Monthly Automark August 2012

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Monthly

A Very Happy Independence Day To You

AUTOMARK

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

New Trade Policy

Editor M. Hanif Memon Sub Editor Dr. Raja Irfan Sabir

Technical Editor Muhammad Shahzad

Advertising Manager Abdul Khaliq

Circulation Manager Tahir Siddiqui

Computer Operator MurtazaHanif

Web Master Mustafa Hanif

CONTRIBUTING IN THIS ISSUE Muhammad Shahzad Haider Nawab Ali Hassan Shahzad Tabish M. Owais Khan M. Yousuf Shaikh Ali Abass

Advisors Imtiaz Rastgar CEO, Rastgar Group & CBI External Expert, Ex-chairman EDB Islamabad Haider Nawab Advisor Planning & Development Toyota Southern Motors Toyota Defence Motors Karachi Muhammad Yousuf Shaikh Founder & Chairman Pakistan China Motorcycle Industry Council Karachi Abdul Majeed Sheikh President, AOTS-ABK Dosokai, Karachi Regional Center & Director (MME), NED University, Ex-Director Pak Suzuki Karachi Engr. IHT Farooqui General Manager Plant Karakoram Motors (Pvt) Ltd., Karachi J. Pereira Senior General Manaer After Sales Service and Parts Master Motor Corporation Ltd., Karachi

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

AutoMark REGD: SC-1330

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

As the government is finalising upcoming Trade Policy likely to be announced next mo n t h , i n d u s t r i a li s t u r g ed t h e government to initiate consultation with the private sector that is the real stakeholder.

The LCCI office-bearers; President Irfan Qaiser Shiekh, Senior Vice President Kashif Younis Meher and Vice President Saeeda Nazar in their joints statement hoped that the new Trade Policy would result in the enhancement of export competitiveness to enable Pakistan companies to overcome the shocks of international economic downturn.

They said that the government should realize that the country needs a paradigm shift to enable local businessmen to become globally competitive and export those products which are valued more in the international market.

According to them the country’s industry is facing multiple challenges including an acute shortage of gas and electricity, poor innovation, low labour productivity, little Foreign Direct Investment and lack of product and geographical diversification. They said that the electricity and gas shortage is the major factor therefore the government should focus on the issue that has not only jacked up the cost of doing business in the country but also fast making us uncompetitive.

Businesses need short to medium term certainty in the interest rate for investment but in Pakistan the situation is the other way round as despite repeated appeals to the government the interest rates are not only higher than in the region but also very high when are compared to the developed world.

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CONTENTS

Monthly AutoMark Pakistan’s Chinese Motorcycle Industry seeks new way forward Exclusive Article by M. Yousuf Shaikh, Founder & Chairman, PCMIC

11-14

Used cars import thriving & import date sheet

15-16

Motorcycles Production Figures for year 2011-2012

14-15

How to make a wise decision 17-18 to buy best used car Exclusive article by Mohammad Shahzad Crown Lifan Group offers low price car parts in Pakistan Exclusive Interview by M. Hanif Memon

19-20

IMC launches partial payment scheme

21

Country still importing 50 per cent auto parts - Automotive update

27

Auto industry rejects unrealistic development plan

28

CNG Sector - New update

35-36

How 25 year old bikes will compete with Indian influx?

Exclusive Article by Ali Hassan

38-39

Launch of Range Rover by Sigma Motors

40

Local Assembled/Imported car price

41

International Automotive News - update India & China

42-43

SEM Asia 2012, A hat-trick of Dismal Performances Exclusive review by Shahzad Tabish

45-47

Current Motorcycle price list

48-49

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By M.Yousuf Shaikh, the Founder & Chairman, PCMIC

Monthly AutoMark Magazine

Pakistan’s Chinese Motorcycle Industry seeks new way forward On the other hand Pak Chinese Motorcycle assemblers are facing Stiffer Competition within themselves

Muhammad Yousuf Shaikh, the Founder & Chairman of Pakistan China Motorcycle Industry Council, offers his analysis of the motorcycle trade & industry trends from Pakistan & China. The chairman PCMIC working the Asian market for over a decade, Yousuf expect an emerging of consolidation amongst the numerous Chinese manufacturers in near future in Pakistan as ongoing process in China because the Chinese motorcycle assemblers are facing stiffer competition within themselves.

