notification about the decision on depreciation but hopefully t h e noti fi ca ti on w ou ld a r ri ve.

To encourage new players in the auto manufacturing, the commerce ministry had proposed to the ECC to approve a package seeking reduction in duty to 16.25 per cent from 32.5 per cent on import of components, parts and CKD kits not manufactured locally, and 25 per cent duty instead of 50 per cent in cas e of components manufacture d locally.

This special package was proposed for a pe riod of three years to attract i nvest ment in th e au to sec tor.

The ECC asked the commerce ministry to prepare another detailed study on the proposed package to identify the investors and its impact on car prices in domestic market.

According to the official statement, the ECC asked ministry of commerce to give a detailed presentation on the matter of r ationalis ing of prices of locally manufactured cars.

Meanwhile, an English daily newspaper reported on March 2 that the Commerce Ministry proposed in the ECC meeting

that the depreciation cost on the import of used cars up to five years should be raised from one to two per cent per month with maximum limit of 50 per cent of the price. However some of the ministries opposed the proposal and suggested that the depreciation cost should be limited at one per cent for a m aximum period of 60 months otherwise their cost would be near to the locally produced cars.

Finally it was decided th at the Commerce Ministry and the Federal Board of Revenue (FBR) would give a detailed briefing on their proposal in the next ECC meeting, the newspaper said.

It is strange that the role being played by the Ministry of Production has been very critical and also opposed by the auto sector on a number of occasions for giving suggestions to liberalize imports of used cars and relax policies in order to punish the assemblers for not cutting the price despite various warnings.

Neither the concerned Ministry nor the government is serious in taking any decision to benefit the end users. They are more interested in facilitating a lobby of importers or some political friends and die hard party supporters to take maximum benefit.

It can be gauged from the fact that the Prime Minister and President as per print media reports were at odds over the decision on age limit of used cars and finally president Asif Ali Zardari had intervened in order to get reversed the government’s earlier decision and thereby allow the import of five years old cars.

The price of used cars has not declined since December 2010 when the issue of used car age limit had hit the headlines of the newspapers. Even no notable price cut is seen in locally assembled cars who are now cashing up the demand arriving from the growers owing to rising farm income and good prospects of some cash crops.

Many car assemblers have already given enhanced production targets to their vendors for 2011 as compared to 2010 in order to meet the huge demand. For

AUTOMARK | March-2011 16

example, Pak Suzuki Motor Company Limited will assemble 11 per cent more vehicles in 2011 to 87,580 units as compared to 78,840 units in 2010.

On a random visit to the local markets, there is hardly any big difference in the price of locally assembled cars and imported used cars of five years old that arrived in January and February. The 650 cc used cars are available in the range of Rs 550,000-650,000 while locally produced 800cc Suzuki Mehran VXR CNG costs Rs 560,000.

The almost 1,000cc imported used Toyota Vitz, Passo and Toyota Belta are available at Rs 750,000-1,050,000 while locally produced Suzuki Alto VXR CNG 720,000 and Cultus VXL is available at Rs 906,000.

The 1,300cc Toyota X Corolla is priced at Rs 1,250,000-1,350,000 while Suzuki Liana can be purchased at Rs 1,239,000 and Toyota Corolla at Rs 1.3 to Rs 1.4 million.

In case the depreciation of used cars is not raised then chances are slim for any price cut. Consumers had already lost hopes that the car makers would ever cut the rate sharply in view of losing strength of the rupee against the Yen and high demand of cars.

Will the used car importers’ lobby pass on the price cut to the consumers in case the depreciation on used cars is enhanced? In absence of any check from the government they will further fleece the consumers by demanding higher profit margins.

There is slight improvement in arrival of completely built up (CBU) units of cars as per figures released by the Federal Bureau of Statistics but used car dealers say that the figures also include arrival of new cars being imported by the car assemblers.

Import of CBU vehicles during JulyJanuary 2010-2011 went up slightly to $59.5 million as compared to $57 million in the same period of last fiscal.

Similarly, in January 2011, import of cars stood at $11 million as compared to $7.2 million in December 2010 and $8.7 millio n in January 2010.....

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Exclusive Article on Auto Sector

Ali Hassan

Wrong policies in the auto sector causing huge revenue losses It has come to knowledge that some assemblers after getting this certificate grossly misuse this facility by importing huge quantities of parts from their original requirement and sell them in the open market at higher prices. By doing this, such type of assemblers inflict huge losses to the national kitty and take maximum advantage of government’s inventive packages.

A lot of people and market analysts in the auto sector blame the government policies responsible for causing huge losses to the government’s revenue either in motorcycle or car industry.

Most of the times policies are made to benefit some vested interest and SROs and notifications are issued either in the budget, trade policies or some other occasions when the interested party is highly dying to have the benefit at any cost.

Recent changes in the used car import decision relating to increasing the age limit of used cars to five from three years showing interest of top government officials including the persons that run the country are such a classic example of providing relief to their favorites openly leaving aside any benefit to the entire nation.

Every body knows that increasing age

limit of used cars up to five years under various schemes is neither going to bring any relief to the people nor to hit the local industry which had launched media campaign over negative repercussions on the assembl ers and the vendor industry.

However the local industry is more cautious of the misuse of the gift, transfer of residence and baggage schemes by the importers of cars rather than giving any relief to the overseas Pakistanis. This misuse of facility for overseas Pakistanis by the importers has been going on for the last a decade but the government and concerned ministries hav e never initiated any enqu iry to unearth a big scam.

Perhaps the vendors are going to loose more rather than the car makers as they are highly dependent on the sale and production of local cars. Assemblers in the last few years are already involved in importing costly vehicles through consumers’ money which had been taken in advance.

On many occasions the customs duty on import of vehicles had been changed to provide relief to the political partners or friends.

An example of missing 300,000 units in the production figures of two wheelers

is taken as a case of wrong policies and lack of coor dination among th e stakeholders and the concerned government departments.

The chief executive of Engineering Development Board (EDB) was reported to have quoted the figures of PAAPAM that the country’s two wheeler production had swelled to 1.8 million units in 2010 but the data collected from EDB and Sales Tax department revealed production of 1.5 million unit last year.

Nobody knows which the authentic figure is and who made extra 300,000 bikes in the country and where is the collection of taxes and duties from these bikes and who really collected it. The amount of taxes and duties from 300,000 units stands between Rs four to Rs five billion which has been evaded.

Perhaps PAAPAM has not given genuine production of bikes which the EDB chief quoted without counter checking its

Sources in the auto sector believe that the policies made under the AIDP and by the EDB is causing huge revenue losses of over Rs 50 billion per annum.

Currently the auto sector is being run under a Tariff Based System (TBS) which was implemented in 2006 while three SROs – SRO-655/2006, SRO-665/2006 and SRO 693/2006 – cover the entire auto sector.

AUTOMARK | March-2011 17

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Exclusive Article on Auto Sector department.

To some extent the wing of Federal Board of Revenue (FBR), the Customs Valuation – can be blamed for formulating controversial policies aimed at taking care of vested interest. The department gives out ruling under Section 25-A without seriously looking into the matter.

The Valuation Department while taking influence from the powerful assemblers’ lobby increases the valuation rates of two wheeler parts being imported from China while on the other hand the company, which lodges the complain against Chinese bike makers for under invoicing, obtains IORC from the EDB to pay duty from zero per cent to 20 per cent on various parts whil e other importers are paying 47.5 or 50 per cent duty to bring the same parts.

By fixing the valuation rate on higher side attracts other people to misuse this facility like bringing these parts through misdecleration which is called Khep in Customs language. These items are imported in those containers who are less in weight but have good capacity.

Some black sheep in the government departments havin g no tech nical education and deputed on connections and in connivance w ith corr upt businessmen and industrialists who are more interested in their own interest cause huge revenue losses.

These officials while taking bribe from industrialists issue concessional IORC to the concerned industrialist. This may be noted here that in SRO656/2006 the assemblers are provided the list of importable parts very late and as a result the industry people while ignoring the system of PRAL either directly import th e parts or through commercial importers.

Pakistan’s car industry is also fully uti lizing the benefit s of w rong government policies and causing revenues losses by getting IORC from the EDB. Only heavy vehicle industry is not providing any revenue shocks to the government while the tractor industry is providing cheap farm machinery to the growers and farmers.

Despite wrong policies the two wheeler industry has performed incredibly well as compared to other sectors. Some extent the car industry has seen some improvement in the sales for the last seven or eight months. The growth in these two sectors can be attributed to the rising farm income of growers from various crops and reasonable support

prices otherwise situation would have been different.

Some industry people say that irrespective of loop holes, targeted interest and wrong policies the real loser is the revenue-starved government which has been trying to multiply its revenue earnings through various taxation measures.

In the auto sector, the Engineering Development Board (EDB), a strong arm of the Ministry of Industries and Production, is responsible in holding meeting with stakeholders and other relevant ministries to frame policies for the auto sector. However, it has been seen that the Ministry of Industry had remained in the forefront by urging the government to liberalize import policy on used car import in order to punish

the car assemblers for not reducing the prices. Even today after a serious of meetings with the industry stakeholders the car makers are firm not to drop a single paisa on car prices.

Then the industry in collaboration with the government’s help is also managed through an Auto Industry Development Plan (AIDP).

But sources in the auto sector believe that the policies made under the AIDP and by the EDB is causing huge revenue losses of over Rs 50 billion per annum.

Currently the auto sector is being run under a Tariff Based System (TBS) which was implemented in 2006 while three SROs – SRO-655/2006, SRO665/2006 and SRO 693/2006 – cover the entire auto sector. These SROs are reportedly to have been prepared with the help of powerful stakeholders of the bike industry.

Under these SROs the import duty on completely built up (CBU) bike is 65 per cent, 15 per cent on part s not manufactured in Pakistan, 32.5 per cent additional duty on parts produced in Pakistan making a cumulative duty of

AUTOMARK | March-2011 18

Ali Hassan 47.6 per cent.

After getting an incentive led input output ratio certificate from the EDB, the rate of 47.5 per cent customs duty changes into five per cent by changing the name of parts at five per cent (sub component), 10 per cent for components and 20 per cent for sub assembly.

However a certificate is also issued to the manufacturers for importing raw material at zero per cent rate of duty which the industry people term it beneficial for support of the local industry.

It has come to knowledge that some assemblers after getting this certificate grossly misuse this facility by importing huge quantities of parts from their original requirement and sell them in the open market at higher prices. By doing this, such type of assemblers inflict huge losses to the national kitty and take maximum advantage of government’s inventive packages.

This illegal practice cannot be done w it h ou t gr ea sin g th e pa lm o f government officials and the officials looking after tariff issue in the EDB should take a serious notice of corrupt officials around them and grab the industry pe ople involved in these criminal activities through which they are becoming billionaire while the government is losing precious earning.

The Finance Ministry led by Dr Abdul Hafeez Shaikh can take stock of the situation by holding a discussion with various associations including Chinese bike makers and seek their point of view as to how revenue leakages can be plugged.

Some Chinese bike makers believe that instead of three SROs looking after the issue of auto industry there should be only one SRO by incorporating the three SROs as the three SROs are helping many stakeholders and businessmen to make money.

