Monthly Automark Magazine May 2018

Contents

Inside

May-2018

News / Event

Article / Review 17 20 25 26 28 32 42 44

18

First International Agricultural Exhibition Agritech 2018 in Lahore The All-new PRINCE Glory 580 SUV Launched by Regal Automobile in Pakistan Exclusive review by Sarim Raza United Bravo vs Suzuki Mehran Competition or No Competition?

Exclusive Article by Automark Car assemblers come under fire for price increases, low standards, and cartelisation Article by Automark

24

Heavy Weights Entered In Light Commercial Vehicle Segment Exclusive Article by Anwar Iqbal How Far Online Motorcycles Sales go with CPEC – Hard Facts & Figures with Ideas to Make it Work

By Kaptain Mirza

Ghandhara Nissan rolls out locally assembled JAC X200 pickup in Pakistan

By Hanif Memon

30 39

Growing SMEs under China Pakistan Economic Corridor (CPEC)

First International Agricultural Exhibition Agritech 2018 in Lahore Exclusive Coverage by Automark

An Exclusive interview with M. A. Khalid, DGM Sales & Marketing Regal Automobiles Industries Limited

By Hanif Memon Master Motor introduces Yutong-Master Double Glass Bus for Pakistan’s market

By Hanif Memon

40

Ghandhara Nissan and Nissan Motor Company plan to invest $41 million to assemble Datsun models

43-49

My Karachi Exhibition Media Coverage by Automark

Pakistan Auto Industry & Impact of New Auto Policy on Pakistan Auto Industry

By Engr. IH Tariq Farooqui ME, PE

News Updates 31 34

Master Motors Awarded Greenfield Status to produce Changan vehicles in Pakistan Corporate news

47

International Automotive News

52

Vehicles / Car Price List

56

Motorcycles Price LIst

Please keep visit our website for daily updated articles, news and videos

May-2018 Pakistan’s premier magazine on automotive, engineering & energy sector Volume 11, Issue 05

Monthly

AUTOMARK Magazine International Editor-in-Chief Muhammed Hanif Memon Technical Editor Muhammad Shahzad

Advertising Manager Tahir Siddiqui

Circulation Manager Hasaan Mustafa

Graphic Designer Mustafa Hanif Salman Hanif

Web Master Murtaza Hanif

Contributors in THIS EDITION M. Owais Khan IHT Farooqui Anwar Iqbal Kaptain Mirza M. Hanif Memon Ali Hassan

Advisors Imtiaz Rastgar CEO, Rastgar Group & CBI External Expert, Ex-chairman EDB Islamabad Anwar Iqbal Chief Executive Officer Silver Seal International Karachi Syed Mansoor Rizvi Principal Officer M/s. CNH Services (Pvt) Ltd. Karachi Engr. IHT Farooqui Chief Operating Officer Pak China Motors (Pvt) Ltd. Karachi Nadeem Ahmed Salmi Executive Director Operations M/s. Al-Haj Faw Motors (Pvt) Ltd. Karachi

Active Communications Mailling Address: D-68, Block-9, Clifton, Karachi Mobile: 0321-2203815

E-mail: automarkpk@gmail.com website: www.automark.pk Whatsapp & Wchat : +92 321 2203815

AutoMark Canada Office Managing Editor Mohammad Shahzad S.A.E. D.M.P. 41 Jordana Drive Markham (Toronto) Canada - L3S 3N8 Phone: 905-472-8282 Email: automarkcanada@gmail.com AutoMark REGD: MC-1330 Published every month by M. Hanif Memon

Vehicles in Karachi running on substandard engines and fuel The seminar on pollution-free transport was held in Karachi on last month. Participants of a seminar were informed that owing to absence of any fitness inspection system, commercial motor vehicles in Karachi have been brazenly using fuel and engine systems, which don’t even comply with the bare minimum international and national environmental standards.

The speakers on the occasion said that Karachi lacked the very basic infrastructure, which could help the concerned authorities reverse the alarming phenomenon of air pollution as the city direly needed air quality monitoring, mass transit and vehicles’ inspection systems to protect its environment.

They said that with very basic environmental control and monitoring systems missing in the city since long, there was no surprise that Karachi had been placed among the five most polluted cities in the world. The speakers including concerned academics and environmentalists lamented that the city on one hand had been far from building a proper mass transit system while on the other hand commercial goods and passenger vehicles being plied on roads of Karachi brazenly violated national and international environmental control standards.

The operators of commercial motor vehicles should be bound to meet environmental specifications with regard to engine systems and fuel requirements of buses and trucks as negligence on these counts should be strictly checked and penalised under the policing system, said the speakers.

The speakers opined that air pollution would bound to increase in Karachi unless and until a system was in place to check roadworthiness of both commercial and private motor vehicles, which had been a regular and compulsory feature in any other metropolitan city in developed part of the world.

As per the international standards, a metropolitan city like Karachi should have started the planning to build a mass transit system way back when its population had crossed the 10 million mark.

Karachi had been witnessing an annual growth rate of 4.5 percent of registration and use of new motor vehicles in the city. “But neither roads of the city are vehicle-worthy nor our vehicles are roadworthy as in such a situation, the air and other forms of pollution is bound to increase in Karachi.

Note: The views expressed by contributing writers and comments do not necessarily reflect the views and policies of the Monthly AutoMark magazine's management

Monthly AutoMark International

AgriTech2018 - Lahore

First International Agricultural Exhibition Agritech 2018 in Lahore A two-day exhibition focused on promotion of high tech machinery in the field of agriculture to boost crop yield and improve farmers’ efficiency organised by the Punjab agriculture department at Expo Centre in Lahore on 6 – 7, April-2018.

Governor Punjab Rafique Rajwana inaugurated the expo whereas Secretary Agriculture Punjab Captain Rtd. Muhammad Mahmood, Honorable Ambassador of the Republic of Italy to Pakistan Stefano Pontecorvo, Higher officials of Agriculture department and large number of local and foreign agricultural machinery manufacturers and agriculturalists from all over the Punjab participated in the exhibition on first day of inauguration.

Ravi Agric from Lahore displayed Clhhs from Germany, Orient Energy Systems and other companies presents high tech agriculture equipment during exhibition while large number of farmers and related people across the Punjab visit the event.

A green revolution in making Addressing the gathering at Inaugural ceremony, Governor Punjab Rafique Rajwana said that he was much pleased to participate in the expo and c o n g r at u l a t e d t h e A g r i c u l t u r e Department of Punjab Government on holding the first ever agri tech expo and appreciated their efforts to improve agriculture sector through mechanization and adapting latest trends in crops management.

The Governor also highlighted various initiatives of the government to facilitate farmers community such as Kissan package, subsidies on electricity and fertilizers and by providing better quality seeds to increase crop yield. He vowed to continue the farmer friendly Agri development policies if his government is elected again in next general elections.

Rafique Rajwana also acknowledged the participation of foreign companies in

agri tech expo and urged the foreign investors to invest in agriculture sector.

He assured them of full government support in order to revamp the entire agricultural landscape of country with help of latest machinery.

Governor Punjab then distributed prizes among the winners of agri yield competition. He also listened to the complaints of farmers and assured them of relief on priority. He also visited various stalls and appreciated the industry representatives for their contribution towards modernizing the agriculture system.

Republic of Italy to Pakistan Stefano Pontecorvo said that Italy was the biggest exporter of high-tech agriculture machinery in the world and assured his full support to the Government of Punjab in this regard.

Mr. Bernd Ludewig, CEO BU Sales and Marketing and Regional President Eastern Europe for CLAAS group delivered information to the participants about Agriculture Mechanization and Modern Techniques and expressed his company’s interest in investing in agri sector.

Agri Development top on agenda

A competition was also organized between farmers to yield maximum output of selected crops including cotton, rice, potato, mango, orange and guavas. Farmers from all over the province participated in the competition and winners were awarded honorary shields and high-tech machinery prizes.

Secretary Agriculture Punjab Captain Rtd. Muhammad Mahmood said that Punjab Govt had devised a Rs. 2 billion development plan for the digitalization and mechanization of agriculture sector through public-private partnerships to sustain the current growth trajectory in Punjab and further boost it through high-tech machinery for farmers. He further added that agri-tech expo was a great opportunity for the agriculture machinery importers, exporters and farmers community to meet up and explore new arenas in the field to boost the per acre yield.

He said that the objectives of this exhibition were to promote high tech mechanization of agriculture and also tell the farmers how to use it at farm level and how it can prove to be a game changer in the arena of agriculture.

Mahmood said that promotion of high tech machinery was the top agenda of Punjab government with a vision to equip farming community with latest technologies and machinery in order to save farmer’s time, energy and input cost. He further stressed the need of latest mechanized farming methods to sustain the agricultural ecosystem and also protect farmers’ production from past-harvest losses.

The Honorable Ambassador of the

Agri yield competition

High Tech Farm Mechanization Centers On this occasion, a MoU was also signed betw een Fa tima Fer tili zer an d Government of Punjab regarding Digital Ag riculture & High-Tech Farm Mechanization Service Centers. On these centers, farmers will get high tech mechanized services and equipment on rental basis. These centers will also provide guidance to farmers in order to fully avail the latest equipment.

Two-day agri tech exhibition features a display of more than 100 stalls by local and international manufacturers along with awareness seminars and training session for agriculturalists to sensitize them with latest trends in Agri Technology to improve their crops output.

Editorial team of Monthly Automark magazine specially flew from Karachi and attend this important event and had media coverage for magazine and had done social media updates regularly during events days.

www.automark.pk | May-2018 | Page 17

AGRI TECH2018 AGRICULTURE EXHIBTION LAHORE 6-7 MARCH

www.automark.pk | May-2018 | Page 18

EXCLUSIVE MEDIA COVERAGE BY AUTOMARK MAGAZINE

www.automark.pk | May-2018 | Page 19

Exclusive Review by Syed Sarim Raza for Automark

The All-new PRINCE Glory 580 SUV Launched by Regal Automobile in Pakistan

s

Starting a new era of highperformance SUVs in Pakistan, the Regal Automobile Industries has launched its PRINCE Glory 580 SUV that boasts some stunning features and technologies. Much to the delight of SUV enthusiasts in Pakistan, the Glory 580 features exceptional performance features, state-of-the-art technologies and a stylish design. Glory 580 is a modern-day SUV that is all set to take on its competition in the closely contested SUV segment of the Pakistan car market.

Glory 580 has an aerodynamic and appealing appearance that instantly grabs the attention of the onlookers and makes it a sight to behold. It is also a perfect family vehicle, thanks to a large number of advanced safety features offered as standard in the Glory 580. It is a 7-seater stylish SUV that thrives on its turbocharged engine and CVT transmission for a flawless ride

regardless of the driving conditions.

Exterior

Glory 580 is a stunner when it comes to design and aesthetics and exhibits a traditional yet commanding style statement. With an elegant stance made possible by an edgy and agiledesign, the Glory 580 is expected to be a big hit amongst the Pakistani car buyers for its stunning good looks. The front fascia of the SUV featuresa stylish grill withbrand’s badge placed in the center.

The front-grille is flanked by Lion-eye shaped LED headlights with Daytime running lamps that are beautifully sculpted to complete the aggressive appeal of the front end. With a wide wheelbase of 2780mm, the Glory 580 featur es 17-inch alloy rimsthat accentuate the aggressive appeal of the SUV. The craftsmanship and subtlety of the design flow through the whole body towards rear-end that features sharp Dual C-shaped tail-lamps.

Interior

Besides having a subtle yet aggressive exterior, the true highlight of Glory’s design is its interior. Delicately poised to welcome its o ccupants with contagious warmth, the interior of Glory 580 is an epitome of sheer design excellence, finesse and technological brilliance. The cabin boasts a luxury appeal with an intelligent instrument cluster, leather upholstery, Dual electronic AC, ample leg room and head room for occupants and an advanced 10-inch HD LED with cell-phone connectivity feature.

The interior of the vehicle has been built around the driver featuring engine push start button, a leather-wrapped multifunctional steering wheel and a smart information display behind the steering wheel. The Glory 580 has been designed to be ergonomic and spacious and can easily accommodate seven occupants while also offering enough space to carry language on holiday trips and weekend

www.automark.pk | May-2018 | Page 20

continued on next page

Monthly AutoMark International

Budget 2018-19

Finance Minister Miftah Ismail presents Budget 2018-19

Customs duty on import of electric cars cut to 25%

In line with the world trend that is rapidly shifting towards environmentfriendly electric cars, the government of Pakistan on Friday announced some facilitation measures to cut costs and encourage the use of such clean vehicles in the country.