Industry Require intensive investment & huge financial resources and company mergers the only a new way forward for the Chinese motorcycle industry. The result of this consolidation could have profound implications on the Pakistan’s motorcycle industry over the next decade. To reach him, email: pakchina.mic@gmail.com

Chinese motorcycle we may yet be witnessing the beginnings of a motorcycling revolution here in Pakistan, the likes of which has now been seen since the Japanese burst on to the scene in the 1970’s.

Pakistan’s Chinese motorcycle industry continues to see strong growth in terms of production and marketing, but

revenues and profits below expectations are forcing the industry and investors to explore alternative opportunities, including working with international partners and expanding into research and development (R&D) services.

Pakistan producing millions of smalldisplacement motorcycles on an annual basis but there is no successful local development done by any player due to an extraordinary favors to older auto industries by the government and a race of production number game and money making by some Chinese assemblers through simple trading with their Chinese counter part instead of technology transfer. "The Chinese motorcycle industry has entered a dead end as the sales competitions in Pakistan markets are fierce and currently the prices of Chinese motorcycle are much lower then the present cost of manufacture units due to competition of the gaining more n more production number of some Chinese brands motorcycles here in Pakistan," which should wipe out the whole industry if the production number game will not finish. As per calculation of PCMIC members the present cost of all brands Chinese 70cc motorcycle is about Rs.45000/ unit without any portion of R&D but old price about Rs.40000/unit is still valid in markets due to hard competition within Chinese brands.

The majority of the motorcycles being manufactured in Pakistan are the 70CC motorcycles. Most of the parts used in the frame, suspension, engine etc are interchangeable, or can be used with minor adjustments.

In addition to above the source of parts for production & still lower prices of some local motorcycles is the availability of smuggling of motorcycle spare parts

on massive scale from China through Sust Border and Af gha n Tra ns it Trade, a flood of commercially imported/smuggled Chinese clone parts in the parts markets for replacement which acutely never replaced but imported for assemblers at paper less, file noting less and simple great WeBOC, e-Customs system and also imports by Vendors under SRO 655 to import parts in dismantle condition to take benefit of concessionary rate of duties and to pass through the imported Chinese parts as local manufacture to Chinese assemblers.

All of this is because of the high rate of duty and high valuation of Chinese clones parts on import of components as per EDB’s quotas at a difficult manual PRAL’s OCS system for assemblers which are very costly especially for small & medium assemblers.

To smash the smuggling of motorcycle parts and unauthorized assembling of motorcycle with smuggled parts or pass through parts and the smuggling trend and smugglers out of business the only solution is to curb smuggling by slash the Anomalies in SRO’s on auto sector, reduce the customs duties and accept the true transactional values of importers cum assemblers.

Also the PCT should revise & clearly specify the exact rate of customs duty to be applicable at the import stage without consulting any concessionary SRO to end confusion. The rates of the customs duty mentioned on the page of the PCT would be exactly the same rate which would be applicable at the import

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Monthly AutoMark Magazine

Exclusive Article - continued

Chongqing, China

October 11-14, 2012 stage. Customs tariff would be made transparent and predictable for the investors, rate of import duty mentioned in the Pakistan Customs Tariff would be applicable on all sources (OEM’s, Commercial & vendors) imports and there would be no mismatch in rates of duty mentioned in tariff and SROs. FBR also try to reduce numbers of SROs for transparency purposes and the cleansing of the SROs would be continue, while the whole system cannot be suddenly corrected overnight and it would take some time to gradually improve the system by taking measures in the right direction.

SRO’s on auto sector is not in the favor of small & medium Chinese motorcycle industry. These SRO’s favoring only joint ventures / largest producing units. till the amendment in the SRO 655 it should be allow to take benefit to all approved OEM’s as allow to all vendors to import auto parts in dismantle condition on concessionary rate of duty to pass through t he p arts t o t he real beneficiaries.