The government should offer zero per cent duty on import of raw material as per IORC. The announcement of new budget is just two and a half months away and the government should indulge in brain storming session with the stakeholders if it is really serious in addressing the revenue shortfall.

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Motorcycles Production Fig - History

Made in Pakistan & Japanese Brand Motorcycles Production History Figures from 2003 to 2010

Note: For year 2009-10, figures are for 11 monthly only AUTOMARK | March-2011 23

Source: EDB, APMA

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Exclusive Article on e-Bike

by Shahzad Tabish from NED University

Focusing Towards Modern Day Urban Transport “The Electric Scooter�

The motorcycle locally produced utilizes internal combustion, Spark ignition carburetor based engine technology for their propulsion. Many methods & technologies are available that may be utilized to induce changes in the current Spark ignition engine to enhance its efficiency, like the suggestion to introduce Electronic fuel injection (EFI) system instead of the carburetor. fuel efficient & environmental friendly, along with making the production procedures easy & access able that has made the motorbike very cheap as well.

Considering all these facts & figures one should feel satisfied & content with the progress of the motorcycle industry, but as we al l know that progress is dependent upon having a futuristic approach. To keep the industry dynamic, looking ahead & inducing changes should be the order of the d ay .

The two wheeler transportation has been The world of today has become very at service to mankind for more than a specific & choosy. Customers of today century. Even before the evolution of require the maximum efficiency in least the automobile, bicycles & motorbikes investment & maintenance cost. This were at service as a basic means of nature of consumer demands an transportation. With the passage of time, evaluation in the technology or; in fact the technology that propels the two c hang ing th e t ec hnology it self. wheeler has changed in accordance to The motorcycle locally produced utilizes the given needs & demands of the internal combustion, Spark ignition consumer sector. carburetor based engine technology for The changing demands have already their propulsion. Many methods & made the modern day motorbike very technologies are available that may be utilized to induce changes in the current Spa rk ignition en gi ne to enh a nce it s efficiency, like the suggestion to introduce Electronic fuel injection (EFI) system instead of th e carbu retor. Th is reduces the running cost of the two wheeler however; the maintenan ce co st of the motorbike remains the same.

A dr as tic ch an ge in technology basically means changing the entire concept Chinese-made electric scooters and bikes get of propulsion of motorbike recharged at the 2004 Challenge Bibendum, a green vehicle rally for carmakers. The event was itself, i.e. introducing electric held in Shanghai last October. The recharging station motors instead of the Internal was provided by EDF, France's electric Combustion engine.

At a first glance the normal scooter & an e l e c t r i c s c o o t er (generally referred as an E-scooter) does not differ at all. It is when one turns the power source the basic difference is realized. The electric scooter produces no noise as it has no combustion cycles to perform. During the ride the only noise generated is due to the friction noise of the tyres & the road.

Electric motors as compared to internal combustion engines are very efficient, in the conversion of supplied power into work. So the first advantage of electric scooter comes in the form of its prime efficiency which is greater than even the most fuel efficient gasoline scooter.

Along with the supreme efficiency, the electric motor provides instantaneous response to the given input. Th is basically means better acceleration capability than the gasoline propelled two wheeler.

The overall assemble of Escooter is almost maintenance free. Any usual motorbike having an internal combustion engine requires regular maintenance in order to keep it running. However, the electric scooter requires nothing but electricity to get mobile.

Environmentalists find

utility company.

AUTOMARK | March-2011 24

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Exclusive Article on e-Bike

The immediate market of E-Scooter also comes from the same country which has taken over 50% of two wheeler’s local production share, i.e. China. A diverse range of E-Scooters are readily available from numerous Chinese manufacturers. absolutely no issues with the E-Scoter. Emissions from the scooter itself are nil & the electricity that charges up the scooter comes from the grid stations that produce up to 70% less pollution, on an average from any other pollution source.

The cost to run the electric two wheeler is also low as compared to the gasoline counter parts. As we all know that the gasoline prices in the international market are sky high these days & this gets a direct reflection in the form of raise in price of petrol locally. It is well known to general public that the grid power is cheap as compared to other power sources, so the electricity utilized to charge the E-Scooter contributes to only 30% of the net cost of a gasoline scooter to do the similar mil eage.

Having read the advantages associated with the E-Scooter an instantaneous question arises in the readers mind about the market availability & range of the product, with respect to power & price on offer.

The immediate market of E-Scooter also comes from the same country which has taken over 50% of two wheeler’s local production share, i.e. China. A diverse range of E-Scooters are readily available from numerous Chinese manufacturers.

The author has classified the range into certain categories in accordance to the ascending order of power & price & is mentioned as follows.

The first category has electric motor co nfiguration that gives an output

ranging from 500-800W. The maximum attainable speed ranges from 35-40 km/hr. Range of the E-Scooter in this category varies from 55-70 km. The cycle time of the battery is approximately 250 cycles of complete charge & discharge after which the replacement of battery is inevitable. The cost ranges from 500600 US$ of the scooters in this category.

The second category consists of EScooters having electric motor providing an output ranging from 1500-2000W. The maximum achievable speed ranges from 50-60 km/hr. as far as range is concerned it can cover up to 90 km on one complete charge of the batteries that takes 6-8 hours. The cycle time is 350 cycles & the maximum payload capacity is around 150kg. The cost of an EScooter from this category is around 1000 US$. A famous name in the local market “Qingqi” is also involved in production of E-Scooter in this category.

The scooters belonging from third category have electric motor that gives 3000-5000W, has a maximum speed of 60-80 km/hr, can carry payload of 150 & has batteries that get recharged in 68 hours with a good cycle time of 500 cycles.

Al l t he tw o w h eel er categor ies mentioned above represent a design concept of modern city scooter. As a matter of fact, locally the scooter design is not very popular; however this design concept is the necessity of an Electric powered two wheeler, as it provides ample space for the batteries & the electric motor.

An initiative is require d fro m the

AUTOMARK | March-2011 25

Chinese motorbike manufacturers industries to introduce the E-Scooter in the local market. This initiative should be taken by an already established OEM of Chinese orientation. This will not only enhance the range off the OEM’s product range itself, but it will also diversify the view of the consumer who will recognize & invest for a better option i.e. Electric powered two wheeler.

In order to broaden the general perspective & thinking, proper publicity & marketing would certainly be required so that the individual get encouragement to trust & invest in the technology on offer. Just in the last year, motorbike has seen its peaking as far as local pro duction is concerned. Over 1.5 million units were sold only in the year 2010. The stats clearly indicate the immense demand of two wheelers locally, so the initiative of introducing electric bikes; if taken by a local investor has good probabilistic chances to get a success in the local market.

Concluding here I would like to say that world th ese days is striving for sustainability in energy sector. Along with this, there is a huge demand to cut the pollutant levels in all sectors in order to protect the environment. An EScooter is the only remedy for this cause as far as current two wheeler technology is concerned. There is a vast scope of E-Scooter in the local market as well. I personally hope that the E-Scooter is introduced sooner than later in the local market, contributing towards a greener future in Pakistan. Cheers!

China plugs into electric vehicles. Battery breakthrough holds promise for hybrids, fuel cells.

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Automotive Sector - Update

Car maker plans to raise output The PSMCL plans to produce 26,330 units of Mehran, 13,550 units of Bolan, 15,550 units of Ravi, 13,000 units of Cultus, 11,200 units of Alto, 7,350 units of Swift and 600 units of Liana in 2011.

Smelling a robust demand of cars this year from the rural areas on the prospects of good crops, a car maker, having over 50 per cent market share, unveiled a plan to increase its production by 11 per cent in 2011 as compared to 2010.

Pak Suzuki Motor Company Limited (PSMCL) in its vendor conference on Feb 18, informed the vendors about rolling out 87,580 units in Jan-Dec, 2011 as against 78,840 units produced in 2010.

The PSMCL plans to produce 26,330 units of Mehran, 13,550 units of Bolan, 15,550 units of Ravi, 13,000 units of Cultus, 11,200 units of Alto, 7,350 units of Swift and 600 units of Liana in 2011.

Meanwhil e, a part maker said the vendors had also asked Pak Suzuki to enhance the production of 800-1,000cc cars in coming months in view of the increasing demand from the growers as the country will witness increased wheat, sugarcane and rice production this season coupled with surging prices of sugarcane and cotton.

The cotton price is now tag ged at Rs13,000 per 40 kg as compared to Rs6,500 in September 2010, while against the official sugarcane rate of Rs127 per 40 kg the sugar mills lifted

Overall car production and sales during July-Jan 2010-11 grew to 74,977 and 72,580 units as compared to 65,014 and 64,965 units in the same period of last fiscal despite reduced auto financing, which had been one of the main sources of demand in previous years.

the commodity at Rs200.

The vendor said higher production of 800-1,000cc segment of cars will ensure timely delivery. They also asked the company to focus their marketing to lure rural customers who purchase cars on cash.

Another vendor, however, pointed out that the Pak Suzuki management’s production plan is highly optimistic if seen in the context of high interest rate, inconsistent government policie s, increased age limit of used cars under various import schemes and the law and order situation.

The management official replied that hopes were high on the back of increasing rural buying triggered by some good cash and minor crops. Rural buying holds 40-45 per cent share of the total sales.

Pak Suzuki and also other manufacturers did not see any big negative impact on their sales in times of floods from Jan 28 to September 2010 in three provinces and even car sales r e m a i n e d b ri s k de s p it e galloping inflation, he added.

AUTOMARK | March-2011 26

Another car maker Indus Motor Company (IMC) said that with Pakistan’s macroeconomic indices showing some signs of modest recovery the company expects the second half of 201011 to be better for the auto industry.

In near term the company’s earnings will remain under pressure owing to deteriorating security situation, power crisis, continuous depreciation of rupee, escalating input costs and more relaxation for used car imports .

The IMC said that allowing used car imports under various schemes had been misused and currently, it has started damping demand of locally produced cars. The used car imports will put additional burden on country’s import bill besides devouring foreign exchange, it observed.....

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Automotive Sector - Update

Zardari invites Japan’s auto parts giant to invest in Pakistan President Asif Ali Zardari on Wednesday invited To yota Tshusho, a leading Japanese auto parts giant, to invest in Pak istan, as automobil e sector in Pakistan is flourishing with the passage of time.He said that Pakistan is p rovid ing at trac tive investment opportunities and security to foreign investors in various sectors and has set up a special economic zone at an area of 2000 acres near Karachi for Japanese investors .He was tal king to Junzo Shimizu, President Toyota Tsuhsho (Trading House dealing in supply of auto spare parts), who along with Executive of Toyota Corporation called on him here.

The President said, Pakistan offered attractive facilities to foreign investors, a land of 170 million people with cheap and skilled labour force as well as liberal exp ort incenti ves offer ed gr eat opportunities to Japanese investors.

He said that Pakistan would prove a hub for foreign investors from where they can export their products to Central

Asia, China, India and Middle East while Pakistani people would get employment opportunities.

The President said that Japan was one of Pakistan’s trading partners, urging for further enhancing tr ad e and commercial ties for mutual benefits of the two countries.