This came at a time when several new players were gearing up to enter the auto industry of Pakistan by taking advantage of the auto policy announced in 2016.

“To promote environment-friendly electric vehicles, an enabling fiscal environment for related infrastructure is necessitated. It is, therefore, proposed that 16% customs duty on charging stations for electric vehicles may be withdrawn,” announced Finance M inist er Mif t ah Isma il duri ng the budget speech for fiscal year 201819.

“Customs duty on the import of electric cars is proposed to be reduced from 50% to 25%, in addition to exemption from 15% regulatory duty.Import of CKD (completely knocked down) kits for the assembly of electric cars in the country is proposed at 10%,” he said.

These measures are in addition to the incentives already announced in the Auto Development Policy for 2016-21 that has been widely praised.

Kia, Hyundai and SsangYong Motor Company of South Korea, Germany’s Volkswagen, France’s Renault and Japan’s Nissan have announced plans and formed partnerships to enter Pakistan’s auto market, most probably in the next one year.

Local importers like United Motors and Sazgar, the manufacturers of two-wheel and three-wheel vehicles, have also made plans to enter the country’s lucrative four-wheel industry.

Market talk suggests that a new entrant is aiming to introduce electric cars and the government’s budget measures are also expected to encourage existing manufacturers to enter this arena.

“Electric cars are the future of the auto industry,” remarked Wasif Safdar, who imports used cars for resale.

He said a few used Nissan Leaf electric cars had already been brought to the Karachi port, but because of high duty, their importers defaulted on payments

and the cars were later auctioned. “If electric cars have 0cc engine capacity, then how could customs duty be imposed on them,” he asked.

Customs duty slabs for imported cars are defined on the basis of their engine capacity. All Pakistan Motor Dealers Association Chairman HM Shahzad welcomed the budget measures, terming them positive. “No change has been made for the import of used cars and the business will go on as before,” said Shahzad.

getaways with friends and family.

the performance capabilities of the vehicle considerably.

• Electronic Stability program • Child lock • Electronic Brake Assist • Electronic Parking Brake • Anti-lock Braking System • Electronic Brake force Distribution • Parking Camera

Performance

PRINCE Glory 580 is also a performance-oriented vehicle that leaves no stone unturned when it comes to providing a breathtaking driving experience even in the most challenging driving conditions. It has been equipped with a 1.5-litre turbocharged engine paired with a CVT transmission that generates 147 horsepower and 220Nm of torque. These figures are exceptional and make Glory 580 a high-performance SUV, which will help it become a strong contender in the SUV segment of Pakistan car market. The fuel tank capacity of the vehicle is 58-litreswhile not much has been revealed about the fuel efficiency of the vehicle. Building up immense hype around this SUV is also its state-of-the-art MacPherson Independent Suspension that adds to

Safety Features

What sets the PRINCE Glory 580 apart from its competition is the availability of a plenty o f advanced safety technologies as standard. Glory 580 is an absolute standout in the segment for its amazing safety systems and driverassisting technologies that make every ride with the PRINCE Glory 580 completely safe regardless of the driving conditions.

Here are the safety features offered as standard in the PRINCE Glory 580

• Four Airbags • Tyre Pressure Monitoring System

Opposition challenges legality of new budget Importers of used cars were a bit uneasy before the budget speech, fearing the government might take some adverse steps.

A few months ago, the government had restricted the import of used cars in an effort to ease the pressure on foreign exchange reserves. However, when thousands of cars were left stranded at the port, the government was forced to revisit its decision and things returned to normality later.

Price and Availability

The PRINCE Glory 580 has been launched in the Pakistan market and it can be booked with a 4-month delivery time.

It has been priced at PKR 3,250,000, which is slightly expensive for a new entrant to the market, however, considering the exceptional performance capabilities and advanced technologies offered as standard, the price-tag is completely justified.

www.automark.pk | May-2018 | Page 21

Exclusive Article on Auto Industry by Team AM

Deep economic crisis hits bike sales Pakistan too far from electric cars and bikes

Nearing end of five year tenure of the c urr ent f eder a l a nd pro vincia l governments, change of weather especially in southern region including Karachi, 10 per cent rupee depreciation against the dollar in the last four months, reports of exchanging data between China and Pakistan and dull business environment ahead of new Budget have created uncertainty in the bike market all over Pakistan especially in Karachi.

The Akbar Road, main hub of bike sales in Karachi, has been facing dearth of buyers for Chinese bikes mainly and over 100cc bikes but Honda sales have so far remained brisk.

Chairman Association of Pakistan Motorcycle Assemblers (APMA), Mohammad Sabir Sheikh said the above reasons have disturbed the sales of two wheelers and the market has witnessed dull business activities after a very long time.

On the contrary, he said car market is going strong despite increase in prices twice from January to March. Soaring demand of cars is evident from four to six months delivery timing and heavy premium being charged on spot sales by the dealers as assemblers fail to meet demand and supply gap.

Majority of the bike buyers belong to low middle income group and any cash crunch forces them to go for used bikes instead of brand new bikes. Due to falling disposable income of many buyers the assemblers of Chinese low priced bikes are highly worried over sudden declining sales trend in the two months, he said adding the government charges higher taxes on bike sales which should be brought down in the new budget to lower bike prices.

Due to intense competition and

declining profit margin – a number of companies are on the verge of collapse, Sabir claimed.

Currently in Pakistan market – Suzuki offers the best of 150cc bike range as compared to its all competitors (Chinese and Japanese). Suzuki GR-150, introduced in 2018, costs Rs 219,000 while Suzuki GS-150SE sells at Rs 163,500. GS150cc is available at Rs 143,500 which Pak Suzuki has been assembling for around a decade.

He said Yamaha holds the distinction of assembling best models of 125cc which include YB125Z at a price of Rs 115,900 introduced in 2018. It is a family use bike.

YBR125-G carries price tag of Rs 134,500. This is best design model of Yamaha with powerful engine plus durability which its rival Honda lacks.

Yamaha YBR125 costs Rs 130,500 and has been famous in many countries due to its original shape and design. Young boys love this bike.

Sabir said Honda has been offering very old models with obsolete technology which include CG-125cc (four decades old model) and CB150F is also an old model with low price.

Taking the above models – the share of 70cc model including Honda CD-70cc and all Chinese replicas is over 70 per cent. Pakistan is the only country which has been producing 70cc bikes otherwise production of this model has been closed down all over the world decades back, he said.

Chinese above 100cc bikes have made their inroads some two years back but their market share is less than two per cent of total bike sales, he said adding the Chinese bikes are available in the range of 125 to 250cc. Due to lack of

engine technology these models are finding hard to lure the buyers, APMA chief said.

On future market trends, he said in the next two to three years – electric car and electric bikes will take the markets by storm as research and development by world leading assemblers on these two key areas are going on fast pace.

China is now highly getting involved in electric bikes and cars and investing heavily to give a tough competition to European, American and Japanese rivals.

Sabir Sheikh said the planners in the government and industry people are enjoying what they have now and nobody is thinking about the future of cars and bikes.

The new government, which will come into power after budget announcement, should take notice of the future development in auto sector and announce new policy measures to attract new foreign players to introduce electric cars and bikes in Pakistan.

He said it is heartening to note that Ministry of Science and Technology last year had taken the initiative in giving a wakeup call to the local assemblers of cars over the recent developments in electric cars all over the world.

However, the Ministry had not touched the issue of electric bikes.

While quoting the report of Science Ministry, he said as in Pakistan there is no local auto maker, the R&D is carried out back home by the Foreign Partner and the local OEM and the auto parts makers all make to print, having been provided the design, drawing, technical data and standards. Additionally technical support through technical man power, training and visits is provided.

www.automark.pk | May-2018 | Page 22

Monthly AutoMark International

However, design parameters and testing details and procedures are not provided, so technology is not wholly transferred.

Pakistan is ranked very low by volume amongst the auto manufacturing countries. It produces all kinds of vehicles under collaboration but currently has no local manufacturer of any indigenous 4-wheeler.

The automotive technology is now in transition. The technology is creating as well as disrupting the norm. Consumer habits and expectations are also changing because of technology. It is also enabling the customer to interface with the company at many points and even co- creates products and strategy.

The vehicles themselves are becoming intelligent and more like a computer on wheels. These are both exciting and disruptive times.

Sabir said as per Ministry of Science’s report the world is moving towards Hybrid, Electric and Hydrogen fuel cell (HFC) vehicles. In the next 15, the world will witness a plethora of Hybrid, Electric as well as some HFC vehicles.

The number of electric cars on the global roads has risen substantially.

China accounted for 40 per cent of EVs sold and is by far the global leader in EVs. However, an argument can be made that in Pakistan, the fossil fuel vehicle will continue for a longer period, especially in the lower strata, due to lower cost. It is estimated that cost of battery, which forms about half the cost of an electric vehicle, will in 12-15 years, reduce to an extent that the total ownership cost of EV will equal a fossil fuel vehicle. Even in China, where EVs are being pushed, fossil fuel vehicles will be around for at least 15 years. India has announced its aspiration to go all electric by 2030, but it is doubted by world bodies, as to transition to EV will require political and economic bandwidth besides home grown EV makers as well. Fossil fuel vehicles are likely to continue in the world beyond two decades, albeit in reducing quantum.

The government should provide incentive and support electric vehicle and talk to potential deep pocket candidates, who have currently no

automotive operations, as the current operations are all Joint ventures, Sabir said.

There is yet another view that the local manufacturer could embark on EV directly. The thought process is that whilst innovation in mechanical aspect of the automotive technology requires a great deal of engineering and research infrastructure as well as heavy investments, software based novelty is relatively easier to achieve, and Pakistan already possesses a strong developer base to introduce novel software based features.

The battery technology is yet in the melting pot, it is being rapidly developed and will continue to do so for at least a decade before it matures. Batteries are getting better and better with more energy density and the prices are decreasing. It is predicted that by 2025 the cost of total ownership of an EV will equal that of an ICE vehicle at current technology level.

As per Ministry’s report, there were two million EVs in the world with 40 per cent of them being in China. A Bloomberg report estimates that by 2,040 -- EVs sales will be 35 per cent of all sales.

As per Ministry, there is a lot of hype about EV in the world and Pakistanis are getting affected by it. However, Pakistan is not a major pollutant, so there should not be any undue hurry to go electric, beside if we replace the tail pipe emissions by chimney emission, it would help no body. Unless we replace our high fossil fuel based energy mix substantially by renewable energy (nuclear is frightening) we should not race forward, but move towards it in a pragmatic manner.

Pakistan will surely however traverse the path of EV, whether later or earlier, and the government will have to carry out the following activities. Invest in making charging infrastructure widely available. This can be do ne in partnership with auto makers who want to sell EVs. Assess the effects of EV on national grid to avoid any mishap.

Subsidize the cost of EV. China subsidizes by as much as 60 per cent.

Incentivize investment in motor and power electronics. Batteries cannot be e c on o m i ca ll y ma d e a t c u r r en t technology levels for our expected enhanced volumes over 10 years. This will, however, eventually happen as technology improves as well as our auto

M. Sabir Shaikh Chairman APMA

Currently in Pakistan market – Suzuki offers the best of 150cc bike range as compared to its all competitors (Chinese and Japanese). Suzuki GR-150, introduced in 2018, costs Rs 219,000 while Suzuki GS150SE sells at Rs 163,500. GS150cc is available at Rs 143,500 which Pak Suzuki has been assembling for around a decade.

volumes do. Train manpower in alternate skills to create employment.

The Chinese government has tremendous impetus on electric vehicle deployment. Apart from the fact that the volumes are low in Pakistan we should start working on the capacity building of the institutions so that in future the country is well placed in adopting the evident new technology of electric vehicle and have human resource to cope with the challenges of the technology. When the electric vehicle technology would be available it would just not impact on automotive sector but it would affect the power utility i nd u s t r y, p e t r o l e u m I n d u s t r y , construction/building industry for providing charging facilities, urban transportation etc.

www.automark.pk | May-2018 | Page 23

Monthly AutoMark International

JAC X200 Pickup - Update

Ghandhara Nissan rolls out locally assembled JAC X200 pickup in Pakistan

Ghandhara Nissan has launched the locally-assembled JAC Motors X200 one-ton pickup, which is mainly used for the distribution of goods.