The excuse to keep SRO’s on auto sector & high tariffs just to protect the some large industrial unit was not workable anymore as "we have seen the result by doing this for last 65 years." The economy could grow four times more than the current economy because only 1/4th of the potential market is legally put into practice hence the government in return is only generating 25 percent of what they could actually be generating and was missing out on the rest 75 percent.

Motorcycle production has increased from 100,000 units at the start of the century, to around two million, almost two million motorcycle manufacturing country don’t have the manufacturer of the key parts of motorcycles such as the complete engine, carburetor, Drive Chain, hundreds of engine separate components ( Cylinder Head, Ring Piston Set, Bearings, Bushes, Timing chain, crankshaft, and many other components ) and also the Handle

switches, Lock Set, Wheels Hubs & Br eak s , C o mp l et e F ro n t R ear Shorkabsorbers and speedometer movements are 90% imported through different systems as there is no true manufacture in Pakistan.

The engine is a core part of the motorcycle, and the demands for motorcycle engines are highly related to the demands for motorcycles.

Motorcycle engine market has great potential as a result of the booming motorcycle demands. The compound annual growth rate of motorcycle engine sales in China between 2003 and 2011 was 8.12%. Its sales reached 30.02 million units in 2011 but here in Pakistan not a single engine factory established as a result the engine is 100% imported through smuggled by afghan transit , sust border, imports under replacement parts in ckd and under SRO 655 for vendor to import parts in dismantle condition.

Better performance motorcycle engines are needed due to the demand shift from ordinary twowheeled motorcycles to leisure and recreational twowheeled motorcycles.

Motorcycle engines are in the process of upgrading to low emission, low vibration, low noise and low heat load engines with displacements over 125cc.

Along with the sales of three-wheeled motorcycles in China & Pakistan, demands for their engines are also growing fast. The compound annual

gr o wt h ra t e of t hr ee - w hee l ed motorcycles was 26.3% between 2005 an d 2011. Most three- wheeled motorcycle manufacturers in China & Pakistan don't have the ability to produce three-wheeled motorcycle engines, and technologies to produce such engines are different from those of two-wheeled motorcycle engine due to their exclusive features, so market demands will be satisfied by those engine manufacturers which have the R & D and manufacturer abilities for threewheeled motorcycle engines.

It is suggested that the EDB interact with PCMIC to identify these common parts for localization, based on production figures the total OEM market for these parts can be determined. In addition the replacement market demand can also be estimated at various price options. For those parts where critical volumes are available, the EDB & PCMIC should try and foster “embedded” linkages between the Assemblers, vendors, importers and banks as consortium that are willing to make the investment.

Pakistan China Motorcycle Ind us t ry C o u nci l Tal ks a cq u i s i t i o n & M e r g i n g Last month I tentatively hosted a gathering of the luminaries and minions of the Pakistan Chinese motorcycle industry. The meeting, at PCMIC house here in Karachi, was a success as most attendees agreed that they were facing the same problems as each other when considering the future direction of the industry. All are agreed on the future shape of the industry, one of merger and the council (PCMIC) incorporate export clerks and managers, technical and research and development (R&D) staff and of course journalists and interact with industry concern government depart ments t o strengthen the Pakistan’s Mot orcycle Industry especially small & medium Chinese motorcycle manufacturing companies which are downward.

Inspired by industry issues I was started the Pakistan China Motorcycle Industry Council,

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members of which would convene on a monthly basis in an informal fashion to chew the fat over future of industry, market development and technical upgrading.

the moment I don't think that the motorcycle companies know the best w ay to i nv o lv e t he msel ve s i n international racing, and then on to create brand names that are world recognised, if they can get the right advice from the correct organization that will go a long way to entering Chinese bikes in to world sports. As far as the domestic situation is concerned we have a brilliant race circuit at Shanghai (which is fully compliant with F IM regulat i ons) and an ot her international class circuit at Zhuhai. I think we first need to concentrate on a first class domestic ‘Superbikes' series and the rest will follow naturally."

Extensive Operation Mode Spoils the Chinese Motorcycle Industry The last hope of the Chinese motorcycle industry was taken away by unfavorable policies. People in the industry seem to be shy to talk about their profession.