The President said that Pakistan needs better trade terms with foreign investors and seeks resources and support of Japanese entrepreneurs to access its products to the international markets.

President Zardari said that Pakistan’s major imports from Japan are motor vehicles and their parts and machinery where power generators and textile m ach iner y constitu te t he m ain proportion of machinery import.

Presid ent Toyota Tsu sh o, Ju nzo Shimjizu said that their company would take benefits from the attractive and liberal policies of the Government of Pakistan and would invest in auto spare parts sector.

Japan is the fourth largest investment

partner of Pakistan with cumulative investment of US $ 385.9 million during 1989-90 to 2003-2004,constituting five percent of the total investment in Pakistan.

The big surge of investment observed in 1995-96 in Independent Power Producers (IPP) projects.

The Japanese investment recovered and increased by seven percent during 200203 to 2003-04 due to the increase of investment in the automobile sector.

Th e Japanese investment in the automobile sector grew by more than 5.5 times in 2003-04 in comparison with the previous year (2002-03) to meet the g rea t d omesti c d em and of th e automobiles.

Major sectors of Japanese investment are joint venture projects mainly in automobile sector. For example PakSuzuki Motor (Suzuki), Indus Motor (Toyota), Honda Atlas Cars (Honda), Gandhara Nissan Diesel (Nissan Diesel), Hino Pak Motors (Hino).

Yamaha to establish motorcycle plant this year in Pakistan: Mandviwalla The Yamaha Motors Company Japan would establish motorcycle plant in Karachi this year with investment of $150 million to cater to the increasing demand of motorcycle in the country, Chairman Board of Investment, Saleem H. Mandviwalla said.“Although the project was in pipeline for the last oneand-a-half year, the deal to this affect was finalized during President Asif Ali Zard ar i’ s recent vis it to Japan,” M a nd vi w a ll a to l d A P P w h i l e commenting on the visit.

Th e Board of Investment (BoI) Chai rma n said t hat d ur ing th e President’s visit, both the countries agreed to further boost their trade and investment relations.

He said the government of Pakistan would fulfill all the requirements for establishing the Yehama plant which, he said would have capacity of producing 5 00,0 00 motor cyc les annu all y.

Mandviwalla said that the 1960’ s technology was still in vogue whil e developing motorcycles in the country adding the Yamah a plan t would introduce latest technology and produce state-of-the-art motorcycles.

He said the groundbreaking of the plant would be held within next two months addin g that the plant would start production by the end of 2012 or early 2013.

He said that a Japanese company would build Karachi Circular Railway and elevated expressway from Port Qasim to Karachi while Mitsubishi Company also w anted to pour i n fur ther investments in the country adding that this company was already having five project in Pakistan.

Besides, he said, that several other companies including Toyota have shown interest to invest in Pakistan, adding that successful meetings were also held

AUTOMARK | March-2011 27

with Japan International Cooperation Agency (JICA).

Mandviwalla said that the President durin g his meeting urged on th e Japanese Prime Minister to provide Pakistan-specific investment credit to those Japanese companies which are interested to invest in the country.

The BoI Chairman was of the view that Pakistan and Japan were enjoying good relations however stressed the need for high level engagements to boost these relations.

He said that Pakistani mangoes, for the first time, would find space in the Japanese market where he said one mango would cost about Rs.3000.

He said that Pakistan would also take ste ps for attracting South Korean investments in the country and disclosed that President Zardari is scheduled to visit South Korea this year in this regard.

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Automotive Sector - Update

Car-makers blindsided by import-friendly policies “The government should be facilitating the existing industry and devising policies to attract new entrants, instead of appeasing traders,” said Indus Motor Marketing Director Raza Ansari The local car manufacturing industry has lambasted the de cision of the Economic Coordination Committee (ECC) to in crease the maximum depreciation allowance on imported cars from 50 to 60 per cent.

Speaking to media, Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) Chairman Aamir Allawala claimed, “Members of the government are pursuing vested interests in unfolding a step-by-step plan to decimate the local automotive industry.”

The in dustry representative also asserted, “ECC is soon expected to approve an increase in the depreciation rate on used cars from one per cent to two per cent per annum, thus, slashing the customs duty on these cars to half the current rate.”

Allawal a questioned the economic viability of the government’s policy of relaxations in car imports. He warned that these policies would threaten the local car industry and could cause massive job losses in the sector.

“Pakistan desperately needs industryfriendly policies that lead to employment generation and alleviation of poverty, rather than appeasement of the elite

under-invoicing their shipments by declaring 1,500cc cars as 1,300cc models,” alleged Ansari. “Government officials are party to these crimes because they too are benefitting,” he added.

Car dealers welcome import relaxations class for purchasing Vitz and Prados,” said Allawala.

“The government should be facilitating the existing industry and devising policies to attract new entrants, instead of appeasing traders,” said Indus Motor Marketing Director Raza Ansari. Ansari acknowledged that car prices had risen in recent years but asserted, “the average increase has been about seven per cent annually, which is considerably less than the rise in prices of inputs and the depreciation of the rupee against other currencies.”

He also pointed out that the car import scheme is meant for Pakistanis residing abroad but is instead being exploited by car importers. “We have documentary e vi d en c e t o p r o v e t h a t c a r s manufactured over seven years ago are being imported and many importers are

Financing for export projects increased The State Bank of Pakistan has increased maximum financing limit for an exportoriented project under the Long-Term Financing Facility (LTFF) scheme for plant and machinery from Rs1 billion to Rs1.5 billion.

In a circular issued on Monday, SBP said banks and development finance institutions (DFIs) may continue to provide financing facilities as per their credit policies over and above the maximum limit from their own sources subject to compliance with prudential regulations.

In another circular, SBP said that banks and DFIs can entertain financin g

requests of a new project or expansion and bal ancing, modernisation and replacement (BMR) of existing projects on the basis of projected exports.

Th e borrow er will have to meet minimum export target – $5 million or 50 per cent of sales whichever is lower – within a maximum period of four years, from the date of grant of refinance from the central bank in a phased manner. In the first phase, 40 per cent of the export target will be met in the first two years while the remaining 60 per cent target will be met in the next two years or to tal period of loan, whichever is less.

AUTOMARK | March-2011 28

“This decision will lower government revenue and benefit a handful of car dealers,” said a spokesperson for the Pakistan Automotive Manufacturers Association. He highlighted that the domestic industry has an an nual turnover of over Rs300 billion and employs cl ose to 200,000 workers.

Rejecting the co nte ntion that car manufacturers have failed to invest in the country, the spokesperson said, “original equipment manufacturers (OEM) have further invested over Rs20 billion during the past four years to exp and p r odu ct ion c ap aci ties.”

Car dealers welcome import relaxations “These steps show that the government has realised that the local car industry has not kept its part of the bargain and should not be given a free ride at the expense of consumers,” said car dealer.

Heavy Industries Taxila can make locomotives Director Brigadier Tariq Javed Rehan has said that HIT has the capacity to manufacture locomotives for Pakistan Railways. Speaking at the Lahore Chamber of Commerce and Industry (LCCI), he said that HIT would continue to play its role to strengthen the engineering industry. He said that HIT was increasing its liaison with private sector and efforts were underway to enhance interaction with the indigenous i ndu str ies of Pa kista n fo r th e d eve lop me nt of ma ter i als and components. He said HIT is currently manufacturing the Al-Khalid Main Battle Tanks.

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Automotive Technology - Review

By Muneeb Jawed Automotive Engineering- NED Univeristy

Honda Insight Hybrid Car & Hydrogen Cars The safety system of 2010 Honda Insight is well organized. It is not limited for car crash but for driver and passengers too.

If you want to purchase a new car which gives you advanced technology for use.

The New Honda hybrid cars recently launched Honda Insight Hybrid in a more practical way with 5-door form or system. This car is the advanced version of Original Honda Insight Hybrid 1999.

In the world of gas or electric hybrids, this car set the pace for hybrids in the automotive industry. After considering all essential needs, experts designed this car model. After launching this car in the market, still it is in much demand.

The technique behind manufacturing the Honda Insight hybrid is simple but still latest. The production company uses an under-powered and un-thirs ty intern al combustion engine which provides primary locomotion. To get more power for better acceleration, they used small electric motor that lies between the engine and transmission.

The model is little similar to the sleek and sophisticated fuel cell vehicle.

The front portion of the car is strong and eye catching too. The high quality LED break lights complete the look of this car. Inside, it is having a generous 5 passenger cabin. The 5-door hybrid slips are showcased the active lifestyle.

One very special feature of this car is radio data system; it is used to get extra information about your music. It is also include the facilities like Bluetooth and Hands Free Link.

The Honda Insight 2010 features all the amenities. The 60/40 split rear folddown seatback provides maximum comfor t sp ace for p eople. T he centerpiece of the car made up of advanced Integrated Motor Assist IMA syste m. The Batte ry pack is well improved. It is resulted into the cost savings and helps to reduce weight. The engine carries 1.3 liter and has 8 valves with 4 cylinders. The car has DC electric brushless motor. Plus, it is equipped with continuously variable transmission.

The safety system of 2010 Honda Insight is well organized. It is not limited for car crash but for driver and passengers

too. To enhance the safety of vehicles on the road, they implement advanced designs and features. The anti-lock breaking system has latest technique mo dulator to pulse the breaks. It supports driver retain steering control an d prevent w heel lockup. Fro m airbags to advanced compatibility engineering body struct ure is present for your protection.

The electronic break distribution system helps the breaking forces at every wheel according to weight present in the car.

The 2010 Honda Insight car is the comp lete p ackag e of st yle and performance.

Hydrogen Cars are Nature friendly cars If you are really want to know how nature friendly cars work, then search online. You will definitely get suitable information about hydrogen cars. They are not just helpful for maintaining environment clean but they also save money which you spend on your car fuel. Day by day, the prices of fuel increasing rapidly, hence, this alternate fuel cars are grabbing more attention and popularity. These cars have a simple meaning that is use water as fuel. So, you can easily imagine about the huge fuel savings. This is possible because these cars draw energy from water to boost your gasoline fuel economy.

People from all over the world would like to use this car. They understand the use of water as a fuel. This fuel is suitable for trucks, rockets,airplanes and even for tractors.

From the internet and books, magazines, you can take more detailed at how these hydrogen cars works and how they efficiently work on water. From the car battery, simple device electricity is used to separate water H2O into gas. It is called HHO which means two parts of hydrogen and one part of oxygen. It can produce significant levels of energy due to highly charged gas. From this whole reaction, water is remaining as a waste product. It clearly means

AUTOMARK | March-2011 33

no h a rm t o th e nature. Hydro gen ca r s s up p or t t o impro v e fuel ec o no m y . F r om younger to old er generation, everyone likes this co nce pt and start using this.

The same amount of HHO is three times more powerful than gasoline. The other interesting part about these hydrogen cars is that when energy is generated by burning gas more than three fourth is lost through fumes. The remaining gas is gone in the form of part vibrations, as unburned fuel and fuel evaporations.

With the presence of HHO, the engine starts processing the fuel differently. It helps to improve fuel work efficiency.

This fuel is totally safe. Because of the process hydrogen is produced and is simply released in the air. Currently, this hydrogen is not created from water but it is made from fossil fuels and methane.