It is now being produced locally (in Pakistan), previously it was imported in built-up condition from China. JAC Motors is one of the leading companies of China, which has expertise in the manufacturing of light commercial vehicles.

Rolls out ceremony held at Ghandhara Industries vehicle assembly plant at Port Qasim in Karachi, while official

launching ceremony held in city on first week of April in Karachi.

Speaking at the launching ceremony of the pickup , senior management of JAC Motors, led by Oscar Yu, Head of Light Commercial Vehicle Business, told the Automark that they “will be offering more products in this strategic market, Pakistan.”

Production capacity at Ghandhara Nissan for X200 pickup is 5,000 units per annum on a single shift basis.

Company CEO Ahmad Kuli Khan Khattak called it a milestone that

Ghandhara Nissan achieved by locally producing X200.

“In such a short time, this vehicle has made its mark in terms of performance and quality standards,” the statement said, adding the company would ensure that consistency was sustained in the quality of locally assembled vehicles.

The company was incorporated in 1981 as a private limited company and acquired sales licence for the distribution of Nissan vehicles in completely built unit (CBU) condition in Pakistan.

www.automark.pk | May-2018 | Page 24

Exclusive comparison by Automark

United Bravo vs Suzuki Mehran Competition or No Competition?

For months, the news is circulating that United Auto Industries is soon launching an affordable car in Pakistan which will directly compete with Suzuki Mehran.

U ni ted A uto Ind ustr ies i s th e manufacturer of famous branded motorcycle, three wheelers and 2nd largest selling brand in Pakistan.

Let us analyze once & for all whether the two cars have anything in common or its just speculation.

Suzuki Mehran

Suzuki Mehran is the car manufactured

by Pak Suzuki Motors to attract the middle-class society of Pakistan. The price of the car currently ranges between 7 to 8 Lacs. Suzuki Mehran is the cheapest car in Pakistan. The features of Suzuki Mehran include a manual steering, MacPherson strut suspension front, leaf springs suspension rear and front disc and rear drum brakes. Suzuki Mehran is manufactured with OHC 796cc engine, with a fuel tank capacity of 30 liters. Inside the car has seating capacity for 5 individuals. The weight of the car is 1330 kg, fuel type is both petrol and CNG. Also, you have a choice of five colors for Suzuki Mehran.

United Bravo & Suzuki Mehran

Competition or No Competition?

United Bravo DH350

United Autos is planning to launch its new 800cc car in Pakistan called United Bravo. United Bravo is a renamed Dahe DH350. The features yet known of the car are power steering, air conditioning sys tem , ba ck view c amera, an infotainment system, fog lights, alloy wheels and a remote keyless system.

Other specs of the car include USB ports, defogger, manual transmission, wooden interior, lens headlights, LED brake l i g h t s , a n t i - c o l l i s i o n, R P M & speedometer dials, and a seat-belt warning feature.

Some believe that the price of the car will be around 6 lacs, while as per its features other believe that the car’s price will be around 9 lacs.

Auto critics, news writers & experts are comparing a three decades old car with a not-yet-released car.

The comparison is due to two reasons.

One that United Bravo will have 796cc three-cylinder engine, the same one used in Suzuki Mehran. The second reason is the affordability of both the cars.

But to be honest, we don’t really know the price of United Bravo yet. It will be cheap, but can the price be compared to Mehran’s price, well we can’t say for sure.

Also, Mehran has created its place in Pakistan, not just due to affordability but because of its cheaply available auto parts, easy maintenance, and fewer issues. The car has an identity. It is unfair to both United Bravo and Suzuki Mehran that they are being compared when they have a 30 years age difference.

Let us at least wait for United Bravo to release and then pass any judgments.

www.automark.pk | May-2018 | Page 25

Monthly AutoMark International

Another complainant, claimed that the vehicles being produced in Pakistan lack the list of ingredients mentioning their quality, manufacturing date and other specifications. There is no regulatory body to inspect and check the quality and standards of the vehicles and auto parts in the country. An official of the Engineering Development Board (EDB) also admitted that Pakistan Standard and Quality Control Authority (PSQCA) lacks the expertise and facility to inspect the quality of products in the automobile industry.

In rupee terms this has amounted to Rs0.5 billion to date paid by IMC and Rs1.5 billion to date, paid by the industry as a whole.

Another complainant, claimed that the vehicles being produced in Pakistan lack the list of ingredients mentioning their quality, manufacturing date and other specifications. There is no regulatory body to inspect and check the quality and standards of the vehicles and auto parts in the country. An official of the Engineering Development Board (EDB) also admitted that Pakistan Standard and Quality Control Authority (PSQCA) lacks the expertise and facility to inspect the quality of products in the automobile industry.

Former chairman of the Pakistan Association of Automobile Parts and Accessories Manufacturers (PAAPAM), Aamir Allawala, while speaking on the occasion, said that every new auto part, manufactured here, goes to Japan for test and approval.

Another participant of the hearing complained about the culture of SRO saying that the recent blockage of imported used cars at ports had caused a huge loss to importers besides the sudden jump in premium of new cars from Rs0.2 million to Rs0.4 million.

Fawad Hassan, another complainant claimed that small cars, as compared to bigger ones, were costlier in the country.

He said even the locally produced cars, which cost Rs1.9 million on new cars, do not carry airbags, a mandatory safety item in other parts of the world.

“We will provide new cars at cheaper rates if we are allowed to import the same commercially. The vehicles being assembled here are not only of old technology but costlier as compared to the same vehicles abroad,” said Shaukat, an importer of used cars. “The auto industry in Pakistan is an import oriented industry. Even a window screen is not manufactured here. We give 200 per cent revenues in terms of taxes,” he said.

Aamir Allawala, while referring to New Zealand and Australia, said that Pakistan

should not allow the import of cars as th e i ndu st r y is p ro v id in g jo b opportunities to hundreds of thousands of people in the country. He said the import of used cars has generated Rs120 billion in black economy for the country.

Rizwan, another participant at the hearing said “importing a steel plat and molding it is not called manufacturing.

Even the parts manufacturers import all raw material from various countries.

Those criticising the import of used cars should also know that 80 per cent of parts manufacturers are also importing raw material from abroad.” An FBR official also admitted that last year Rs45 billion were spent for imports in the auto parts sector. He said the government was extending concessions to both assemblers and used cars importers.

IMC chief Jamali said that every part being imported by the Original Equipment Manufacturers (OEMs) are guaranteed as compared to the ones imported by others.

During the hearing, Jamali said the industry takes this open hearing by CCP as an opportunity to share its efforts in reducing premiums and curbing the black marketing of new vehicles.

Highlighting the efforts made for progressive localisation, he claimed that the industry has achieved more than 60 per cent localisation on their flagship products and the players continue to study the techno-economic feasibility of further parts.

However, raw materials for all localised parts continue to be imported as Pakistan doesn’t manufacture either auto-grade steel sheets or resin which

Indus Motor Company (IMC) Chief Executive, Ali Asghar Jamali claimed that his company was taking an all-out effort to discourage the menace of ‘on money’.

are the two primary raw materials for all auto parts. After becoming signatory to the Trade Related Investment Measures (TRIMS) and the General Agreement on Tariffs and Trade (GATTS) agreements, the government had to do away with the industry specific deletion program and instead, it introduced a tariff-based system. Non localised CKD is imported at 30 per cent and localized CKD imported at 46 per cent. Irrespective of the fact that there is no mandatory localisation regime anymore, all OEMs continue to pursue localisation based purely on cost merit.

Addressing the recent price hike, he explained that the rupee devalued by almost 10 per cent whereas manufacturer increased their prices by 3 per cent to 4 per cent only.

Furthermore, RD on raw material leads to increased steel prices and increasing utility costs due to prevalent load shedding which is adding to the cost burdens.

He said that almost all OEMs have either increased their capacity or are in the process of increasing it. IMC has recently invested $40 million and enhanced its capacity by 20 per cent to meet the growing demands and to shorten delivery periods.

The auto sector is host to 3 million direct and indirect employees and the largest contributor to national exchequer. If provided with transparent and stable regime, it can serve as a launch pad of economic growth,” he added.

Interestingly, despite severe criticism from customers, the representative of Pak Suzuki, the largest car assembler in Pakistan, remained silent throughout the hearing.

Later, the officials of EDB suggested CCP to wait for the next couple of years as new entrants in the auto sector will change the situation of present demand and supply. Chairperson CCP asked the complainants to submit their detailed complaints within the next 7 to 10 days.

www.automark.pk | May-2018 | Page 27

Monthly AutoMark International

Automotive News - Update

Growing SMEs under China Pakistan Economic Corridor

Opportunity under China Pakistan Economic Corridor (CPEC) has crossed the door steps to grow our Small and Medium Enterprises. But never forget that “procrastination is the assassin of opportunity. We have to forsake traditional slumber and inertia. It is not hard to know why. Out of 3.2 million business entities of trade, industrial and service sectors of Pakistan, around 90% are SMEs dep loying 70% nonagriculture labor. They contribute 30% to GDP, 25% to export earnings and 35% to value-added manufacturing. These facts establish that SMEs are the backbone of Pakistan’s economy.

CPEC with its huge investment of ov er US $ 60 billion present s unprecedented avenues for the growth of SME sector.

Let us strategize a practical plan of measures that would spur the much needed growth of SMEs by exploiting CPEC activities directly and indirectly: * Entering joint ventures with the Chinese business companies, under CPEC scenario, should be made part of our national policy to develop SME sector.The Chairman Federation of Chamber of Pakistan Commerce and Industry (FPCCI) also urges on the government to evolve a productive strategy for attr act ing Chinese investment in the joint ventures of SME sector. Local small business of China competes with the global business giants

due to advanced technology. Transfer of such technology to SME joint ventures in Pakistan would modernize this key sector of the economy. Joint ventures of SMEs have tremendous scope in cold storage, ICT, supply chain business, apparel, daily, engineering, construction, food processing, horticulture, surgical instruments, fisheries, livestock and logistics etc. China also did the same by having joint ventures with their technology partners from America and Europe. * All over the world, countries establish Special Economic Zones (SEZs) as tool for industrial development. Chinese embraced enormous success through this approach. Therefore, 37 SEZs are being set up under CPEC all across Pakistan at strategic industrial estates and trade clusters. SMEs operating in the SEZs are going to receive tax incentives and basic amenities to realize their full potential. Through Chinese experience, we can cultivate capacity of our small business entities by imparting manpower training to operate Chinese machines and tools. It has to be ensured that our SMEs are energized by SEZ operations. * CPEC is principally dedicated to grand projects but SMEs of Pakistan can especially target the spillover effects to be brought by these mega projects. The indigenous investors can get advantage of the ongoing country-wide infrastructure development activity by investing in the industries like steel, cement, mining and contracting.

Investment in these businesses would be very profitable, since they provide supplies of raw materials to CPEC projects. So, the SMEs can also focus on such support industries to avail CPEC’s trickle down or spillover effects. * SMEs in China largely sprouted from Town and Village Enterprises (TVEs) set up in China since 1978. Majority of the TVEs had small or medium size and w er e inv o lv e d in a g r i- pr o d u ct processing, construction, transportation & communication and catering etc. So, our government can emulate Chinese example by bringing about structural changes in the rural economy. This set up can boost small business in exceptional way. * Inadequate lending to SME sector is a major road-block. Banks are shy in lending to SMEs mainly due to undocumented nature of business. Here, we can cite the considerable success of W HAM P r oject of Shor e Bank International Ltd. under US Aid (19992005) whereby select financial institutions were trained to structure financials of small business firms from their kacha khatas. Data structured that way from the daily turnover of small business enabled the banks to extend cash flow based lending that certainly resulted in better repayment of loan.

The similar mechanism can be developed with the coordination of government and SBP to cope with the challenge.

www.automark.pk | May-2018 | Page 28

continued on next page

Monthly AutoMark International

Automotive News - Update

Mass transit system for Karachi will be ready in three to four years, Sindh Assembly told

Sindh Transport Minister Nasir Shah has claimed that a mass transit system for Karachi will be completed in the next three to four years.

He made this claim during the Sindh Assembly’s Question Hour that pertained to transport and mass transit department on last week.

The minister responded that 10 buses had been brought under a public-private partnership project and 20 more were expect ed soon on th e D awo od Chowrangi-Tower route.