They no longer hold hope for the government and no longer complain about the unreasonable taxes and valuation of Chinese motorcycles parts as they are beaten by the harsh reality, and have lost their confidence. They begin to believe that Chinese motorcycle industry has become a sunset industry.

Will the Chinese motorcycle industry have any prospects? Actually this is a brainless question as there's no industry that suffers a deficit but a company. This doesn't mean that an industry will never die, but its dying cycle is not this short.

Product functions will be upgraded, so will an industry, in order to meet the certain demand of human beings.

Motorcycles take care of one of the 'four basic necessities of life (food, clothing, shelter and means of traveling): travelling. Motorcycle has big market demands in Pakistan especially in Southern Punjab.

There are currently 73 Original Equipment Manufacturers (OEMs) in the motorcycle Industry. These include 3 branded OEMs Honda, Suzuki & Ravi Piagio and 70 are unbranded Chinese clone OEMs operating production lines in Pakistan alone, a good proportion of them ‘one line' export factories that provided cheap models for the Afghanistan and domestic markets.

Unlike Honda CD70 and CG125 share a huge proportion of the market the Chinese market was shared by a multitude of smaller companies. All These OEMs are supported local manufacturing units employing close to 150,000 persons. The number of Pakistan factories still operating is now down below 60 as per production figures released by EDB. Smaller companies should have to join to become middle-sized companies in an effort to compete with traditional manufacturer product markets and to expand their range to pastures greener.

It is evident that the Chinese industry has stepped up its efforts to shake the dreadful reputation of the first wave of motorcycle production. It has also increased the distribution of spare parts to the extent that now Chinese motorcycles have evolved from 3rd world transport tools to very useful commuter bikes in developing countries; but this is not enough.

For Chinese companies to truly compete with the Japanese giants in terms of quality and brand recognition will r e qu i r e i n t e ns i v e i n v es t m en t .

Investment requires huge financial resources which may only be found by conglomerating existing companies in to "super-companies" that can compete

with the Japanese and Europeans on a level playing field.

To finally achieve parity with the Japanese and European giants it is imperative that Chinese machines make a mark on international motorcycle events. The Chinese assemblers are aware that they have to emulate the development of Honda as a bench-mark of the industry. Honda's success in the Pakistan & worldwide was paramount in enforcing their brand as a world leader. As yet only Loncin have raced at the very top level in moto125 although Shineray produce top quality off-road models and have had success at international level. Many people feel it is only with big collaborations that this transition can occur.

"There will never be only four motorcycle companies like in Japan, but when you consider that the number of working factories has halved in the last seven years in china and is still dropping, and the number of units exported is rising, it would be no surprise if the number of motorcycle companies operating in 2020 in china was under 20! If this happens as expected these super-factories will be a match for anyone in the world."

With six Chinese motorcycle companies now producing 600cc motorcycles it would seem that the first step of the industry evolution has happened. The willingness of the Chinese motorcycle industry to invite a delegation from FIM to the CIMAmotor exhibition this October has surely signaled a positive intention to involve themselves more with international motosport, an independent motorcycle exporter and fellow member of the council opines "at

Pakistan Chinese motorcycle manufacturers

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are not real producers in a sense, but assemblers. It may well be asked, which Pakistan Chinese motorcycle manufacturer has a real R & D institution? Is there any motorcycle in Pakistan which is not influenced by Japanese motorcycle technology? Yamaha YD100, Honda CG125, Honda CG125 Deluxe and Honda CD-70 all imitated by Pakistan Chinese motorcycle assemblers.

dealers in turns.

Almost all people in the Chinese motorcycle industry complain about the harsh market conditions. Let's just leave the systematic problem of the industry alone and carry out market research to see what we can find. The living environment of the Chinese automobile industry, which belongs to the same industry as the motorcycle does, may not be better than that of the motorcycle industry. It receives more attention from the government as it contributes more GDP to the government.

Japanese motorcycle manufacturers develop engines and motorcycle frames first to guarantee the basic features of the product, and then develop its appearance whereas Chinese motorcycle manufacturers decide to imitate the appearance of a certain motorcycle first, and then choose its engine and modify its frame. Motorcycles developed by the above two ways differ greatly in performance.