Mostly Hybrid cars make use of this advanced technology. In this car, they use more than one type of fuel. To learn how this hydrogen cars work, many dealers provide Do it yourself kit at reasonable prices. This system is easy to install and quick to learn. To increase your car's mileage three to four times, you can use water with your current gasoline or diesel engine. It creates immense power and improves pe rformance of engine. One more advantage of water fuel is that it cleans engine very well. This technology which is used in this car is called green technology. It reduces emissions into the air and it also resulted into less amount of smog.

Apart from all this advantages, this technology has many other benefits. It not only helps for environment but it is also helps to maintain good health by keeping air clean and pollution free.

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Focus on Environment

Exclusive article by Raja Irfan Sabir

China and the Challenge of Environmental Degradation The Chinese government with the aim of developing its automobile industry and boosting the economy is quite aware of the potential threats of the environmental degradation and has taken imperative measures to control it.

As 2011 starts off, the automobile industry, a major source of innovation and economic growth, faces the ever growing challenge of environmental degradation [1] around the world and especially in China. Being the world’s largest auto market and manufacturer, China, has become the world’s largest emitter of Green House Gases, with the prediction to constitute 35% of new global energy demand in 2030, requiring it to seek ways of lowering its carbon demand and GHG emissions through d isru pt ive i nnova tion [32 ] and alternative energy [33].

The Chinese government with the aim of developing its automobile industry (through independent innovation) and boosting the economy is quite aware of t h e p ot e nt i a l t h r ea t s o f t h e environmental degradation and has taken imperative measures to control it. But the questions remains that being the world’s largest emitter of carbon dioxide and the second largest oil consumer, what alternative energy source(s) can China use to run its indu strie s (especial ly automo bil e industry). And, Why should green / alternate energy automobiles be developed?

Alternative Energy Sources: China is an active country concerned about the cl imate change and is a signatory to the Basel Convention, Montreal Protocol for the Protection of the Ozone Layer, Convention on International Trade in Endangered Species, Kyoto Protocol [2] and the Cancu n Agr eement. It h as also developed a number of policies and plans to cater the problem of climate change with regards to different sectors of the society, especially the automobile industry, the latest of which being the development of the "National Standard" for Electric Automobiles in April, 2010.

China’s National Automobile Industry P olici es and Pla ns. 2 00 4-20 10

investment in renewable energy technologies and installations have increased noticeably throughout the last decade in China, and investment in renewable is now part of China's economic stimulus strategy [3]. To promote the development of the emerging energy industries and meet the carbon emissions reduction targets of 2 02 0, t h e Na tion al E nerg y Administration (NEA) has compiled a development plan for emerging energy industries from 2011 to 2020 that will require direct investments totaling 5 trillion yuan, according to the NEA on 20th July, 2010 [4].

And to cater its increasing demand for energy, China is already using a number of renewable energy sources, i.e. (a) Hyd ro Pow er : Ch ina' s insta lled hydropower capacity has surpassed 200 million kilowatts (kW) in late August 2010. (b) Wind Po wer: China has become the world's largest maker of wind turbines in 2009 [5] (c) Solar Power: China produces 30% of the worlds solar photovoltaics (PV) [6]. (d) Bio Mass and Biofuel: China emerged as the world’s third largest producer of ethanol bio-fuels (after the U.S. and Brazil) as of the end of the 10th Five Year Plan Period in 2005 and at present ethanol acco unts for 20% of total automotive fuel consumption in China [7]. (e) Geothermal: There are more than 3,000 locations of natural hot springs distributed throughout various locations in China with forecasts to 2020 predicting that geothermal direct heating use in China will be equivalent to that of a 1,300 MW dummy power

plant running at full capacity for one year [8].

Win d Powe r Pla nts in Xinjiang, China Why should green automobiles be developed?

(Continued)……

References [1] Cars, Trucks, Air Pollution and Health. http://www.nutramed.com/environm ent/cars.htm. (Accessed 8th January, 2011). [ 2]En viro n men t o f C hin a. http://en.wikipedia.org/wiki/Environ ment_of_China. (Accessed 8th January, 2011).

[3] Caprotti F (2009) China’s Cleantech Landscape: The Renewable Energy Technology Parad ox Sustainable Development Law & Policy Spring 2009: 6-10 [4] China develops 5-tril lio n-yuan alternativ e en ergy plan. http://english.peopledaily.com.cn.

(Accessed: on 8th January, 2011).

[5] China Leading Global Race to Make Clean Energy. http://www.nytimes.com/2010/01/31 /business/energyenvironment/31renew.html (Accessed: 8th January, 2011) [6] Incentives, Falling Cost and Rising Demand in China's PV Market.

Yotam Ariel, No vembe r 13, 2009. http://www.renewableenergyworld.co m. (Accessed: 8th January, 2011) [7] Chinese development status of bi oe th an ol and bi od ie se l. http://www.worldbiofuelssymposium. com [8] Geothermal Resources and Use for Heating in China. Zh eng Keyan.

Presented at the Workshop for Decision Mak ers on Direct Heating Use of G eot her mal Resou rces in A sia, organized by UNU-GTP, TBLRREM and TBGMED, in Tianjin, China, 11-18 May, 2008.....

Technology development and heavy

AUTOMARK | March-2011 34

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Automotive Sector - Update

Auto sector concerned over likely cut in duty Representatives of automotive industry said that this decision would favour traders instead of the local industry. “Increasing depreciation limit will be an unwise move.

The automobile industry and parts manufacturers have expressed serious concerns over the likely increase in the depreciation limit for the imported used cars because it would reduce customs duty on these cars by 10 percent.

The Economic Coordination Committee (ECC) of the Cabinet in its meeting held on Tuesday considered enhancing the depreciation limit on imported used cars to 60 from 50 percent, hence further reducing the duty on import of used vehicles. However, no SRO has yet been issued.

Representatives of automotive industry said that this decision would favour traders instead of the local industry.

“Increasing depreciation limit will be an unwise move. Instead of facilitating and protecting th e local industry and encouraging more investment, the government is again favouring those working in the interest of the imported

cars lobby,” said a spokesperson for Pakistan Automotive Manufacturers Association (PAMA).

He said it was claimed that the move would help bring down car prices. It would actu ally make Pakistan a dumping ground for cars that have lived their lives, he said.

An Indu s Motor Company (IMC) spokesperson said that facilitating import of used cars would hamper investment by the local manufacturers.

Furqan Punjani, auto analyst at Topline Secu rit ies, said th at enh ancing depreciation limit would have a negative impact on the local manufacturers.

Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) Chairman Aamir Allawala said that vested interests in the Federal Cabinet had managed to get import duty reduced on used vehicles....

Pak Suzuki Motor net profit declines The net profit of Pak Suzuki Motor Company has declined to Rs 211.143 million in the year ended December 31, 2010, as compared to Rs 255.219 million earned in the corresponding period in 2009.

The company's earning per share stood at Rs 2.57 in the period under review against Rs 3.10 in the same period a year back.

The board of directors of the company in its m eeting hel d la st week recommended a final cash dividend for the year at Re 0.50 per share i.e. 5 percent.

According to the financial results sent to Karachi Stock Exchange (KSE), the company's turnover increased to Rs 42.642 billion in 2010 against Rs 26.234 billion in 2009, while the cost of sales increased to Rs 41.638 billion against Rs 25.664 billion.

The company's profit before taxation increased to Rs 668.015 million in 2010 against Rs 427.843 million in 2009.

China’s National Automobile Industry Policies and Plans 2004-2010

AUTOMARK | March-2011 35

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Automotive Inside - Exclusive Article

by Omar Rashdi from St. Patrick’s Technical Institute

Vehicle Emission Control In order to control the air pollution getting from vehicle exhaust system, automotive technology is making use of emission control system.

Pollution! It is the enormous problem to all counties even to the whole world’s environment which is not good at all.

Vehicle is also taking a measure part in making air pollution. Particles and gases released into the air from numerous sources result in air pollution. Car em issions ar e j ust one of th e contributing forces that lead to increased air pollution. The health risks associated with air pollution include some that can decrease your life expectancy and limit your ability to fully enjoy life.

In order to control the air pollution getting from vehicle exhaust system, automotive technology is making use of emission control system. The fuel never burns completely in combustion camber and then undesirable exhaust emissions are created as a result which indeed makes pollution. Undesirable exhaust emission is because of non availability of oxygen in its pure form. As air contains other gases like carbo n, nitrogen, contents of other gases also, out of which only oxygen helps in burning of fuel.

The systems used to regulate or clean emissions are shown below

Exhaust Gas Recirculation Po siti ve Cr ankc ase Vent ila ti on Catalytic Converter Air Injection Reaction Evaporative Emission Exhaust Gas Recirculation The pu rpose of the exhaust gas recirculation valve (EGR) valve is to meter a small amount of exhaust gas into the intake system; this dilutes the air/fuel mixture so as to lower the co mbustion chamber te mperature.

Ex cessive com bu stion ch am ber temperature creates oxides of nitrogen, which is a major pollutant. While the EGR valve is the most effective method of controlling oxides of nitrogen, in it's very design it adversely affects engine performance. The engine was not designed to run on exhaust gas. For this reason the amount of exhaust entering the intake system has to be carefully

monitored an d controlled. This is accomplished through a series of electrical and vacuum switches and the vehicle computer. Since EGR action reduces performance by diluting the air /fuel mixture, the system does not allow EGR action when the engine is cold or when the engine needs full power.

Positive Crankcase Ventilation The purpose of the positive crankcase ventilation (PCV) system is to take the vapors produced in the crankcase during the normal combustion process. During normal engine operation, fuel vapor and exhaust gases created in the combustion chamber leak past the piston rings (referred to as blow-by) and enter the c r a nk c as e. T h i s b l o w -b y a nd condensation if not controlled, can contaminate the engine oil, damage seals and gaskets, and eventually enter the atmosphere. These vapors dilute the air/fuel mixture so they have to be carefully controlled and metered in order to not affect the performance of the engine. This is the job of the positive crankcase ventilation (PCV) valve. At idle, when the air/fuel mixture is very critical, just a little of the vapors are allowed in to the intake system. At high speed when the mixture is less critical and the pressures in the engine are greater, more of the vapors are allowed in to the intake system. When the valve or the system is clogged, vapors will back up into the air filter housing or at worst; the excess pressure will push past seals and create engine oil leaks. If the wrong valve is used or the system has air leaks, the engine will idle rough, or at worst, engine oil will be sucked out of the engine.

Catalytic Converter Automotive emissions are controlled in three ways; one is to promote more complete combustion so that there is less by products. The second is to reintroduce excessive hydrocarbons back into the engine for combustion and the third is to provide an additional area

AUTOMARK | March-2011 36

for ox id ation or combustion to occur.

This additional area is called a catalytic co nver ter . T he catalytic converter looks like a muffler.