To another question by the same lawmaker, the minister said that the government was planning to bring over 600 buses for Karachi and another 600 inter-city buses. He, however, did not give any time frame and said all these buses were expected to come on the roads “soon”.

Pink buses for women Pakistan Tehreek-i-Insaf legislator S ee ma Z i a as ked w he the r th e government had any plan to bring buses exclusively for women.

The minister replied that currently there were separate compartments for women

in buses, but at a later stage the government had plans to introduce “pink buses for women”.

To another question by Ms Zia regarding the route permit fees collected in the past five years, the minister said that over Rs278 million had been collected by the government.

Responding to a question by MQM’s Irum Farooque regarding separate buses for physically challenged people, the minister said that such buses were not available in the country, but the buses to be brought under the bus rapid transit system would have this provision so that people on wheelchairs could easily board the vehicles.

When Speaker Agha Siraj Durrani recalled that he travelled in trams during his childhood in Karachi, the transport minister said that the government was implem enting a neig hbourhood improvement project in cooperation with the World Bank and Asian Development Bank under which trams would also be brought in to ply in Saddar and adjoining areas.

* ’Made in Pakistan’ brand identity must

language. * Ever since its birth in 1998, Small and Medium Enterprises Development Authority (SMEDA) has shown unimpressive performance in developing SMEs in Pakistan. Only cosmetic measures were adopted without any tangible results. But the CPEC activities present a tailor-made role for SMEDA. The authorities at SMEDA should formulate an effective plan to create partnerships and joint ventures of the entrepreneurs of both Pakistan and China. Similarly, SMEDA can facilitate the entry of relevant SMEs in the Special Economic Zones that are being set up country-wide. Such functions are certainly becoming of SMEDA. Everyone is aware that Toyota and Honda started their journey of success from small factories.They evolved into industrial giant corporations with

be popularized globally through CPEC. For this purpose, the government is required to initiate some solid efforts for developing international goodwill of Pakistani products. It is common by renowned foreign companies to purchase Pakistani products and put their own label without giving Pakistani SME manufacturer the deserving credit. * Another significant element for the desired growth of SMEs is the development of entrepreneurship capability. Establishment of incubation centers at public universities by the Higher Education Commission is a right step. But this initiative must be supported with necessary resources, teaching ofupdated theory & practice and quality mentorship. A value addition to this arrangement could be the working knowledge of Chinese

Ghandhara Nissan to raise Rs1.2 billion from right shares to revive existing assembly plant Ghandhara Nissan will raise Rs1.2 billion from a right shares issue to partially finance the revival of its existing assembly plant for manufacture of Datsun passenger cars.

The company has decided to issue 26.67% right shares by offering 12 million right shares to the existing ordinary shareholders of the company at a price of Rs100 per share to partially finance the expenditure for revival of e x i s t i ng a s s e m b l y f a c i l i t y f o r manufacture of Datsun passenger cars.

In a notification sent to the stock exchange on Monday, Ghandhara Nissan Limited told it was intending to raise Rs1.2 billion out of a total of Rs5.6 billion for the revival of its existing assembly facility for the manufacturing of Datsun passenger cars.

Also, this funding would be used for capacity expansion for its other existing businesses, read the notification.

“The funds received from the right issue will partially contribute towards the revival of car assembly facility as well as capacity enhancement of the plant whereas the overall revenue will increase with resultant increase in profitability of the Company, thereby enhancing the expected returns to the valued shareholders of the company,” the notification read. appropriate government policies. China and India have also developed their economic muscles by giving growthconducive environment to SMEs. The government of Pakistan and all stake holders should have full advantage of CPEC for development and technological upgradation of the SME sector.

So, CPEC offers right time opportunity to enhance productivity of SME sector for realizing the dreams of higher p r o f i t a b il i ty , em pl o y m en t a n d sustainable growth of Pakistan.

The author is an economic expert and currently serving as Country Manager o f J S C S u b s i d i a r y B a nk N B P Kazakhstan(Foreign Subsidiary of National Bank of Pakistan).

Courtesy: Daily times

www.automark.pk | May-2018 | Page 29

Monthly AutoMark International

Had Chat with Automark

An Exclusive interview with M. A. Khalid, DGM Sales & Marketing Regal Automobiles Industries Limited AM) Kindly tell us something about Regal Automobiles?

Regal Automobiles: Regal Automobile Industries Limited (RAIL), country's third largest bike assembler, has setup an assembly plant in Lahore with an investment over 800 M il l io n P K R t o pr od uc e l ig ht commercial vehicles, van & other four wheels variants from new financial year 2018.

The company has signed a technical collaboration agreement with China's DFSK Group to assemble vehicles under the name PRINCE. In commercial Vehicles line we are offering Top Quality 7 seaters (K07) & 11 Seaters (C-37) deluxe top quality vans with EPS, Power Windows & Dual AC. In addition a Pickup (K01) of excellent deck size and weighing capacity is also available. All are very economical and fuel efficient. Backed with Nationwide After Sales & Warranty network.

AM) Could you elaborate when Regal Automobile are going to launch Local assembly vehicles in Pakistan?

In the New Financial year we will start local productions INN SHAA ALLAH.

AM) Is your company importing 100 units of vehicles in CBU condition?

Yes we are.

AM) What is the regal assembly plant production capacity and what is the target production of DFSK vehicle after production starts?

Production capacity is 10000 units ( 2 Shifts ) and our target to produce around 5000 units in first year.

AM) How do you see Prince Vehicle’s market in Pakistan as these are Chinese products?

Much better than other variant available as DFSK vehicles standards are meeting Euro & USA Standard and we are importing and offering the same EURO

quality & standard products in Pakistan Market.

AM) Could you tell us something about the recently introduced SUV PRINCE GLORY 580?

Glory 580 is a full option 1.5 Turbo CVT EURO V Gasoline with all the latest features luxury 7 seater on half the price of the Toyota Fortuner 2 WD variant.

Glory 580 is a very successful City SUV in other part of the world and we hope good for it's introduction to the People of Pakistan.

A) How do you see Chinese automobile vehicle’s market in our country (overall)?

Chinese automobile products are

performing good like they have taken over the 1-5 Tons LCV category against Japanese & Korean Vehicles in Pakistan, they will play a significant role in other 4 wheels like Cars, SUV, LCV & HCV as well.

Are you satisfied with the tax structure on the vehicles in Pakistan ?

No we are not satisfied as the current duty and tax structure is not justified and need to be revised. For example, there is no Regulatory Duty on used cars imports, which are not offering even any warranty and after sales on the product while an assembler have to pay Regulatory duty in addition he is offering after sales and warranty on his brand new products, which also causes cost to the new assembler, resulting prices on higher to the customer.

New Investment in Automotive Sector - Update

Monthly AutoMark International

Master Motors Awarded Greenfield Status to produce Changan vehicles in Pakistan

Ministry of Industries and Production (MoI&P) has awarded Greenfield status to M/s Master Motors Limited.

According to the notification, the MoI&P says that in pursuance of the Economic Coordination Committee’s (ECC) decision of March 18, 2016, on “Automotive Development Policy (ADP) 2016-21” Government of Pakistan has awarded the “category-A Greenfield Investment Status” to M/s Master Motor Ltd for assembly/ manufacture of vehicles covered in the exclusive contract agreement signed by the firm with their principal i.e. M/s Chongqing Changan Automobile Co. Ltd., subject to the

following conditions: (i) M/s Master Motor Ltd shall strictly adhere to the conditions laid down in Notifications No. 2(9)/2013-LED-II of June 2, 2016; (ii) the company would enter into agreement with the Ministry of Industries and Production, to ensure compliance to conditions of the ADP 2016-21. SRO 656(1)/2006 (updated vide SRO 483(1)/2016 June 29, 2016) and various timelines for completion of the project for availing incentives under the ADP 2016-21; and (iii) EDB shall issue manufacturing certificate and list of importable components to new investors after it verifies that the

manufacturing/assembly facilities established by the firm are adequate to produce roadworthy vehicles.

The Ministry has clarified that IVECO vehicles will also be included only if the firm provides the requisite information well before signing the investment agreement and it qualifies the criteria of Greenfield category of ADP 2016-21.

The meeting was also attended by the CEO, Master Motors Limited, Nadeem Malik and Hamid Rasool of Foton JW.

Two automakers may to go to the court to resolve their conflict over the greenfield status Foton JW Auto Park and Master Motors have engaged in an argument over granting of Greenfield status to Foton.

Master Motors complained that it is unfair to give greenfield status to Foton JW as it will give them a 30% competitive edge over the already established automobile company.

F oton JW, on the other hand, emphasized that their Greenfield status is in line with the Automo tive Development Policy (ADP) 2016-21. A representative of Foton told that the company has assured the government that they will introduce new products in the Pakistani market, and that is why they were conferred the Greenfield status as per existing rules.

The companies have approached the Ministry of Industries and Production to resolve their conflict.

The Argument

In order to understand what the conflict between the two automakers is about, let’s take at what Greenfield status is.

According to ADP, Greenfield status is given to companies that are installing new and independent automotive assembly and manufacturing facilities by an investor for the production of vehicles. These vehicle models, it should be mentioned, are those which aren’t already being assembled/manufactured in Pakistan.

The policy further elaborates on this by mentioning that: A new manufacturer under Automotive D ev elopment Po lic y (2 01 6-2 1 ), establishing a maiden assembly facility will invariably need separate treatment and greater incentives in the early years to enable it to introduce its brand, develop a market niche and share, create a distribution and after-sales service n etw or ks , a nd de velo p a pa r t manufacturer base.

In short, the Greenfield status was introduced in the auto policy to attract new market players by giving them incentives.

Given all this, why is Master Motor not convinced about awarding Greenfield status to Foton? The company states that Foton JW has previously sold their products in Pakistan under the brand name Forland.

A representative from Master Motors told: Forget about what happens to us or our business; is the decision not in contravention of the auto policy? The net impact of such a move will not be positive for the economy. We see no logic in promoting new investment that kills an operational project.

Foton JW Auto Park responded to the reservations of Master Motos saying; Nothing could be further from the truth.

We secured the status after a long-drawn process of scrutiny by the relevant departments. Everything has been done in a perfectly transparent manner. Why would government officials stick their neck out if we were simply rebadging?

Foton’s COO Hamid Rasul says that Master Motors is simply not happy about the fact that his company got the license from Beiqi Foton Motor to as semble veh icles in P akistan.

He said: The fact is that the company that is raising objections was not authorised to manufacture the said brand in Pakistan.

My company has provided a signed letter from the parent company, Beiqi Foton Motor, attested by the Pakistan Embassy in China and the Chinese consulate in Pakistan with our application to the ministry.

Mr. Rasul elaborates on this and explains what he believes to be the r ea son behind M ast er Mo tor s’ frustration: As far as we know, there is a lawsuit from Forland against the said company for illegally assembling vehicles in Pakistan.

He further added that Foton has already acquired 40 acres of land in Lahore, as well as the necessary equipment. The company will start its operations in a matter of weeks, Rasul told.

www.automark.pk | May-2018 | Page 31

Exclusive Reviewd by Anwar Iqbal

HEAVY WEIGHTS ENTERED IN LIGHT COMMERCIAL VEHICLE SEGMENT A light commercial vehicle is the official term used within the European Union, Australia, New Zealand, and occasionally in Canada for a commercial carrier vehicle with a gross vehicle w e i gh t o f n o t m o r e t h a n 3 . 5 tonnes.Qualifying light commercial vehicles include pickup trucks, vans and three-wheelers all commercially based goods or passenger carrier. The LCV concept was created as a compact truck and is usually optimized to be ruggedly built, have low operating costs and powerful yet fuel efficient engines, and to be utilized in intra-city operations.

The first light commercial vehicle assembled in Pakistan was Jeep Gladiator pickup in Kandawala Industries Ltd in 1963 which was renamed as Naya Dour Motors after nationalization in 1972.

Presently most popular light commercial pickup is Suzuki Ravi. The production volume of Suzuki Ravi in the year 201617 was 18,507 units and in 2015-16 was 29,796 which was the highest production volume in all segments of automobiles.

This Suzuki Pickup was introduced in

Pakistan in 1967 and local assembly was started in 1984.

Simultaneously Datsun Pickup was introduced in Pakistan in 1973, Toyota Hilux pickup was introduced in Pakistan in 1978 and Mazda T3500 light commercial truck was introduced in 1984.