It is a great loss of core motorcycle technology only by imitating foreign motorcycles. Howev er, Chinese motorcycle manufacturers are still in existence. The mass Pakistan market enables the profitability of Chinese motorcycle manufacturers even though they stick to the extensive operation mode but gaining of production numbers game the large producing assemblers denied the reasonable profit taking themselves which cause the small producing assemblers in loss. Have motorcycle manufacturers in the Chinese motorcycle industry carried out any basic research in the industry apart from complaining about all kinds of unreasonable taxes and valuation matter? Have they put forward any plan for environmental protection and

technical upgrading in the industry?

There's a complete set of standard laws and procedures to follow for recycling and selling used motorcycles in Thai lan d. Paki stan mo to rcycl e manufacturers should do the same, and learn t o sho uld er more soci al responsibilities to usher in an ordered development of the industry.

The Chinese motorcycle industry still lives on the memory of its past prosperity, and doesn't notice any change in the market. Some provincial motorcycle dealers expressed their determination to go with the motorcycle business until the end, and would never invest a single penny in other business. It's understandable that they were doing so to prevent terminal motorcycle dealers from withdrawing their capital from the industry. In my opinion, there's no need for doing this as seeking profit is the unique feature of all businessmen. It's better to do a refined operation demonstration than this.

We can also carry out surveys in other industries like the electric vehicle industry, home appliance industry, and finally we can conclude that nothing is easy. What we need to do is to sit down quietly? No! We think about market demands again, reset the prices which should include the reasonable profit of assembler & dealer, (R&D), investment targets on localization and lead the consumption trend correctly. Only by doing this, we can advance strongly and fast in the flawed Chinese motorcycle industry.

Monthly AutoMark Magazine Only official global partner from Pakistan for CIMAMotor-2012 11 - 14 October Chongqing - China

Chinese motorcycle consumption can no long satisfy the consumers' sense of honour, and consumers with rigid demands turn reasonable when buying motorcycles. No profit will be made if Chinese motorcycles cannot meet consumers' changing demands. The Pakistan Chinese Motorcycle industry will get lost if there's no profit. The decline of the industry affects motorcycle

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Monthly AutoMark Magazine

Automotive Sector - Update

Small used cars import thriving Out of total import of 55,703 units in July-June 2011-12, the share of cars up to 1,000cc is 24,530 units followed by arrival of 17,872 units of 1,300-1,500cc used cars. The government earned Rs31 billion in duties and taxes from total imports of used cars of which collection of customs duty alone is Rs20 billion.

Import of five year old used cars under transfer of residence, personal baggage scheme and gift schemes have been thriving despite the fact that the sale of locally assembled cars also posted growth of 23 per cent in 2011-2012 as compared to 2010-2011.

The third largest import of 7,854 units registered in 1,001 to 1,300cc category followed by 4,340 units import from 1,601 to 1,800cc engine power. Jeep (4×4) imports stood at 799 units.

Chairman All Pakistan Motor Dealers Association (APMDA), H.M. Shahzad said, out of total import of over 55,000 cars in 2010-2011, around 53,900 used cars came under personal baggage scheme.

Total imports of vehicles in 2010-11 recorded at 16,814 units in which 85 per cent were small cars. The government collected Rs12 billion in shape of various duties and taxes. The imports of used cars can cross 100,000 units in the current fiscal year if the government allows increase in the age limit of vehicles to 10 years from five years, he said. Besides, the government should allow commercial import of vehicles and scrap the existing various schemes for import of used cars.

On higher engine power vehicles, he urged the government to remove 50 per

cent regulatory duty and by agreeing the demands, the government can fetch Rs50-60 billion in terms of duties and taxes.

It seems that cash rich car lovers appear fascinated by the designs and colours of used imported vehicles rather than pondering over availability of their parts and accessories.

However, Shahzad claimed that there is no problem in getting parts of these imported vehicles as rising volume of vehicles also encourages market traders to intensify the imports of parts.