It is located in the e x h a u st s y s t em ahead of the muffler. Inside the converter are pellets or a honeycomb made of platinum or palladium. The platinum or palladium is used as a catalyst (a catalyst is a substance used to speed up a chemical process). As hydrocarbons or carbon monoxide in the exhaust are passed over the catalyst, it is chemically oxidized or converted to carbon dioxide and water. As the converter works to clean the exhaust, it develops heat. The dirtier the exhaust, the harder the converter works and the more heat that is developed. In some cases the converter can be seen to glow from excessive heat. If the converter works this hard to clean a dirty exhaust it will destroy itself. Also leaded fuel will put a co ating on the platinum or palladium and render the converter ineffective. This is why, in the U.S.A., all fuels designed for automobile engines are now unleaded.

Air injection One of the first-developed exhaust emission control systems is secondary air injection. Originally, this system was used to inject air into the engine's exhaust ports to provide oxygen so u nbu rned and p art ial ly-bu rned hydrocarbons in the exhaust would finish burning. Air injection is now used to support the catalytic converter's oxidation reaction, and to reduce emissions when an engine is started from cold. After a cold start, an engine needs a fuel-air mixture richer than what it needs at operating temperature, and the catalytic converter does not function efficiently until it has reached its own operating temperature. The air injected upstream of the converter supports

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International - Energy Conference

Emirates Gas LLC hosts CNG conference to promote alternative sources of energy Emirates Gas LLC (EMGAS), a wholly owned subsidiary of ENOC, the Dubai government-owned diversified energy group, hosted the first International CNG and NGV Conference at the Movenpick Hotel in Dubai. The objective of the conference was to promote the development of the Compressed Natural Gas (CNG) and Natural Gas Vehicle (NGV) Industry in the UAE and strengthen the use of alternative sources of energy in the UAE including clean fuels.

The conference was inaugurated by Her Excellency Dr. Mariam Has san Al Shenasi, Undersecretary at the UAE Ministry of Environment and Water, and provided a platform for industry experts from EMGAS, ENOC, ADNOC, Emirates Authority for Standardization and Metrology (ESMA), Dubai Police, Dubai Municipality , RTA, foreign delegates and suppliers to share their knowledge and experiences.

Saeed Abdullah Khoory, ENOC's Chief Executive Officer, said: "Identifying combustion in the exhaust headpipe, which speeds catalyst warm up and reduces the amo unt of unburn ed hydrocarbon emitted from the tailpipe.

Eva por a tiv e E mis si on s Gasoline evaporates quite easily. In the past, these evaporative emissions were vented into the atmosphere. 20% of all HC emissions from the automobile are from the gas tank. In 1970 legislation was passed, prohibiting venting of gas tank fumes into the atmosphere. An evaporati ve c ontr ol system w as developed to eliminate this source of pollution. The function of the fuel evaporative control system is to trap and store evaporative emissions from the gas tank and carburetor. A charcoal canister is used to trap the fuel vapors.

The fuel vapors adhere to the charcoal, until the engine is started, and engine vacuum can be used to draw the vapors into the engine, so that they can be burned along with the fuel/air mixture.

This system requires the use of a sealed

al ternative sources of energy an d promoting the use of green fuels is the cornerstone of sustainable development, a thrust area for the UAE. Compressed Natural Gas is the cleanest burning fuel operating today and is a viab le alternative in ensuring economically and environmentally sustainable energy use in the region."

CNG has several advantages including lower operating and maintenance costs and added safety. In addition, many vehicles are specifically designed to run on natural gas and often have greater power and efficiency.

Hesham Ali Mustafa, Senior Director gas tank filler cap. This cap is so important to the operation of the system, that a test of the cap is now being integrated into many state emission inspection programs. Pre-1970 cars released fuel vapors into the atmosphere through the use of a vented gas cap.

Today with the use of sealed caps, redesigned gas tanks are used. The tank has to have the space for the vapors to collect so that they can then be vented to the charcoal canister. A purge valve is used to control the vapor flow into the engine. The purge valve is operated by engine vacuum. One commo n problem with this system is that the purge valve goes bad and engine vacuum draws fuel directly into the intake system. This enriches the fuel mixture and will foul the spark plugs. Most charcoal canisters have a filter that should be replaced periodically. This system should be checked when fuel mileage drops.....

AUTOMARK | March-2011 37

Gas Marketing at EMGAS, presented on overview of CNG as a green fuel for transportation and highlighted the measures taken by EMGAS to advance the CNG as an alternative source of energy. He said: "ENOC has always been at the forefront of experimenting and using al te rn ativ e technologies for promoting a green and sustainable Dubai. The UAE has already embarked up on a n ag gr essi ve CNG / NG V programme and we are working towards operating our own CNG stations across the UAEin the future," he added.

CNG transportation fuel is fast becoming an alternative to traditional petrol and diesel fuels with many countries around the world pro moting its use. It is estimated that 450 vehicles in the UAE operate on CNG with 20 CNG filling stations already operational in Abu Dhabi, Al Ain and Sharjah. Also more than 11 million vehicles worldwide operate on natural gas with the Asian Pacific region having the maximum number of CNG stations and vehicles 6.6 million CNG vehicles and 8,500 CNG stations.

EMGAS first introduced CNG as a successful alternative fuel for the marine applications in Dubai more than two years ago and also worked with the RTA to introduce CNG on Abras that operate between Bur Dubai and Deira on the Dubai Creek. EMGAS also signed an agreement with Dubai Municipality to introduce CNG in all public transport.

Caption: Zaid Al Qufaidi, Managing Director of EMGAS, Dr. Mariam Hassan Al Shenasi, Undersecretary at the UAE Ministry of Environment and Water, Saeed Abdullah Khoory, ENOC's Chief Executiv e Officer and Lee Se ng, Exe cutive Director of Asia Pacific Natural Gas Vehicles Association.....

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Local Industry - Update

Irish entrepreneur offers trucks

Company also wants to set up a network of truck dealerships in Pakistan, as well as building a testing centre for used trucks. manufacturing facil ity in Pakistan Ireland’s largest dealer and distributor has travelled to Pakistan for meetings with state officials over a proposal to build a truck manufacturing facility, reports daily paper.

The paper said Robert Harris, the millionaire trucking magnate, is in neg ot iations w ith th e Pakist ani government to set up a business that would import used Irish trucks into the Asian country, to be reconditioned and sold to local companies.

Senior executives from the Harris group, Ireland,s largest truck dealer and the distributor here of Hino, Iveco and Isuzu vehicles, travelled to Pakistan last month for meetings with state officials.

Mark Barrett, its tende r manager, presented Pakistani government officials with a proposal to build a manufacturing facility.

Harris also wants to set up a network of truck dealerships in Pakistan, as well as building a testing centre for used trucks.

According to the paper, Barrett offered an initial investment of 3 million Euros.

We have been working on this for a yearand-a-half, said Barrett. We want to export used trucks from Ireland, rebuild them using local people and sell them on.

The Harris group has receiv ed the support of Naghmana Hashmi, the Pakistani ambassador to Ireland. Barrett said the proposal could not proceed without Pakistani government support.

“The ball is in their court now, he said.

A new Pakistani government policy to overhaul the industry provides that trucks should be upgraded to European quality standards.

We could do the testing. We would be open to doing it on a public-private partnership with the government, said Barrett. As for opening dealerships, we will have to see what reaction we get from the government.

Made in Gujranwala expo to promote local SMEs The Made in Gujranwala exhibition would facilitate small and medium enterprises (SMEs) to market their products at national and international level, said Fede ration of Pakistan Chambers of Commerce and Industry Regional Chairman Mian Muhammad Tariq Shafi.

The Small and Medium Enterprises Development Authority is holding the Made in Gujranwala exhibition at the Gujranwala Business Centre (GBC), Gujranwala. GBC has been recently completed by SMEDA, in collaboration with the Gujran wal a Chamber of Commerce and Industry (GCCI) for providing a shared display facility for th e Gujran wal a bas ed industries, especially the SMEs. Shafi visited the exhibition along with 15 p rom inent bu sinessp er sons.

Chaudhry Aamer Ata Bajwa Vice President, Khawaja Khawar Rashid, Manzoor-ul-Haq Malik, Tahir Malik, Osama Hass’an Yusuf, Anwaar A Sheikh and other prominent businessmen were included in the delegation, a statement said on Thursday.

Tar iq S ha fi said th at M ade in Gujranwala exhibition would allow local businesses to gain know how of the international business trends, product standards, and international trade regulatory regime.

Ata Bajwa said government should resolve energy cr is is to enhance productivity.

GBC Chairman Sheikh Muhammad Ali said the expo was meant to promote Gujranwala’s local industry at national and international level....

AUTOMARK | March-2011 38

Pakistan becomes self-sufficient in CNG kits production Pakistan has achieved self-sufficiency in manufacturing the equipments of int ernati onal sta nd ar d used in Compressed Natural Gas (CNG) sector.

“Locally produced CNG equipments are now competing with intern ational bran ds quality-wise as well as in performance in the market,” official sources said here.

In ord er to p romote in digenous production of CNG equipments, the Oil and Gas Regulatory Authority had given permission to eight companies for manufacturing and assembling of CNG C om p r e sso r s, D i sp e nse r s a nd Conversion Kits for vehicles subject to c on fo r m it y o f th e l a i d d o w n internatio nal technical stan dards.

After achieving the self-sufficiency, these companies hav e recently started to export the local ly manufactu red dispensers to Argentina and Bangladesh.

Presently, Ms/Tesla Industries Islamabad, M/s Advanced Electronic International - Karachi, M/s Global Pakistan - Lahore, M/s Comcept Pvt Ltd - Islamabad, M/s Carbon Products Islamabad, M/s Green Technology Peshawar, M/s Siddiq Sons - Rawalpindi and M/s Landi Renzo, Pakistan are operating in the country and producing Compressors, Dispensers, Priority Panels and Conversion Kits.

MoU inked to promote SME engineering industry The Engineering Development Board (EDB) a nd S mall and Med ium Enterprises (SME) Business Support Fund hav e agreed to develop and promote the engineering industries of Pakistan to make it more productive and competitive in the local as well as in the international markets.

A Memorandum of Understandin g (MoU) in this regard was signed here

by Aitazaz A Nia zi and Saqui b Moyuddin, CEOs of EDB and the Fund, on Friday. The objectiv e of the cooperation is to establish a general framework to facilitate cooperation in specific areas in order to promote development of the SMEs in engineering sector of Pakistan.....

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Automotive Sector - Update

Used cars depreciation limit raised by 10pc Pakistan Motor Dealers Association chairman H. M. Shahzad said the enhancement in the depreciation limit could cause a dip in prices of used cars in local market for end consumers.

He estimated a difference in the range of Rs150, 000 to Rs200, 000 in prices of used cars following extension in the age limit to five years followed by enhancement in the depreciation value.

The government on last week extended depreciation limits by an additional 10 per cent for assessment of duty and taxes on the imported used cars, a move that co uld lower prices of the cars but d efer red an i ncent ive p ac kag e encou ra ging investm ent i n th e automobile sector.

The Economic Coordination Committee (ECC) meeting under Finance Minister Dr. Hafeez Sh aikh enh an ced the depreciation limit to 60 per cent from existing 50 per cent. However, the decision was not made public after the meeting due to the fear of a backlash from the local auto manufacturers, a source privy to the meeting told press.