All these vehicles are Japanese Origin and dominated P akistani li ght commercial vehicle segment for more than one decade.

In the year 1994 DEWAN launch first Hyundai vehicle in Pakistan. Which was Korean origin it was a light commercial vehicle with One Ton load capacity.

DFML gives it local name “Shehzore”, It is called “Porter” in Korea. The launching of this vehicle becomes a success symbol for DFML. Shehzore became market leader in its segment and defeated Toyota Hilux which was market leader at that time. Due to some reasons Shehzore production was discontinued in the year 2007.

In 2016 new auto policy was announced by the Government of Pakistan. This policy becomes a catalyst for the change

in the horizon of automobile industry in Pakistan.

Surprisingly all new comers in automobile sector including heavy weights like Hyundai and Kia and medium size Chinese origin companies are primarily focusing on light commercial pickup segment. As per new auto policy, investors are segregated in two segments i.e Greenfield Investors and Brownfield Investors.

The present status of these investors is as under.

In the light of these facts, it is imperative that there would be a stiff competition in automobile sector of Pakistan in near future, specially light commercial vehicle would turn into battle field among Japa nese, Chinese and K or ean assemblers. Interestingly, ultimate winner would be the consumer who will have a vast range to whose his most appropriate / suitable vehicle.

The pictorial presentation of the upcoming and existing LCV’s is as under

JAC X200

FORLAND BRAVO www.automark.pk | May-2018 | Page 32

Monthly AutoMark International

SUZUKI MEGA CARRY

Mushtaq KY10, Upcoming Vehicle of Khalid Mushtaq Motors - Karachi

The Below status shows that all companies are bringing light commercial vehicle in near feature in Pakistan

Toyota Hilux Pickup 1978

Datsun Pickup 1973

www.automark.pk | May-2018 | Page 33

Corporate Business Event Update

Monthly AutoMark International

General Tyre & Rubber Company Limited, Arranged dealers overseas tour on last month to Russia and Singapore.

Above group picture of dealers during Singapore tour

Team General Tyre & Rubber company during My Karachi Exhibition held at Karachi Expo Center form 20-22 April-2018

Pak Suzuki Motors, Vendor conference held in Munich, Germany on March-2018 www.automark.pk | May-2018 | Page 34

Unveiling Ceremony in Karachi

Monthly AutoMark International

Master Motor introduces Yutong-Master Double Glass Bus for Pakistan’s market

Master Motor Corp. (Pvt.) Ltd has announced the unveiling of new Elite Class Double Glass Bus of YutongMaster, the market leader in Inter-city bus segment of the country. The ceremony was held on 17th April 2018 at their Assembling Plant at Port Qasim Industrial Area, Karachi.

Distinguished guests from Government, private sector, transport officials and transporters are invited for the event.

At the event, Mr. Nadeem Malik, the Managing Director of MMCl, stated that MMCL has a vision to serve the transport industry of Pakistan with the highest quality products and after sales services.

The launching of this vehicle is another step ahead towards achieving our goal

of providing a society a better life style and living. Mr. Faisal Meraj, General Manager Marketing & Sales at MMCL, stated that this bus will be a game changer on long routes as the bus is specifically designed for long routes keeping in mind of Pakistani road infrastructure.

MMCL is the first company to introduce and started the assembling of Euro 3 buses in Pakistan. Currently, their bus model ZK6122HL is running in the market and has been a benchmark for other Bus assemblers specially beating the glor y of their competitors.

MMCL in technical collaboration with Yutong (the largest manufacturer of buses in the world), is assembling the Y ut ong B us mo de l Z K 61 22 HL ,

commonly known as Yutong-Master.

Since the recent past, Yutong-Master has been a market leader in inter-city bus segment in Pakistan.

Master group is operating since 1963 contributing in various sectors including Power, Textile, and Automotive. Master Motor Corp. (Pvt.) Ltd has a state of the art, commercial automobilesassembling & manufacturing unit. It was established in the year 2002 for assembling & manufacturing of Light Duty and Heavy Duty Commercial vehicles and Buses.

MMCL is also an authorized assembler and dealer of world renowned brands like Mutsubishi Fuso, FotonDiamler, IVECO and Changan.

www.automark.pk | May-2018 | Page 39

New Investment in Auto Industry

Ghandhara Nissan and Nissan Motor Company plan to invest $41 million to assemble Datsun models

Peyman Kargar, Senior Vice President, Nissan Motor Co. Ltd. (centre) signing the agreement with Ahmed Kuli Khan Khattak, CEO, Ghandhara Nissan Ltd. (right) to being the local production of Datsun models in Pakistan. Also present in the ceremony General (Retd.) Ali Khan Khattak, Chairman Ghandhara Nissan Ltd.(left)

As the CPEC gains momentum, enhancing the feel-good factor and stirring an economic boom across the country, one of the topnotch Japanese automakers Nissan has decided to make a comeback to Pakistan – with its Datsun models. To many a Pakistani, Nissan was synonymous with its nowdefunct ‘Sunny’ since the late 1960s.

But, having stopped its production for nearly a dozen years, it no longer features as a part of the company’s plans for the Pakistani market.

Perhaps buoyed by the promise of Auto Development Policy 2016-21, Ghandhara Nissan partnering with Nissan Motor Company is planning to invest Rs4.5 billion, approximately $41 million, over the next four years, creating 1,800 new job.

The first Pakistan-assembled Datsun cars would be plying the roads as early as next year.

Pakistani auto market dubbed lucrative

At only 17 per one thousand people (translation: only 17 people out of every

1,000 possess a car; Japan in contrast has a motorisation rate of 600), the low motorisation rate in a country of 200 million-plus people, along with the growing economy and the government’s incentivisation for the entry of new companies under greenfield and brownfield status, has combined to make the auto industry quite lucrative.

Talking to media, the senior vicepresident of Nissan Motor Corporation, Peyman Kargar, said, “Pakistan has great potential in the auto industry as the economy is growing while the motorisation rate is quite low.”

Nissan is a global full-line vehicle manufacturer that showcases as many as 60 models under the Nissan, Infiniti and Datsun brands.

In fiscal year 2016, the company sold 5.63 million vehicles globally, generating revenue of Japanese yen 11.72 trillion.

In fiscal 2017, the company embarked on its ‘Nissan M.O.V.E. to 2022’, a mid-term six-year plan targeting 30% increase in annual revenue to 16.5 trillion yen by the end of fiscal

2022.

Nissan has a global workforce of 247,500 and since 1999 a partnered with French manufacturer Renault. In 2016, Nissan acquired a 34% stake in Mitsubishi Motors. Renault-Nissan-Mitsubishi is at the moment, the world’s largest automotive partnership, with combined sales of more than 10.6 million vehicles in calendar year 2017.

Meanwhile, established in 1981, Ghandhara Nissan is a part of the Bibojee Group of companies. The group is an industrial conglomerate with a diverse portfolio comprising Pakistan’s largest tyre manufacturing unit, automobile assembling plants, cotton spinning mills, a woolen mill and companies dealing in general insurance, and construction.

Having two independent assembling facilities each for commercial and passenger vehicles, the company prides itself to be Pakistan’s only automobile company with the capability of assembling a complete and diverse range of products.

According to auto analyst, Nissan’s

www.automark.pk | May-2018 | Page 40

Monthly AutoMark International Sunny model was a great success and was well received but its distribution and its spare parts were difficult to find.

Nissan previously operated in Pakistan from 2004 before wrapping it up in 2008.

However, Peyman Kargar, who is also the regional chairman overseeing Nissan’s operations in Africa, the Middle East, and South Asia, said that Nissan would be coming this time with a proper plan – its after sales service geared towards long-term customer satisfaction.

Answering a query on Pakistan has huge demand for low engine size cars, Kargar said that it might be true at the moment but Nissan expects Pakistan’s auto industry to evolve.

each of them is manufacturing just one or two products [in a given engine size],” said Kargar.

Meanwhile, Kargar added that the restriction on imported used cars of under three years is a good regulation to restrict flooding the market at the expense of local industry.

“As far as local industry is not ready to provide cars to customers at par to the demand and to their satisfaction, authorised import of used cars up to a level is fine. It is a sensitive balance,” he said.

The countries where import of used cars was not allowed, Kargar informed, the

players to do the same.

But according to Ahmed Kuli Khan, who mentioned the local assemblers supporting their endeavor to launch Nissan, the high delivery period of the local assemblers was due to capacity constraints.

“With new players coming, this [extended] delivery period would hopefully be reduced,” Khattak said.

Local assemblers generally take from three to eight months to deliver cars to customers.

Kargar said, Nissan’s wouldn’t be doing that and would be using the money of the customers only for what they have

local industry was in a mess.

The vexing issue of delivery period: Kargar further said, Pakist an’s automotive industry is growing and there’s even greater potential in the industry. The market size is expected to grow by about 50 percent in the next four years – to 300,000 new units from the present 200,000.

The Pakistan customers deserve the same cars as other parts of the world get, said Kargar, adding, “the customers would move to another brand as soon as they have a choice.”

“Nissan would not be compromising on quality and if the current supplier of parts in Pakistan fails to deliver then they wouldn’t be buying parts from them anymore and would nurture new quality suppliers”, said Kargar.

Kargar further said that Nissan would be making differentiation for itself in Pakistan market with quality product, competitive price and negligible delivery period. He added that by providing cars in time, it will prompt other industry

paid for and nothing else.

Kargar, who hails from France, also said that Nissan believes in localisation and would initially be starting with 20% indigenous parts and would gradually move towards greater indigenisation of its cars provided that production increases.

The Nissan SVP said, the process of localisation depends on the number of cars produced. The cost-benefit ratio is higher when importing parts compared to producing them in host countries with low demand levels.

Moreover, he said that the volatile exchange rate in Pakistan makes localisation process more feasible and it would be necessary in order to become cost competitive.

Ahmed Kuli Khan also talked of preferring CKDs (Completely Knocked Down) over CBUs (Completely Built Units), though initially production would be on both prongs....

Small is beautiful Though the company’s top officials have largely kept mum when questioned about which Datsun car/cars will be launched, Ghandhara Nissan CEO, Ahmed Kuli Khan Khattak hinted that they will be starting with small cars.

If the market grapevine is to be believed, Nissan would be starting its operation with 1.2 liter Datsun Go, a popular car in neighboring India, which is considered to have similar market characteristics as in Pakistan. When buying a car, price and family size are major concerns for a customer in both India and Pakistan.

Post the upgradation of Ghandhara Nissan’s production facility at the Port Qasim under this new partnership, the capacity would be raised to 32,000 units.

Apart from Nissan, Kia and Hyundai have also announced plans to reenter the Pakistan market in association with Lucky Cement and Nishat Group respectively.

According to Ahmed Kuli Khan Khattak, if required the capacity would be increased with another phase of investment of Rs1.5 to 2 billion. Khattak said this on the occasion of officially announcing Ghandhara Nissan and Nissan Motors Company partnership recently.

Peyman Kargar believes that Pakistan has a good balance of imported used and locally manufactured cars at the moment because customers were given limited choice by the existing auto makers.

“Consumers must have choice, when the manufacturers are fewer. Moreover,

www.automark.pk | May-2018 | Page 41

Monthly AutoMark International

By Kaptain Mirza

How Far Online Motorcycles Sales go with CPEC – Hard Facts & Figures with Ideas to Make it Work

FACT: A mosquito weighs - 2.5 milligrams. The mosquito repellent industry is around $10.34 billion for 2018. On an average – for a milligram, the world is spending $5 billion. Bigger equipment or powerful ideas, the latter wins it.

Sadly, no statistics are available calibrating the mosquito industry of Pakistan. The scope is huge if we know the tactics of tackling the giants who have built a brand. The secret sauce is the branding.

Rush of the eCommerce Bubble On the other end, another industry is picking up pace quite well; the online sales market for motorbike spare parts selling. The textiles and eCommerce like Daraz have taken up the internet. The competition, as of now, if you come to think, what’s the second best after the leaders? Perhaps one would struggle to recall. That’s branding. What comes to your mind when real estate pops up?

The food industry? Who is it? Few names, but the greyed out, will be blacked out, eventually.

Online Dilemma of Rural Pakistan - The dilemma with motorbike industry sales, the online part, is of other dimension.

The target market. The market segment that is a major buyer of motorbikes, comes from the remote rural and urban parts of Pakistan.

The target market, of which no demographic statistics are available; make it a challenge. How many in the rural areas go beyond Facebook and Youtube. Let alone the latter, how much of Google, is used for search on Google?

Demographics are not supportive.

TRADIT ION AL SALES - The awareness of online transactions that follow a certain educated pattern, is not known to many. Traditionally sold bikes crossed the 2 million mark for all the brands from July 2017 to March 2018.

Honda which manufactures in Pakistan, is the leader followed by DYL and Suzuki. Yamaha retained the 9th slot.

United while remained in the last out of 13.

CALCULATION and EARNING POTENTIAL – Keeping an average of

35,000 sale price; 1.4 million motorbike sales converts to PKR. 50 billion.

Imagine if online sales of motorbikes in Pakistan contributes a 2% share, the collections will be PKR.900 million.

The spare parts sales are not included yet.

CHECKOUTS IN RURAL POPULATION - Portals like Pakwheels.com and ebike.pk have s t e p p e d i n t o t h e se u n c ha r t e d opportunities, selling motorcycles and spare parts; the roadblocks are the ecommerce awareness in the public.

How to use, select the products, review and cross-check all down to the checkout part, is a dilemma for rural population.

Rural areas where motorcycles are used in abundance.

The crux is awareness, branding, making people knowledgeable to use ecommerce portals to buy and rent automobiles and motorcycles.

STRATEGY – Build up a website, that’s Part 1. Enable it for ecommerce. All the WordPress, banking integration like Mobicash, EasyPaisa can be achieved, that’s Part 2. Part 3 is difficult.

Encouraging people, creating a brand is rocket science. Part 4 is educating the public on how to. Part 5 is drop-shipping your products where you work as outsourced agency and company delivers at the doorstep.

Combine all these parts, the ROI will need 4 years of time to hit fames achieved by likes of Daraz. How do you keep those years well-oiled and running is entrepreneurship. All in between is hustle.

All is set, But there’s another monstrous issue, the internet. Though telecoms claim signals reaching every part of Pakistan. But connectivity is yet to be achieved.

FUTURE OF THE INDUSTRY – Motorbikes still have a long way to go.

The potential is real. The scope is quite huge. Tapping a specific geographic sector can convert into hundreds and thousands. But one needs an army to set the house straight; also chalk out the awareness campaign. The public education will be the key.

Only the leader like Alibaba are

remembered. 2nd best is good for rankings only. But leaders too can control 70% of the share. The rest is taken up by saturation, where cutthroat competition kills every other ecommerce champion everyday. Just imagine if every ecommerce site selling just everything, has a vision to be the OLX and Alibaba.com, but only manages a slice of the market, like 10-12 sales a day.

If everyone is doing it, nobody’s cutting it. But someone will, one day. That could be locals or ….

CPEC Future – Soon Pakistan markets will be flooded with Chinese products, the taxes won’t matter. Local products will be killed. A concern, but antidumping laws but will be an eyewash.

However, technology too will find its way into our marketplaces.

Automobiles, the monopoly of which is like a charm, that’ll get killed.

Motorcycles, electric and fuel powered will soon be dotting our already clogged roads. Cars will be replaced for smaller rides.

IDEA – Uber and Careem will have a competitor who will introduce car rentals in the city. Rent a car, ride it, leave it anywhere, it’ll be picked by company.

Online motorcycles sales will be an intere sting business – elect ric motorcycles, motorcycle spare parts, m oto rc yc le ren ta ls, m oto rcycle o ver hau l ing, re placem ents and instalments; from broader perspective, the business has impact from this point.

The scope will be expanded with Chinese motorcycle influx into Pakistan – the industry is yet in its infancy to attain the maturity and saturation beauty creams have undergone in recent times.

The promise, the scope yet lies in the rural areas, which when educated will attune into a profitable segment.

Neither any government has come up with a plan to tap the human potential, not any telecom has invested heavily in area where our majority lives.

Businesses find latter and former to herald a change to follow through with business, products and profits.

www.automark.pk | May-2018 | Page 42

My Karachi Exhibition

Monthly AutoMark International

www.automark.pk | May-2018 | Page 43

By Engr. IH Tariq Farooqui ME, PE

Monthly AutoMark International

PAKISTAN AUTO INDUSTRY & IMPACT OF NEW AUTO POLICY ON PAKISTAN AUTO INDUSTRY

Pakistan is an emerging market for automobiles and automotive parts, offers immense business and investment opportunities for domestic and foreign investors.

At present there are four Car /LCV and 4x4 assemblers, (Toyota, Honda, Suzuki and FAW), Three active farm Tractors assemblers (Millat, AlGhazi and Belarus) Hino, Daewoo, Isuzu, FAW, Foton and SINO in the trucks and buses segments, and there are 113 units of two and three wheelers in the country. During financial year 2016-17 the industry produced 166,061 Passenger Cars, 20,445 Mini Passenger Vans, 20,367 Mini Pickups, 5,698 Toyota Hilux Pickups, 3,530 SUV and 4x4,7,712 Medium and heavy duty trucks, 1,090 Buses, 54,975 Farm Tractors ,and more than2.0 Million 2 and 3 wheelers.

These units contribute 2.8% of GDP. Total gross sales of automobiles in Pakistan during the previous financial year were Rs.214 billion. The industry paid Rs.63 billion cumulative taxes that th e g ov ernm en t has levi ed on automobiles. There are 500 auto-parts manufacturers in the country that supply parts to original equipment manufacturers. Auto sector presently, contributes 16% to the manufacturing sector. Vehicles’ manufacturers directly employ over 192,000 people with a total investment of over $ 1.5 billion.

Automobile Industry is known as Mother of all industries. A vehicle

approximately composed of about 10,000 parts, and sub components. With the increase in production and sales of vehicles other industries like Paper, Sheet Metal, Rubber, Plastic, Forging, Casting and many others also grow.

The Motor Vehicle Index in Pakistan is only 16 and is among one of the few lowest countries of the world. It is lower than the neighboring Iran 22, India 18 and Philippines 30. The world average is 110 cars per thousands persons highest being USA having 850 cars per thousand persons.

This MVI exhibits the potential of motorization in Pakistan especially in the context of population in which Pakistan ranks 6th in the community of nations.

The GDP growth witnessed during 201617 spurred the phenomenal growth in the automotive sector. The new AIDP foresee the demand of 350,000 Cars, Vans and Jeeps, 79,000 units of Light Commercial Vehicles, 14,000 units of Trucks and Buses, 83,000 units of Farm Tractors and 2.5 Million two and three wheelers during the next five years.

The present automobile manufacturers were not geared up to meet the rising demand of vehicles , resulting a long waiting delivery period and overpricing at dealers end forced the Government to relaxed the conditions for import of used cars and marginally reduced the rate of custom duty on the import of new cars .

During the last year (from Jan 2017 to Dec 2017) 76,635 vehicles were imported which provides the customers to select the best vehicle according to their choice.

The impact of this import very badly affected the local parts manufacturing industry and the parts manufacturing sector suffers Rs.22Billions in terms of their sales revenue.

The present Auto Industry is dominated

by Japanese Automakers (known as 3B), producing very old and three decade models with minor changes every year.

The people of Pakistan had very limited choice to select best car according to their pocket. Since last 50 years same make and models are available in the market with no new make.

Out of many reasons for non induction of new comers in this field one was the localization policy which was not industry friendly it forced the new investors to start their production with the same level of localization as the existing players have achieved during the last 3 to 5 decades , there were heavy penalties on the non achievements of localization.

When the Pakistan became signatory to TRIM and was forced to allow all imports at minimum rate of custom duty. The Government than introduced Tariff Base System (TBS). In TBS two scale of tariff are introduced. According to this tariff a new investor is allowed

www.automark.pk | May-2018 | Page 44

Monthly AutoMark International to import 100% CKD parts from the start of the production but have to pay high rate of custom duty on the parts which are already manufactured in the country.

TBS system also fails to attract new investors because of the maintaining of competitive selling prices due to high rate of custom duties.

Keeping in view of the existing players performance, old and obsolete vehicles on road, no significant increase in the indigenization and due to the pressure of the European auto manufacturers, First Auto Industry Development program (AIDP) 2007-12 was formulated with the assumptions that the industry will have to be supported through five years tariff plan, however during this period the suggested tariff rates in the policy were not implemented due to undue pressures from the existing players, the policy also do not have major concessions for the new investors as it speaks to import 100% CKD for

three years only on the custom duty of imported parts (which are not yet manufactured in the country). Al-Haj FAW Motors, New Allied Motors, Nissan DongFeng and Tayyaba Motors were granted as New Investors Status and were allowed to import 100% CKD for three years and during this period should achieve the industry levels.

Unfortunately all were failed to achieve the industry level within the stipulated time frame and were imposed heavy penalties. This policy total failed to attract new investors.

The second Auto Industry Policy (2016-21) brings more lucrative incentives for the new investors in this sector.

This policy envisages two categories of New Investment w ith different incentives.

Category-A is termed as Green Field Investment and is defined as the installation of new independent

automotive assembly and manufacturing facilities by an investor for the production of vehicles of a MAKE not already being assembled /manufactured in the country.

According to this Category a new investor is allowed to import 100% CKD parts for five years in case of Cars and LCVs at 10% custom duty on the parts which are not yet manufactured in the country and 25% custom duty on the parts which are already in manufacturing in the country.

For manufacturing of Trucks, Buses and Prime Movers, new investors are allowed to import 100% CKD on the custom duty of imported parts for three years.

For Cat. A the government allows duty free import of plant and machinery for setting up the assembly or manufacturing facility on a one-time basis.

Import of 100 vehicles of the same variant in CBU form at 50% of the

www.automark.pk | May-2018 | Page 45

continued one next page

Monthly AutoMark International

Engineering Development Board (EDB) Staff protests out side the EDB office Ex-EDB staff protests for there jobs, Federal government transferd all Ex EDB staff to there original Departments

prevailing rte of custom duty on CBU imports for test marketing after ground breaking of the project.

Category-B speaks about the revival of an existing assembly and or manufacturing facilities, that is nonoperational or closed on or before July 01, 2013.

For Cat B the policy allows import of non localize parts at 10% rate of custom duty and localize parts at 25% for three years for manufacturing of Cars and LCV where as in case of Trucks, Buses and Prime Movers imports of all parts are allowed at prevailing rate of custom duty applicable to non localize parts for three years.

In addition to above for the first time Government imposed more new laws regarding welfare of customers and about the safety of passengers. A technical Institute is also proposed to trained and educate young Pakistanis in the different field of Automotive manufacturing.

This policy really attracts many new investors and following European and Chinese Companies step in to Pakistan Automobile Industry; Observation and Recommendation on AIDP 2016-21

After studying the AIDP 2016-21 and discussions with Automobile community following recommendations are given to furth er impro ve t he po licy;

1-

There should be a Guide Book containing details about the documents required to be submitted with the new application.

A step by Step procedure after accepting the new application with time frame be mention in the Guide Book so that an investor may know the time required for acceptance of an application .A check list to be provided to each new comers to carefully check the required d o c u me n t s a t t a c h m e n t b e f o r e submitting to BOI. BOI / EDB should not accept incomplete application at any cost and should return the same to submitter instantly. This will save the time at BOI and EDB end to accelerate the approval procedure for the new applicants.

2- AIDP chapter related to HS &E very well described about the vehicle fitness and its impact on the environment, however it should be made mandatory to attach NOC from EPA that the assembler have taken all necessary steps to protect the environment from the air and water hazards , with the application

at the time of submitting the application on or before issuance of Manufacturing certificate from EDB.

3-

Implementation of International Vehicle Standards should be framed out Urgently for the safety of customer as well as to capture the export market of CBU. Government of Pakistan is given this task to PSQC but so far no remarkable policies are framed out by PSQC. PSQC should be given a time frame to complete this important task.

4- EDB should frame out minimum Man Power requirement for a new green field project and for the existing assembly plants. EDB team while verifying investor facilities should take personal interviews from the staff about their qualification and experience.

5- To promote and upgrade vending industry it must be made mandatory to arrange a TCA or JV with one of the new investor Principal vendor and local vendor so that new technology may be introduce in the country.