A statement issued after the meeting said only that the ECC has approved summaries of the commerce ministry seeking rationalisation of car prices in domestic market.

As per law, the government allows one per cent depreciation per month in value of used cars for assessment of duty.

Though the government extended the age limit of used cars to 60 months (5 years) in December but even still an importer could avail a maximum of 50 per cent depreciation because of the upper capping.

The new law envisages assessment of

duty to the maximum of 40 per cent of the original price of the five year old imported cars.

However, it is clear that the government fears a reaction from the local auto manufacturers who are unhappy with the decisio n to import used cars.

Th e E CC post poned tw o ot her summaries of the commerce ministry in this meeting, which dealt with a concession package for new investors in automobile sector and extension of five years facility to other vehicles instead of current cars.

Pakistan Motor Dealers Association chairman H. M. Shahzad said the enhancement in the depreciation limit could cause a dip in prices of used cars in local market for end consumers.

He estimated a difference in the range

of Rs150, 000 to Rs200, 000 in prices of used cars following extension in the age limit to five years followed by enhancement in the depreciation value.

To encourage new players in the auto manufacturing, the commerce ministry had proposed to the ECC to approve a package seeking reduction in duty to 16.25 per cent from 32.5 per cent on import of components, parts and CKD kits not manufactured locally, and 25 per cent duty instead of 50 per cent in case of components manufactured locally.

This special package was proposed for a perio d of three years to attract investm ent in th e a uto sector .

The ECC asked the commerce ministry to prepare another detailed study on the proposed pack age to identify the investors and its impact on car prices in domestic market.

Similar remarks were made on the other summary of the min is try seeking extensio n in age limit of vehicl es including trucks, buses etc for overseas Pakistanis.

According to the official statement, the ECC asked ministry of commerce to give a detailed presentation on the matter of rational ising of price s of locally manufactured cars....

Double-decker bus halts at finance ministry The much-awaited double-decker tourist bus project is yet to take off. Capital Development Authority (CDA) sent the proposal to the finance ministry for final approval to start double-decker tourist bus service in the capital.

Former CDA boss Kamran Lashari had conceived the idea. The incumbent CDA chief, Imtiaz Inayat Elahi, followed up and gave the relevant departments two weeks to come up with the terms and conditions and invite inter ested

companies to submit memorandums of understanding.

But without followin g the proper procedure the civic body has given the tender to a multinational company, said a senior official of CDA on the condition of anony mi ty . He sh ow ed h i s reservations in this regard and asked the CDA chairman not to give the contract in haste without following proper procedure.

The official told media that it was

AUTOMARK | March-2011 39

decided that the authority would float tenders for local or multinational firms.

“But th e tender was given in an objectionable manner to a company that was demanding a huge piece of land from CDA for establishing two bus terminals,” he said.

“Selecting of Ali Automobile Company does not make sense, as it does not fulfil the requirements mentioned in the advertisements published in national media for inviting proposals,” he added.

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Press Release

Skill Development Council Islamabad

Ministry of Labour & Manpower

Ministry will help out SDC Islamabad in acquiring land for building said Arif Azim Ministry will help out SDC Islamabad in acquiring land for building. Arif Azim Fed era l S ec retar y L ab our a nd Manpower Mr. Arif Azeem has said that the government will make all out efforts to provide land for the building of Skill Development Council, Islamabad so that council could be able to achieve targets by establishing its own sophisticated and well equipped training labs of technical and vocational trades.

The Federal Secretary was talking to Chairman Skill Development Council Islamabad Mian Akram Farid here on Last week during his visit to SDC Islamabad. Joint Secretary Labour & Manpower Mr. Khalid Khan Tor u, Director General National Training Bureau (NTB) Ms. Razia Zuberi and Mr. Mehfooz Elahi President Islamabad Chamber of Commerce & Industry (ICCI) were also present in the meeting. Mr. Arif Azim said that the government will request ILO and UNDP to help SDC Islamabad by providing funds to build workstation for technical trainings at its existing training labs.

A multimedia pres entation on SDC activities was also given to guests by the Director of SDC Islamabad. He said that SDC Islamabad has trained 16557 trainees since its inseption till July 2010.

He also said that SDC will double the trainees and partner institutes during the training year 2010-2011 for boosting skills and knowledge of those already in employment and those about to enter the market and take the students up to the level of working with their own projects and with professional level work flow by covering important areas like

Left to Right: Arif Azeem during a presentation along with Mian Akram Farid, Mehfooz Elahi (President ICCI)

From Left to Right: Ch. Waheed-ud-Din (SDC Board Member), Malik Muhammad Afzal (SDC Board Member) Ms. Razia Zuberi (DG NTB), Mr. Arif Azeem (Secretary Labour & Manpower), Mian Akram Farid (Chairman SDC Islamabad), Khan Abbas Khan (Ex-Board Member SDC), Murtaza Zaidi (SDC Board Member) Mr. Tariq Mehmood (Director NTB) and Mr. Aslam Bhutta (Ex-Board Member SDC)

Technical / Vocational and Management and IT. He promised that an Employment Cell will be established at SDC soon for the better placement of their trainees in industry.

Mi an Akram Farid under lined the importance of skilled wor kers in economic development of Pakistan. He said that a large number of them are needed not only within the country but their export to other countries can bring much needed foreign exchange. This is just a beginning and we have a lug way to go to boost our manufacturing sector to make it the driving force for economic growth. He discussed the future plans of SDC with guests. The task is enormous, but achiev able, with the su pport of the government and manufacturing industry. He shared the idea to develop SDC as Business Support Organi zation (BSO) with

collaboration of Chambers and Industrial Associations.

Mr. Murtaza Zaidi, SDC Board Member informed the guests that SDC is going to laun ch its ow n Manage ment Information System (MIS) in March for streamlining of SDC activities as well as track record of trainees. He also explained its features. Mr. Muhammad Afzal Malik, SDC Board Member said that SDC will provide linkage to industry and universities by establishing Resear ch & Dev el opment Center.

Reviewing the performance, Secretary Labour & Manpower and other guests noted with appreciation that SDC Islamabad has done a very good job to fill the skills gap and training needs of the country. Mr. Arif Azeem, along with Chairman SDC and other gues ts conducted a tour of SDC facilities and checked the ongoing trainings.

Arif Azeem visiting SDC training labs along with Mian Akram Farid (Chairman SDC Islamabad)

Right to left: Mehfooz Elahi, Mian Akram Farid, Arif Azeem and Khalid Khan Toru (Joint Secretary)

AUTOMARK | March-2011 40

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Car / Light Vehicle Price List

SUZUKI

HONDA

Model MEHRAN VX 800cc MEHRAN VX (CNG) 800cc MEHRAN VXR MEHRAN VXR (CNG) ALTO VX 1000cc ALTO VX (CNG) ALTO VXR ALTO VXR (CNG) SUZUKI SWIFT 1.3L PETROL CULTUS Efi VXRI CULTUS Efi VXRI (CNG) LIANA 1.3L RXI MT PETROL LIANA 1.3L RXI MT (CNG) LIANA 1.3L LE MT PETROL LIANA 1.3L LE (CNG) RAVI PICKUP ST308R VX RAVI PICKUP ST308R VX CNG BOLAN VAN VX Petrol BOLAN VAN VX CNG BOLAN VAN VTR PETROL BOLAN VAN VTR CNG SUZUKI VAN CARGO APV 1.5L GLX MT (CBU) APV 1.5L GLX CNG (CBU)

Price Rs. 464,000 Rs. 510,000 Rs. 516,000 Rs. 560,000 Discontinued Discontinued Rs. 671,000 Rs. 720,000 Rs. 1058,000 Rs. 865,000 Rs. 906,000 Rs. 1,169,000 Rs. 1,239,000 Rs. 1,160,000 Rs. 1,230,000 Rs. 488,000 Rs. 539,000 Rs. 544,000 Rs. 596,000 Rs. 604,000 Rs. 657,000 Rs. 519,000 Rs. 1,824,000 Rs. 1,899,000

CHEVROLET Model CHEVROLET JOY CNG CHEVROLET JOY Petrol

Price Rs. 569,000 Rs. 539,000

NISSAN CARS Model Sunny Ex-Saloon 1.6L M/T Sunny Ex-Saloon 1.6L CNG S. Super Saloon 1.6L M/T S. Super Saloon 1.6L CNG S. Super Saloon 1.6L A/T NISSAN S. S. Saloon 1.6L A/T CNG

Price Rs. 1,225,000 Rs. 1,305,000 Rs. 1,370,000 Rs. 1,450,000 Rs. 1,470,000 Rs. 1,550,000

Model ACCORD ACCORD CR-V CITY I-VETC MT CITY I-VETC AT CIVIC VTI Mt CIVIC VTI Mt Oriel CIVIC VTI Pt CIVIC VTI Pt Oriel

HYUNDAI

Price Rs. 5,866,000 Rs. 5,316,000 Rs. 1,324,000 Rs. 1,454,000 Rs. 1,659,000 Rs. 1,834,000 Rs. 1,779,000 Rs. 1,909,000

TOYOTA COROLLA Model XLi 1.3 VVT-i GLI 1.3 VVT-i 2.OD Std. 2000cc 2.OD SALOON M/T 2.OD SAL SUNROOF ALTIS 1.8 VVTi M/T ALTIS 1.8 VVTi A/T

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

Price 1,337,000 1,462,000 1,385,000 1,734,000 1,824,000 1,705,000 1,790,000

CHERY QQ Model

Price

CHERY QQ Petrol CHERY QQ CNG

Rs. 588,000 Rs. 628,000

LAND ROVER

DAIHATSU Model Price CUORE CX Rs. 6,85,000 CX ECO (CNG) Rs. 7,30,000 CX AUTOMATIC Rs. 7,15,000

Model DEFENDER (90 S/WJEEP STD) (110 S/W A/C) (90 Soft Top)

MASTER Price

NISSAN DIESEL TRUCKS Diesel Truck PKB 211 Diesel Truck PKD 411H Diesel Truck PKD 411E Diesel Truck PKD CD 411 Diesel Prime Mover CWM 454

Rs. 3,000,000 Rs. 4,150,000 Rs. 4,260,000 Rs. 4,600,000 Rs. 5,500,000

Price updated February 2011

Price Rs. 2,269,431 Rs. 2,545,000 Rs. 2,150,260

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Automotive Sector - Updated

by M. Iqbal Wajid Brand Manager, Fateh Motors Ltd.,

PAMA has affiliated HERO Russi Tractor Farmers have endorsed it.

The sale of HERO Russi Tractor has grown significantly in a very early age of its development as PAMA has ranked it at top-3 brands of its category Pakistan is an agriculture country which has rich and vast natural resource base, covering various climatic and ecological zones. Hence the country has great potential for producing all types of food commod ities. Agriculture h as an important direct and indirect role in ge nerating eco nomic growth. Th e imp ortance of agriculture to th e economy is seen in three ways: first, it provides food to consumers and fibers for domestic industry; second, it is a source of scarce foreign exchange earnings; and third, it provides a market for industrial goods. The booming and blooming agriculture sector of Pakistan has risen significantly, due to good crops incurred support to economical stability of farmers , though, decade bound unstable political condition has not shed its effect in the life of a common man owing to elevated inflation.