The writer is a former Chief Operating Officer of Karakoram Motors and Pak China Motors and presently rendering his services as Management Consultant to Automotive Sector

www.automark.pk | May-2018 | Page 46

Monthly AutoMark International

Automotive News - Update

KCCI demands reduction in duties on imports of motorcycle parts P r esiden t Kar achi Chamber of Commerce and Industry Muffasar Atta Malik, while expressing deep concerns over the unnecessary and exorbitant taxes and duties imposed on the imports of motorcycle spare parts, advised the authorities at Federal Board of Revenue to reduce these taxes and duties with a view to discourage smuggling and provide relief to common man.

He informed that motorcycle spare parts are subjected to 35 percent custom duty, 11 percent additional duty, 17 percent sales tax, 6 percent income tax and 3 percent additional sales tax, which terribly raise the cost of these spare parts and make them unaffordable for the poor public.

“Hence, the government has to review the entire situation and accordingly take steps to reduce these taxes and duties in order to provide some relief to the masses who are already suffering badly in the ongoing era of inflation”, he

added.

He pointed out that the legal importers of motorcycle spare parts have limited their activities nowadays due to high taxes and duties, making these imported motorcycles spare parts uncompetitive in the local markets, particularly in a situation when these spare parts are widely being smuggled into the country.

President KCCI was of the opinion that the government will have to take stringent measures to effectively deal with widespread smuggling of motor cycle spare parts which would not only encourage legal imports but also the national exchequer from the grave losses because of widespread smuggling.

He hoped that FBR authorities would review the situation on priority basis and ensure some relief to this sector in the forthcoming budget which would be widely welcomed by relevant stakeholders and the public at large...

PAAPAM voices opposition over tariff concessions on import of spare parts Auto part manufacturers have voiced discontent over the government’s move to offer tariff concessions on import of spare parts and accessories which are domestically manufactured.

Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) said the adding of the sector in free trade agreements (FTAs) would be against the government’s own policy.

It said not only would this impede coming investment but would have negative implications for the industry.

Paapam said this in its budget proposals submitted to the government on last month.

It emphasized the Auto Development Policy (ADP 2016-2021) approved by the Economic Coordination Committee (ECC) of the cabinet in March 2016, was the sole document governing the industry. The association said giving concessionary custom duties in the F T A’ s fo r l oc a l iz e d p ar ts w as unfathomable, as it could cause the shutdown of the entire auto parts industry.

Paapam pointed out these FTA’s would deny the national exchequer of tax revenues from non-localized completely knocked-down parts.

It urged the authorities to remove antidumping and regulatory duties on auto engineering steel imports, which wasn’t being manufactured locally.

In the ADP 2016-2021, one percent customs duty on imports of raw materials not manufactured locally has been levied.

Paapam said changing existing tariff rates by charging regulatory and antidumping duty on raw materials was unreasonable . It requested the government to reduce corporate income tax rate to 25 percent which would be at par with regional countries.

Also, Paapam called for the rescinding of the taxes introduced by Finance Act 2017 which include 7.5 percent tax on profit before tax if a listed company does not share 40 percent of the annual profit in form of bonus shares or cash dividend.

The association called for the revoking of alternative corporate tax and minimum tax regime, which were backward and anti-industry.

And it highlighted general tax of minimum tax was increased from one percent to 1.25 percent in Finance Act 2017-18, which was contributing to effective tax rate being over 50 percent for some industrial sectors.

11 Pak firms exhibited at Istanbul trade fair Automechanika Istanbul (05-08 April, 2018) is Turkey’s Leading International Trade Fair for the Automotive Industry.

The automotive industry is one of the four “locomotives” of the Turkish economy. It assembles some of the country’s largest exporters and represents one of the leading investor industries.

1,359 exhibitors from 36 countries showcased their innovations related Auto industry and hosted more than 43,000 trade visitors in 2018 edition of Automechanika Istanbul.

12 Country Pavilions showed their showcases in Automechanika Istanbul 2018. Trade Development Authority of Pakistan (TDAP) has organized a National Pavilion consisting of 10 companies in Automechanika Istanbul 2018, below are the names: Ahmed Traders, Ghauri Tires, Matchless Engineering, Peoples Steel, Razzaq Engineering, Royal Tech, Sohail Engineering, Stahlco, Super Horn House and Thermosole Industries Infinity Engineering has participated directly in Automechanika Istanbul 2018.

Agha Zeeshan from Thermosole shared his views as, “We are very much satisfied with this exhibition” Mian Muhammad Affan, Director Sales and Marketing of Ghauri Tyre said that, we had a very good involvement throughout the fair as customers from Russia, Jordan and eastern part of Europe visited us.

Zeeahan Ahmed, Director Export of Vertex said that Automechanika Istanbul is always a successful fair and we participated in this fair for the 5th time and we always got very good response continually.

PASPIDA (Pakistan Auto Spare Parts Importers & Dealers Association) has organized an official delegation of their 20 executive members to visit fair.

Around 50+ buyers from Pakistan visited, which showed importance of Automechanika Istanbul in Pakistan Auto Industry. Wajih-ul-Hassan Khan (Delegate of PASPIDA) said, “I regularly visit Automechanika Istanbul and I am satisfied with the quality of exhibitors”.

www.automark.pk | May-2018 | Page 47

Karachi City Transport - Update

Monthly AutoMark International

Sindh govt launches air-conditioned bus service in Karachi

The Sindh government has started a Peoples Bus Service in the city in collaboration with a private bus company.

According to details the fare will approximately be Rs20 to Rs40 and initially 10 buses would run on the streets of Karachi, between Quaidabad and Tower, till 11pm.

The buses has 30 seats each and have separate doors for men and women to enter.

According to a plan approved by the Sindh government last year 600 intercity buses were going to be introduced in Karachi.

This was decided in a meeting presided by the Sindh Chief Minister (CM) Syed Murad Ali Shah.

The CM had said that the Sindh government will help transporters in generating funds for the new buses, while their insurance will be taken care of by the Sindh Insurance Company.

It was decided that the Sin dh government will give Rs2 billion through Modaraba, and provide a 30 per cent credit risk guarantee to banks.

Sindh Transport Minister Nasir Hussain Shah said that in order to cover a city like Karachi it was imperative to provide at least 8,000 buses for the city. The number was given to adjust the maximum number in each vehicle.

Pak Suzuki declares profits of Rs900mn for Q1FY2018 Pak Suzuki Motor Company Limited (PSMC) in the first quarter (Jan-Mar) 2018 posted a profit after tax (PAT) of Rs0.9 billion with earnings per share of Rs10.99, down by massive 31 per cent Year on Year (YoY) as against a PAT of Rs1.3 billion in the same period last year.

Sales revenue in first quarter 2018 grew by 32 per cent YoY on the back of a 58000 units increase in off-takes (up 18

per cent YoY), thanks to the impressive sales of Wagon-R, Cultus, and Mehran, and a 4 per cent YoY increase in average selling prices.

Gross margin for the quarter fell by 3.85 percentage points YoY on the back of an 18 per cent YoY increase in steel prices, and 11 per cent rupee depreciation against the Japanese Yen (JPY). This dented earnings considerably as gross profit fell by Rs287 million with an EPS

of Rs3.49 per share.

On a quarterly basis, the OEM registered a handsome 24 per cent QoQ growth in earnings, on the back of a 7 per cent QoQ rise in sales revenue owing to better off-take (+16000k cars QoQ). Higher average prices meant that gross margins saw an uptick of 51bps QoQ, despite rising steel costs and a constantly falling Pakistani rupee.

www.automark.pk | May-2018 | Page 48

My Karachi Exhibition

Monthly AutoMark International

Car / Light Vehicle Price List SUZUKI WAGON-R VXR 1000cc Euro II WAGON-R VXL 1000cc Euro II MEHRAN VX 800cc Euro II MEHRAN VXR 800cc SUZUKI SWIFT 1.3L DLX SUZUKI SWIFT 1.3L Automatic NEW CULTUS VXR MT 1000cc NEW CULTUS VXL MT 1000cc NEW CULTUS VXL Auto 1000cc BOLAN VX 80cc EURO II BOLAN CARGO RAVI PICK-UP STD 800cc E2

SUZUKI MEGA CARRY 1.5 MT SUZUKI CIAZ (A/T) 1400cc SUZUKI CIAZ (M/T) 1400cc JIMMY 1328cc JLSX MT APV 1.5L GLX MT (Petrol) VITARA GL+ AT 1.6 VVT

Rs. 1047,000 Rs. 1164,000 Rs. 709,000 Rs. 762,000 Rs. 1,405,000 Rs. 1,541,000 Rs. 1,270,000 Rs. 1,391,000 Rs. 1,528,000 Rs. 784,000 Rs. 750,000 Rs. 726,000 Rs. 1,499,000 Rs. 1,999,000 Rs. 1,859,000 Rs. 2,142,000 Rs. 2,418,000 Rs. 3,490,000

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

Rs. 10,000 Rs. 10,000 Rs. 10,000

TOYOTA COROLLA

HONDA Honda Honda Honda Honda Honda Honda Honda Honda Honda Honda

BR-V i-VTEC 1500cc BR-V i-VTEC S 1500cc Civic i-VTEC 1.8L Civic i-VTEC Oriel 1.8L City 1.3L Manual City 1.3L Prosmatec HYUNDAI City 1.5L Manual City 1.5L Automatic Aspire Manual 1.5L Aspire Prosmatec 1.5L

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

2,263,000 2,363,000 2,513,000 2,663,000 1,713,000 1,853,000 1,773,000 1,913,000 1,903,000 2,043,000

PRINCE DFSK PAKISTAN Rs. 849,000 K01 997CC, 2700mm K07 997CC, 6 Seater, AC/PS/PW Rs.1,049,000 C37 1500CC, 11 Seater,AC/PS/PW Rs.1,599,000

25,000 25,000 10,000 10,000 50,000 50,000

XLI VVT-i 1.3L M/T GLI VVT-i 1.3L M/T GLI VVT-i 1.3 A/T ALTIS 1.6L Dual VVT-i A/T ALTIS 1.8L Dual VVT-i A/T Corolla Altis M/T SR 1.8L (Grande CVT) Corolla Altis A/T SR 1.8L (Grande CVT) FORTUNER A/T 4x2 2694CC

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

1,899,000 2,054,000 2,129,000 2,279,000 2,469,000 2,519,000 2,669,000 5,857,000

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

Rs. 2,574,500

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

TOYOTA REVO DAIHATSU Vigo Champ-V MT Revo G M/T 1GD-FTV 2755cc 4,380,000 Revo V A/T 1GD-FTV 2755cc Vigo Champ-G AT 4,955,000

Rs. 4,005,000

FAW MOTORS

FAW Carrier 1000cc FAW Carrier 1000cc (Flat Bed) FAW X-PV 1000cc Std FAW X-PV 1000cc A/c FAW V2 1300cc M/T Monthly AutoMark Magazine - International Local Assembled

Rs. 819,000 Rs. Rs. Rs. Rs.

809,000 919,000 969,000 1,154,000

Price updated May- 2018

Rs. 41,800/= Rs. 43,800/= Sr./ Product & Model Name No. 1. Honda CD-70 2. Honda CD Dream 3. United US 70 4. United Extreme 70 5. Road Prince Bullet 6. Road Prince 70cc 7. Unique UD-70 8. Super Power SP-70 9. Super Power Deluxe 10. Super Star SS-70 11. Hi-Speed SR-70 12. Ravi Premium R1

Retail Price Rs. 63,500/= Rs. 67,500/= Rs. 43,500/= Rs 44,500/= Rs. 45,500/= Rs. 41,000/= Rs. 45,000/= Rs. 44,700/= Rs. 55,000/= Rs. 44,000/= Rs. 44,000/= Rs. 46,950/=

No.

Brand & Model Name

Retail Price

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

24.

25.

Honda CG-125 STD Honda CG-125 DX Honda CD-125 Dream Honda CB-150F United US-125 Euro 2 Road Prince 125cc RP Twister 125cc RP WEGO 150cc Super Power SP 125cc Super Power Archi 150cc Super Power SP 200cc Unique UD 125cc Unique UD 150cc Crazer Super Star SS-125 Super Star SS-125 DLX Hi-Speed SR-125cc Hi-Speed Infinity SR-150 Metro MR-125 Regular Ravi Piaggio Storm 125 Yamaha YBR-125Z Yamaha YBR-125G Yamaha YBR-125 Crown CR-125 Zxmco ZX-125-Euro II Zxmco ZX-200cc

Rs. 107,500/= Rs. 126,500/= Rs. 106,900/= Rs. 162,000/= Rs. 70,000/= Rs. 67,000/= Rs. 108,000/= Rs. 180,000/= Rs. 69,000/= Rs. 140,000/= Rs. 2,00,000/= Rs. 70,000/= Rs. 165,000/= Rs. 68,800/= Rs. 67,000/= Rs. 72,000/= Rs. 175,000/= Rs. 67,000/= Rs. 108,000/= Rs. 115,900/= Rs. 133,900/= Rs. 129,900/= Rs. 65,000/= Rs. 71,600/= Rs. 2,45,000/=

Sr./ No. 13.

14.

15.

16.

17.

18.

19.

20.

Product & Model Name Ravi Hamsafar-70 Bionic AS-70 Crown CR-70 Metro Premier+ 70cc

Retail Price Rs. 43,500/= Rs. 45,500/= Rs. 42,000/= Rs. 45,600/= Rs. 41,800/= Rs. 43,800/= Rs. 42,300/= Rs. 44,000/=

Ms Jaguar MS 70 Euro- II Ms Jaguar MS 70 ( DREAM)

Zxmco ZX-70 Regular Leader LD-70

No. Brand &Model Name 1. Honda Pridor 2. United US-100 Euro 2 3. Road Prince 110cc 4. Unique UD-100 5. Super Power SP-100 6. Hi-Speed Classic SR-100 7. Hi-Speed Alpha SR 100 8. Super Star SS-100 9. Crown CR-100 10. MS JAGUAR MS 100 11. Zxmco ZX-100-SS 12. Leader Classic LD-100 Sr./ Product & No. Model Name 1. SD110 Sprinter ECO 2. GS-150 SE Euro-II 3. GD 110s Euro-II 4. GS-150 5. GR-150 Sr./ No. 1.

2.

3.

4.

5.

Product & Model Name Inazuma GW 250 Intruder M800 Hayasuba GSX1300R Bandit GSF650SA Honda ADA CB250F

www.automark.pk | May-2018 | Page 56

Retail Price Rs. 86,000/= Rs. 50,000/= Rs. 48,500/= Rs. 80,000/= Rs. 60,000/= Rs. 47,500/= Rs. 82,000/= Rs. 57,000/= Rs. 52,000/= Rs. 48,800/= Rs. 51,600/= Rs. 52,900/= Retail Price Rs. 111,400/= Rs. 163,500/= Rs. 136,000/= Rs. 143,500/= Rs. 219,000/= Retail Price

Rs. 599,000/= Rs. 1,700,000/= Rs. 2,600,000/= Rs. 15,50,000/= Rs. 6,40,000/=

International Automotive Industry - Update

Monthly AutoMark

Toyota to introduce 10 new electrified vehicles by 2020 Toyota to Start Deploying Vehicle-To-Vehicle Tech In 2021 Toyota says it will start equipping models with technology to talk to other vehicles starting in 2021, as it tries to push safety communications forward.

The company says most of its U.S. models should have the feature by the mid-2020s.

Vehicle-to-vehicle signals can warn others of heavy braking ahead or that another vehicle is headed into their path.

Vice President of Product Planning Andrew Coetzee (Cute-ZEE) says the cars would use dedicated airwaves to send signals up to 984 feet (300 meters).

Coetzee hopes other automakers will join. Others are testing it and standards have been developed so they can communicate.

Toyota is leading on automatic emergency braking, making it standard on all but four models. The industry has agreed to make it standard on all models in 2022.

Yamaha to accelerate development of plug-in hybrid engines for Toyota and electric two-wheelers Yamaha needs to be able to provide those engines more quickly, at a lower cost, and to a higher level of quality than Toyota can do in-house if it’s going to remain as a supplier.

Yamaha Motor Co. is rushing to develop engines for hybrid and plug-in hybrid ve hic l es a s ke y c u sto m er an d shareholder Toyota Motor Corp. accelerates a push into electrified powertrains.Yamaha needs to be able to provide those engines more quickly, at a lower cost, and to a higher level of quality than Toyota can do in-house if it’s going to remain as a supplier, Yoshihiro Hidaka, Yamaha’s new chief executive officer, said in an interview at the company’s headquarters in Iwata, central Japan. Yamaha has supplied high-performance internal-combustion engines for Toyota since 1967’s iconic 2000GT sports coupe.

Toyota Motor Corporation announced that it plans to introduce to the Chinese market plug-in hybrid electric vehicle (PHEV) versions of its “Corolla” and “Levin” passenger cars in 2019 and a battery electric vehicle (BEV) model based on its “C-HR” / “IZOA”(1) compact SUV in 2020.

Including these, Toyota plans to introduce 10 new electrified vehicles in China by the end of 2020. And, by further promoting its local production of electr ic moto rs (po wer tr ain components), batteries, inverters, and

other electrified-vehicle core technologies, Toyota aims to further accelerate its China-based vehicle electrification efforts.

The PHEV versions of the Corolla and Levin were unveiled today during the opening day of the Beijing Motor Show.

Both models are expected to have a BEV driving range of 50 kilometers or greater, and in 2019, Toyota will begin producing them in China, marking Toyota’s first overseas production of PHEVs.

China's Alibaba snags AI deal with Daimler, Audi, Volvo Chinese online retailing giant Alibaba is teaming with global auto brands for the first time to supply artificial intelligence technology for home-tovehicle connectivity.

Alibaba A.I. Labs, the company's artificial intelligence unit, will supply its AI + Car system to Daimler, Audi and Volvo for deployment in China, Alibaba said on last month.

The system allows people to talk with their cars through Alibaba's Tmall Genie, the brand's digital assistant device. From a remote location, they will be able to operate the car's door locks, turn on the air conditioning, plan a driving route or calculate a journey time.

Alibaba said it will also allow customers to perform certain diagnostics on a car's engine, battery and other components and check such things as fuel levels and the car's location.

The setup uses voice recognition technology that enables people to voice commands.

The partnership between Alibaba and the European luxury brands underscores the rapid pace at which China's burgeoning high-tech industry is crowding into the automotive segment.

Alibaba, sometimes dubbed China's Amazon, is part of the country's big tech firm triumvirate that includes Baidu, "China's Google," and Tencent, the country's Facebook.

Alibaba owns a stake in Chinese electric vehicle startup Xiaopeng Motors and runs unmanned auto vending machines that dispense Ford vehicles to prospective customers for test drives.

"Identifying how to serve car users with Tmall Genie's skillsets is one of our top priorities," Chen Lijuan, Head of Alibaba AI Labs, said in the release. "We hope the collaboration can create a more intelligent and personalized mobility experience for consumers and enhance users' commute by exploring more AIpowered services."

Looking ahead, Alibaba A.I. Labs said it will integrate more speech interaction and natural language processing features into its vehicle operating systems. The technology will support voice commands for tasks such as activating car navigation and infotainment systems.

To ensure security, Alibaba said its systems will use voice print technology to identify authorized car users before any voice command will be executed.

Ford hopes China easing will speed up Zotye venture approval Ford Motor Co's Asia head said he hoped Wednesday he hoped recent Chinese recent Chinese moves to relax ownership moves to relax ownership rules in the rules in the country's auto market would country's auto market would speed up speed up regulatory approval for its EV regulatory approval for its electric joint venture with local firm Zotye vehicle joint venture with local firm Automobile Co. Zotye Automobile Co. Ford Motor Co's Asia head said on

www.automark.pk | May-2018 | Page 57

International Automotive Industry - Update

Monthly AutoMark

NEW SUZUKI ERTIGA GAINS MORE SPACE AND FRESH ENGINE Suzuki Motorcycle India launches

GSX-S750 at Rs 745,000

The motorcycle comes with a 749 cc four-cylinder fuel-injection engine that produces 84kW at 10,500 rpm and 81Nm at 9,000rpm, the company said.

Suzuki Motorcycle India, the whollyowned two-wheeler arm of Suzuki Motor Corp, on Wednesday announced the launch of its first sub-1,000 cc bike, GSX-S750 in India, priced at Rs 745,000 (ex-showroom, New Delhi).

The motorcycle comes with a 749cc fourcylinder fuel-injection engine that produces 84kW at 10,500 rpm and 81Nm at 9,000rpm, the company said in a statement.

Other features include a chiselled fuel tank, vented front fender, light rear fender, molded mirrors, and angular tail section with integrated LED taillight.

"GSX-S750 is not just the first new offering from Suzuki for the new financial year, but is also our firstproduct in the sub-1,000cc big-bike segment," Suzuki Motorcycle India managing director Satoshi Uchida said.

With this launch the company aims to further strengthen the GSX brand.

The bike is equipped with a three-mode traction control system that ensures superior control over engine output helping prevent rear wheel spin.

Suzuki has unveiled its new Ertiga at the Indonesia International Auto Show, with the seven-seater MPV growing in size and gaining a new 1,5-litre petrol engine.

Running on the Japanese brand’s latest Heartect platform (also underpinning the new Swift, Ignis and Baleno), the second-generation model is 130 mm longer (at 4 395 mm) than the original, which along with added width results in what Suzuki calls a more “spacious cabin environment with expanded luggage space”.

Under the bonnet, the new-generation Ertiga features what Suzuki describes

as a “newly developed” 1,5-litre petrol engine delivering a “combination of fuel efficiency and performance”. Expect the five-speed manual and four-speed automatic transmissions to carry over.

While the outgoing 1,4-litre mill makes 70 kW and 130 N.m, the new unit is worth a little more, at 77 kW and 138 N.m.

The new Ertiga will be manufactured in both Indonesia and India, with exports planned from both countries. If the new model is confirmed for South Africa, expect our market to receive its shipments from India.

The Volvo S90 Ambience Concept – a car that connects with your senses Volvo Cars, the premium car maker, today reveals the S90 Ambience Concept, an industry-first sensory experience that synchronises visuals, sound and scent to redefine in-car luxury.

The S90 Ambience Concept, making its public debut at the Beijing Auto Show in China, is based on Volvo’s top-of-theline S90 Excellence three-seater executive saloon and focuses on chauffeured passengers in the rear seat.

The passengers can personalise the car’s atmosphere by using the intuitive smartphone app to choose one of seven visual themes synchronised with audio and scent.

“The Ambience Concept redefines luxury by taking it beyond material choices, creating a car that connects with your senses,” said Robin Page, Senior Vice President Design at Volvo Cars. “The

design explores how people feel inside the car and enables them to influence their own mood and well-being.”

The visual element transforms the car’s ceiling according to the selected theme – i n c l u d i ng N o r t h e r n L i g ht s , Scandinavian Forest, Swan Lake, Archipelago and Rain – each providing a different mood scaling from relaxing to invigorating. There is also a Nocturnal theme for resting, while Freedom gives a boost of fresh and uplifting energy.

The synchronised audio plays through the car’s Bowers & Wilkins premium sound system, which includes small tweeters in the headrest for an immersive sound experience.

Each theme is matched with one of four bespoke scents, created by Byredo, which deploys simultaneously from a portal in the centre console.

Tesla Gives Panasonic an Electric Shock The Japanese company's reliance on its U.S. customer is a weakness.

Hitching a ride on Tesla Inc. these days seems precarious at best, especially for its sole battery supplier Panasonic Corp.

Shares of the Japanese company plunged as much as 9 percent after a spate of Tesla bad-news stories over the past few weeks. First, the U.S. electriccar maker reported yet another fatal crash, then a shortfall in production targets for its mass-market Model 3 and to top it off, a rating downgrade by Moody's Investors Service on liquidity concerns. The cost to insure Panasonic's

five-year debt -- a broad gauge of risk - has risen sharply.

That Panasonic is dancing to Tesla's tune is no big surprise -- it usually does.

Investors have long seen the electronics giant as a derivative play on its U.S. customer. Their thesis: more Teslas, more batteries. To be fair, Panasonic does have solid battery technology -better than the likes of Samsung SDI Co. -- and has focused its efforts on the auto industry. In fact, moments of weakness in Panasonic stock are often seen as an opportune time to buy.

This time, there are other factors to consider.

First, the level of Panasonic's reliance.

The Osaka-based company revised down its sales and operating profit estimates for rechargeable batteries for the full fiscal year in February because it had to push out sales plans in North America to “future periods.” Its hyped-up gigafactory partnership with Tesla in Nevada has undershot expectations.

Panasonic is piling capex into the $5 billion project, in part raising debt to do so. Moody's expects the company to shovel more than 50 percent of its capital spending into the automotive segment including battery plants.

www.automark.pk | May-2018 | Page 59