Agrarian based economy of Pakistan has given rise to some business sectors like r ea l e st a te , c on st r uc ti o ns ,

com mu ni cat ion, au t omob ile, & education.

Tractor is an automobile that yield a vital role in the efficient performance of the grower, and a high quality Tractor is time-saving and economical to the productivity of the crops.

HERO Russi has appeared a quality tractor. The company HERO Motors Limited based upon its philosophy of customer orientation is offering unique after-sal es-service facility al l over Pakistan, this offer is fiducially enough to delight the farmers and customers.

The company is offering 13 months or 1300 h our s (which ever be first) warranty.

HERO Russi Tractor has now affiliated with PAMA upon the production of HERO Russi Tractors in state-of-theart manufacturing and assembl ing facilities at the plan t situate d in Hyderabad. HERO Russi Tractors are also available on subsidiary prices of Government of Pakistan through all

commercial and a gr ic ul t ure b a n k s .

Mo re over, the company is also pre sentin g leasing facility of HE R O R u ss i Tractor to farmers on easy installments.

HERO Russi Tractors are available in three variants each of 50 hp delivers the unmatched performance according to the need of the customer. The three models of HERO Tractors are HERO Russi 500 Classic which can pull & carry the load of 8 to 9 tons, HERO Russi 500 Deluxe 10 to 12 tons and HERO Russi 500 Dabang 12 to 16 tons. HERO Russi Tractor has efficient fuel consumption as low as 3.25 liter per hour.

The sale of HERO Russi Tractor has grown significantly in a very early age of its development as PAMA has ranked it at top-3 brands of its category....

Power Policy 2002 FBR rejects EDB claim The Federal Board of Revenue has rejected the Engineering Development Board's claim that the tax authorities have not fully implemented the Power Po licy 2002, on import of plant, mach in ery, equipme nt for pow er generation projects.

Sources told local press that the EDB has received the comments of the FBR on the National Engineering Exports Develop -ment Strategy (NEEDS) developed by the EDB. According to the EDB propo sal, there was need for implementing Power Policy 2002, in letter and spirit, with no duty exemption al l ow ed on i m p or t o f l oc al ly manufactured goods as provided in the

relevant customs exemption notification.

Both the PPIB and the FBR have to ensure proper implementation of the Power Policy.

The EDB has received the FBR response which says that the Power Policy, 2002 envisaged, inter-alia, a concessionary rate of 5 percent customs duty and complete exemption of sales tax for power generation projects. However, the scope of exemption is restricted to those items, which are not manufactured locally. These concessions/exemptions are notified vide SRO 575(I)/06, dated June 5, 2006.

In the year 2008-9, the Ministry of Water and Power moved a Summary for

AUTOMARK | March-2011 42

the Economic Coordination Committee (ECC) of the Cabinet wherein it was proposed that the projects which have achieved Financial Close or expected to achieve financial close within March, 2008 may be allowed to import cooling towers, heat recovery steam generators and feed water pumps after paying 5 percent customs duty irrespective of the fact that the same are manufactured locally or otherwis e, as one time relaxation. The same was approved by the ECC and in pursuance of the ECC decision, SRO 412 (I)/2008, dated April 30, 2008 was issued, FBR response added.......

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Automotive Sector - Interview

Country lacks research and development: Indus Motor CEO Comparing the sales pattern, he commented, “I think more growth should be witnessed in small car sales, as people will prefer economical cars due to high inflation in the country. However, over the last two years, we sold more Corollas than small cars.

Poor research and development is hindering Pakistan’s growth in the automobile sector. Unlike India, Pakistan cannot experiment smaller cars like the Tata Nano due to poor res ear ch an d de velo pm en t .

In an interview with MEDIA, Indus Motor Company CEO Pervez Ghais said that Pakistan is unlikely to see such projects as a result of limited research facilities.

Speaking on the recent price hikes, Gh ais c laimed his co mpa ny increased car prices by only seven per cent in the last 28 months.

“Looking at an annual increase of 3.5 per cent, I must say the increase is justified, he said. “ I t a n n o ys m e w h e n t h e government claims our cars are not in reach of the common man, becaus e we target the niche market, not the common man. Our customers are ready to pay for quality products, as they know they will not be cheated,” he said, defending the company’s pricing policy.

He added that Daihatsu Cuore was known for its quality, which is the reason for its comparatively high price, and said the company is producing 210 cars per day at full capacity.

Speaking on the issue of new entrants in the industry, he said that automobile manufacturers will only come to Pakistan when they are o ff ere d c on s i st en t a n d con du cive policies. “No new

manufacturer will enter the industry when he sees inconsistent policies,” he said.

Elaborating his point, he explained that companies like Toyota make long-term plans, which require consistent government policies.

“You see foreign investors have wide range of choices to invest in any country but they will rarely invest in markets where they see inconsistent policies,” he said.

On the policy regarding import of five-year-old cars, he believes it will hurt the local industry, but not as much as expected, as the percentage of imported cars in the market is limited to just five per cent.

Ghais highlighted the significance of manufacturing, saying populous coun tries like Pakistan need manufacturing-based economies.

“There is noth ing wrong with trading but Pakistan does not have a choice – it needs to choose either manuf-acturing or trading as the ec o n o my’s b a s e,” h e s ai d .

However, he asserted that Pakistan offers strong investment scenario

for carmakers, as the population is rising and energy and governance issues are likely to improve soon.

Mr. Pervez Ghais Giving an CEO Indus Motors example, he said, “Toyota, for example, has increased its equity share from 25 per cent to 37.5 per cent in just two years.”

When questioned on imported cars, he replied that local cars were not inferior compared to imported ones in terms of performance. “Our quality is not inferior and one can compare our quality and prices with top brands in regional countries,” he said.

Comparing the sales pattern, he commented, “I think more growth should be witnessed in small car sales, as peo ple will prefer economical cars due to high inflation in the country. However, over the last two years, we sold more Corollas than small cars – which is not a healthy sign because it represents short-term growth.”

“There is nothing wrong with trading but Pakistan does not have a choice – it needs to choose either manuf-acturing or trading as the economy’s base,” he said.

AUTOMARK | March-2011 43

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www.automark.pk

magazine@automark.pk

March-2011

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Construction Machinery

Launched in Hyderabad

Case Construction Dealer M/s. Rastgar Launched Backhoe in Hyderabad, Pakistan

A large gathering of civil contractors, leading landlords an d office rs of agricultural departments attended the CASE back hoe launch at Nerun Kot Qasimabad, Hyderabad.

Mr. Maqsood, CEO of Rastgar, gave an introduction of their businesses carried out by their group in Pakistan. He assured to the gathering that his company is fully capable and equipped in every respect to provide an exquisite after sales service, spare parts and training support to the buyers of CASE machines in Pakistan.

Mr. Mansoor Rizvi, Country Manager of CASE NEWHOLLAND, gave an exhaustive presentation on the machine.

He appreciated the efforts of M/s.

Rastgar towards the introduction of

CASE mach in es in Pakistan. Mr. Mansoor said that CASE backhoe loaders are one of the most useful multipurpose machinery available today for construction workers, farmers and other contractors. While highlighting the diversities of this machine, he said that it can work like a medium size crawler excavator, wheel loader and small dozer besides other application like as handling of construction material, hammer applications and as a post hole digger.

Mr. Imtiaz Rastgar, Chairman of Rastgar group, thanked the participants and stressed the need of go od quality construction equipments in Pakistan.

He said many new projects of high importance such as coal , marble , oil and gas are emerging in the country

AUTOMARK | March-2011 45

which will heavily require new quality construction equipments to achieve quality results with reduced downtime.

Explaining the reason to select back hoe first to start the marketing campaign , he said, during the visit of India he has seen an extensive use of this machine there, which is locally produced by CNH and sold in thousands every year in India.

A demonstration of CASE backhoe was conducted by the engineers of M/s.

Rastgar who had exhibited the various functions an d capabil ities of th e machine. The participants showed great interest in it.

In the end, guest were served with sumptuous lunch.....

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Workshop - Energy Conservation and Safety Standards

By Asif Masood, Chief Technical Officer ENERCON/ ECF

Globally Accepted Practices for the Promotion of Energy Conservation and Safety Standards in Different CNG Applications ENERCON along with ACE Energy (Pvt) Limited jointly organized a Workshop on Globally Accepted Practices for the Promotion of Energy Conservation and Safety Standards in Different CNG Applications on 17th February, 2011 at M arriott Hotel, Islamabad . T he Workshop was of special interest to concerned Regulatory A uth orities/Dep artm ents, OMCs operating or hosting CNG outlets at their petrol pump sites and CNG Association Members. Mr. Farid Ullah Khan, Managing Director, ENERCON and Syed Ahm ed Masood, Managing Director, ACE Energy (Pvt) Limited., has given details of the workshop. The workshop was also attended by H.E Rodolfo Martin Saravia Argentinean Ambassador, while Federal Secretary for Environment graces the occasion.

Pakistan’s energy mix is h ighly dependent on oil and gas. It has to spend around US$ 10-12 billion a year on import of crude oil and deficit petroleum products, mainly diesel and furnace oil.

Pakistan is workin g on policies to substitute liquid hydrocarbon fuels with natural gas in a bid to cut down its im port bill and to impr ove the environment.

Pakistan has been lucky to have a number of natural gas discoveries in the past 2 to 3 years with an output potential of more than 1 billion cubic feet of gas per day within the next 4 to 5 years. The government is encouraging fast-track development of these discoveries through different incentives to bring the additional gas in the national pipeline network.

Compressed Natural Gas (CNG) is a substitute for gasoline (petrol) or diesel fu el. It i s considered to be an environmentally “Clean” alternative to those fuels. It is made by compressing methane (CH4) extracted from natural gas. Argentina and Brazil are the two other countries with the largest fleets of CNG vehicles. The Compressed Natural Gas (CNG) sector of Pakistan by end of 2009 has attracted over Rs 90 billion investments during the last few years as a result of liberal and encouraging

From left Mr. Farid Ullah Khan, MD, ENERCON, Mr. Khawaja M. Naeem, Federal Secretary for Environment, H.E Rodolfo Martin Saravia Argentinean Ambassador and Syed Ahmed Masood, MD, ACE Energy (Pvt) Ltd.,

policies of the government.

Presently, around 3,105 CNG stations are operating in the country in 85 cities and towns. It has provided employment to above 30,000 people in Pakistan.

Over 3 million vehicles were converted to CNG as of end 2009, showing an increase of 35 percent yearly. All Pakistan CNG Association (APA) confirms that CNG stakeholders have invested Rs.90 billion in this sector and another Rs 20 billion investment is in pipeline. The CNG consumers had invested around Rs 60 bil lion in converting their vehicles to CNG. The CNG was replacing at least 6.12 billion liters of petrol every year and saving foreign exchange to the tune of billions of dollars.

G overnment’s p etroleu m p ol icy encourages use of compressed natural gas (CNG) as transport fuel to replace petrol as well as diesel oil, to provide natural gas to thermal power plants using furnace oil, and to increase local production and import of liquefied petroleum gas (LPG) to replace kerosene and fuel wood.

CNG is a highly environment friendly motor fuel for improving ambient air quality. It is lead-free fuel with negligible sulphur and particulate emissions.

Carbon monoxide emissions are only one tenth as compared to petrol. It also produces much lower carbon dioxide emissions as compared to petrol and diesel oil. It thus helps in keeping our

AUTOMARK | March-2011 46

environment clean pollution free and also in mitigating global warming effect caused due to greenhouse gas emissions of carbon dioxide. Chemically it normally consists of, propane and butane, over 90 percent methane with smaller amounts of ethane, carbon dioxide and other trace gases. The high methane content gives natural gas a high octane rating (120-130) and clearburning characteristics, allowing high engine efficiency and low emissions.

Federal Government plans to formulate strict and stringent standards for related emissions to keep our cities and roads clean for the sake of ourselves and our future generations. With increasing population of CNG stations in the country w e need to h ave safety parameters in different application.

Safety Aspects are also very important.

The Directorate General of Gas in the Ministry of Petroleum & Natural Resources and the Chief Inspector of Explosives are lookin g after the standards and safety issues related to CNG conversion, dispensing and use.

The HDIP provides technical support for safety, inspection, standardization and certification of CNG machinery and equipment and cylinders under Pakistan CNG Rules, 1992. There is a dire need t o imp lement p racti ces for t he promotion of Energy Conservation and Safety Standards in Different CNG Applications to avoid any un-toward incidence...

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Automotive Sector - New Arrival

Press Release by Hinopak

Launching Ceremony of Dutro Jr. and Gb bus at Hino Karachi

H ino p ak Mo tor s Li mi t ed , t h e progressive manufacturer and assembler of Hino trucks and buses in Pakistan recently introduced the new Hino Dutro Junior (4x2) and Hino Gb Bus to its customers in a graceful Launching Ceremony held at Hino Karachi.

(Hinopak’s 3S dealership).

Mr. Takeshi Ito, DMD , Hinopak w elcom ed a nd t ha nked all th e distinguished and honorable guests present in the ceremony. In his address he said the introduction of Hino Dutro Junior and Gb Bus fulfils customers requirement specially in LDV segment.

He highlighted that we are confident that newly introduced LDV truck and buses would be beneficial in terms of profitability due to product quality, its better fuel efficiency, low maintenance cost would be and additive edge of these vehicles in the commercial market.

Speaking on the occasion, Mr. Hideya Iijima, Managing Director, Hinopak said

that he feels very proud that we are introducing Dutro Junior & Gb Bus to fulfill our customers requirement. He highlighted that Dutro Junior truck for int ra-c ity g oods tra nspor tat ion movement designed especially for Light Duty segment to fulfill the requirements of drivers and owners of this segment.

However, in bus segment Hinopak is introducing Gb bus for small distance passengers movement that will cater with proven Hino quality, durability and reliability.

Mr. Abbas Saifuddin, Chief Executive, Hino Karachi assured strong product support to Hino vehicles on behalf of dealership.

Chief Guest of the occasion was Mr. Mohammad. Hussain Syed, DO(General Administration) CDGK. In his address, he appraised the efforts of Hinopak in promoting new and safe technologies in the transport sector. He congratulates Hinopak for launching Hino Dutro

AUTOMARK | March-2011 47

Junior an d Gb bus, the u ltimate requirement of LDV segment. He also appraised Hinopak and its staff for their contribution in CDGK CNG bus project by offering reliable and quality buses for the citizens of Karachi.

Mr. Shahab Anwar, DGM Sales and Business Development, Hinopak in his address said that the induction of Dutro Jr. and Gb bus in our portfolio would provide complete range of vehicles for our valuable customers. He highlighted that it is the confidence and our customers support we have introduced these Light Duty Vehicles in order to cater the needs of our valued customers.

The ceremony was attended by various dignitaries from different walk of life, customers, etc.

A large of number of transporters inspected the vehicle and appreciated Hinopak’s efforts for providing solutions to the local transport industry especially in LDV segment for city operations.......

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Exhibition & Conference - Update

Press Release

Business Delegation of Pakistani Companies visited Korea for Construction Related Exhibition & Meetings Pakistani trade delegation organized by KOTRA Karachi consisting on eight delegation members belonging to prominent Pak is tan i designing & constr u ction c omp anies vi sited HOMDEX 2011 exhibition & attended business meetings from 9th to 12th Feb 2011.

KOTRA Karachi organized this business delegation; a Foreign Trade Mission & government Agency of the Republic of Korea affiliated to the Embassy and engaged in promotional activities for the bilateral trade an d investment between two countries.

The main purpose of this delegation was to provide an opportunity to Pakistani construction related companies for indiv idual business me etings and exploring the high-tech construction, designing, alternative solutions & low cost housing industry.

Delegation members were, Atif Inam Osmani Director of Osmani & Company, Mr. Syed Khurram Bukhari Director of Ahbab Associates, Mr. Muhammad Asim Farooqui Director Safia Trade, Mr. Ahsan CEO of Stereo Electronics, Mr. Muhammad Afsar Ali Director of HiTech Alter nate Ener gy Syste ms, Muhammad Mansoor Ahmed Director of Lakhpati Associates & Mr. Asmat Ullah Director of Asmat Brothers. Mr. Muhammad Rehan Hashmi, General Manager, leaded this Trade delegation & represented KOTRA Karachi at this forum.

The construction industry of Pakistan is g row ing r apid ly i n term s of in novation, low cost housing, and alternative solutions for houses, thus this delegation was aimed to provide the chance for the enhancement of mutual business cooperation & in transfer of technology, joint ventures, technical collaborations & allocation of new suppliers for boosting & upgrading the local construction industry.

Korea is among prominent and reliable machineries manufacturers of the world and also a global hub of vario us machineries.

Delegation members were keen and enthusiastic to explore the Korean market. During this business tour the delegation members attended exhibition & individual business meetings in COEX

Hall Seoul. Several delegation members visited the site/factories regardless from the cold weather which touched -10 ‘C during their visit. Mr Atif Osmani Dir ect or of Osma ni & Co wa s interviewed by the Korean News Channels & by Korean print media.

Overall the visit of Trade Delegation proved extremely useful from the standpoint of delegation members in developing business ties with the Korean counterpart, visiting their facilities to have a first hand knowledge of their product and manufacturing techniques and above all changing mindsets of our entrepreneurs to embrace modern technologies for producing world market products.

Exhibitors from Pakistan negotiate business deals Pakistan exhibitors have negotiated business deal s at world’s leading i nt ernat ional tr ad e fair of th e automobile industry “Automechanika”, held from 14 to 19 September at Frankfurt, Germany.

According to Trade Development Authority of Pakistan (TDAP), a large number of buyers visited Pakistan Pavilion which was placed at prime location in the fair.

They took keen interest in the products put on display, appreciated their high quality and negotiated business deals

with Pakistani exhibitors.

TDAP has arranged the participation of Pakistani exhibitors and reserved 200 square meters of space for Pakistan pavilion in which 16 comp an ies displayed a wide range of products which included hand brakes, silencer, sil pump gears, tube co nnectors, suspension parts, engine mounting, automotive rubber hoses, gears, shafts, condensers, radiators, door moldings, aluminum parts, tractor parts, hydraulic lifts, engine casings, hub sets, etc.

About 4,486 exh ibito rs from 76

AUTOMARK | March-2011 48

countries participated in this event. Out of these 80 percent came from abroad.

The event was attended by 150,000 visitors from 140 countries TDAP said that Pakistani exhibitors have expressed their satisfaction on the arrangements made by TDAP and our mis sion.

TDAP hoped that participation in this event will go a long way in promoting exports of automotive parts not only to Europe but to other regions of the world....

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MADE MADEIN INPAKISTAN PAKISTANMOTORCYCLES MOTORCYCLES PRICE LIST LIST RETAIL PRICE

70cc Motorcycle

Sr./ No. 1.

2.

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5.

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9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

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

Retail Price Rs. 42,500/= Rs. 41,000/= Rs. 39,000/= Rs. 39,500/= Rs. 40,000/= Rs. 47,000/= Rs. 39,000/= Rs. 39,500/= Rs. 41,000/= Rs. 39,900/= Rs. 46,000/= Rs. 47,000/= Rs. 41,000/= Rs. 64,500/= Rs. 40,000/= Rs. 40,500/= Rs. 38,500/= Rs. 38,500/= Rs. 38,000/= Rs. 38,500/= Rs. 42,900/= Rs. 40,000/=

Sr./ No. 23.

24.

25.

26.

27.

28.

29.

30.

31.

32.

33.

34.

35.

36.

37.

38.

39.

40.

41.

42.

43.

44.

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

Retail Price Rs. 42,500/= Rs. 47,000/= Rs. 43,000/= Rs. 39,000/= Rs. 39,000/= Rs. 42,500/= Rs. 39,000/= Rs. 40,000/= Rs. 39,000/= Rs. 39,900/= Rs. 41,500/= Rs. 42,400/= Rs. 39,500/= Rs. 40,500/= Rs. 40,500/= Rs. 45,000/= Rs. 39,500/= Rs. 39,500/= Rs. 41,000/= Rs. 42,000/= Rs. 40,000/= Rs. 40,500/=

Price updated Feb-2011

AUTOMARK | March-2011

51

AUTOMARK MAGAZINE

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MADE IN PAKISTAN MOTORCYCLES PRICE LIST

125cc Motorcycle No. 1.

2.

3.

4.

5.

6.

7.

8.

Brand & Model Name Habib HB-125 Sitara ST-125 Super Star SS-125 Hero RF-125 Honda CG-125 STD Honda CG-125 DX Metro MR-125 Ravi Storm-125 Euro II

Retail Price Rs. 88,000/= Rs. 55,000/= Rs. 54,000/= Rs. 75,000/= Rs. 86,500/= Rs. 109,900/= Rs. 55,500/= Rs. 78,000/=

Yamaha Motorcycle Product & Sr./ Model Name No. 1. Yamaha YD100 2. Yamana Yama4 3. Yamaha YB100 Royale

Retail Price Rs. 75,000/= Rs. 71,100/= Rs. 72,000/=

100cc Motorcycle No. 1.

2.

3.

4.

5.

6.

7.

8.

Brand &Model Name Asia Hero AH-100 Ghani GI-100 Habib HB-100 Honda CD-100 Sitara ST-100 Super Star SS-100 Super Power SP-100 Unique UD-100

Retail Price Rs. 50,000/= Rs. 45,500/= Rs. 55,000/= Rs. 73,900/= Rs. 51,000/= Rs. 48,000/= Rs. 55,000/= Rs. 60,000/=

Suzuki Motorcycle Sr./ No. 1.

2.

3.

4.

5.

Product & Model Name Suzuki Sprinter ECO Suzuki Sprinter STD. Suzuki GS-125 Suzuki GS-150 Suzuki Shogan

AUTOMARK | March-2011 52

Retail Price Rs. 69,000/= Rs. 72,000/= Rs. 81,000/= Rs. 88,000/= Rs. 76,000/=

AUTOMARK MAGAZINE

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