Many people are seen maintaining both locally assembled and imported vehicles at their homes. However, only few used imported vehicles and enjoy good resale value. The discontinuation of locally assembled Daihatsu Coure from May 2012 and also Suzuki Alto may force buyers to go for imported used cars up to 1,000cc and locally assembled Suzuki Mehran till the car assemblers introduce new 1,000cc models in the market.

Used cars import lowers country’s local production The PAAPAM has said that the local production of cars has registered a massive reduction of 22,000-25,000 units owing to import of 50,000 used cars, besides hurting the domestic auto parts vending industry. “The domestic auto parts manufacturers are feeling the brunt of the government’s inconsistent policies as the demand for locally produced vehicles has slowed down.

This is evident by the fact that the size of the local market has shrunk to currently 30 percent from its peak level of the year 2007 when some 200,000 vehicles were produced, observed Business Forum of Punjab and PAAPAM Chairman Syed Nabeel Hashmi observed that precious foreign exchange is being ‘wasted’ on import of spare parts for these used vehicles, which will also cause a loss to the exchequer to the tune of $50 million only in one year. The influx of used cars in the country has been taking a heavy toll on local auto assemblers who purchase 60 percent of

the aut o p art s from domest i c manufacturers, he added. The BFP and PAAPAM chairman maintained that the domestic industry has tremendously developed during last few years mainly by investing huge capital but also with the help of agreements of transfer of technology with world renowned equipment makers. All of this is being locally produced by more than 400 vending companies. Almost 2,200,000 skilled workers are directly and indirectly associated with these local vending companies. PAAPAM vice chairman Munir Bana said that the traders in violation of the rules are importing more than five years’ old cars and getting them cleared through foul means. It has also been noted that spare parts are also smuggled in many imported cars. The penalty imposed by Ministry of Commerce, for importing cars which are over 5 years old, will not hurt these unscrupulous traders as they will under invoice the vehicles and will

continue to thrive. He said that during the last 12 months almost 50,000 used vehicles have been imported, amounting to 30 percent of the total market demand for automobiles in the country, causing a loss of over Rs14 billion revenue to the government in terms of relaxations allowed pertaining to depreciation allowance. He said that it is strange that most of the imported cars of 1000cc (or higher) such as Vitz, Corolla, Belta, Premio, Axio, Mira, Probox, Land Cruiser and Pajero are being sold in the price range of Rs 1.1m to Rs 3.5m. One can guess now that these vehicles, mostly purchased by elites, are being imported at the cost of the local automobile industry’s growth.The scrupulous dealers purchase copies of passports and other relevant documents from so called overseas Pakistanis to flourish their businesses of used cars. And the government has joined them in fulfilling their agenda to turn the country into a junkyard.....

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

Monthly AutoMark Magazine

How to make a wise decision to buy best used car (Part I) Buying a used car can be risky, but it can be also very rewarding. The road that leads to any used car purchase decision is riddled with pot holes and in some cases, land mines or it could be smooth as airport runway. You can make it easy for yourself by doing some research in finding the right balance of value and risk before making a final decision. If you take some time to do the research first it can minimize your buying risk and maximize your satisfaction and peace of mind motoring.

Please note, some of the used car buying tips may not apply fully in Pakistan, as Automark is an esteemed international magazine read in many countries...

When you are planning to buying a used car, you should consider three most important factors. First, it should be built with quality, with a good standing track record in the auto industry. Secondly, it should be wellcared & maintained with a good service history. Thirdly, it should be driven safely, without previous collisions or curbside hits.

If your expected car meets the all three of these important factors, then there is a good chance that you will enjoy peace with peach, rather than stuck with a sugary coated lemon.

What kind of car do you need?

The key to making the right choice is finding the car that fits your needs or your family needs. Your selected car should provide reliability, safety, performance, comfort, convenience and fuel economy.

If you examine your needs rather than wants, you will quickly discover what the right car is for you. Take a look at your lifestyle and ask yourself: Is it for primary use or as a secondary vehicle for the family?

Will the car be used to commute for business, work or pleasure?

How many kilometres you will drive monthly?

Will it be used to car pool your family to and from school, sports practices, etc? How much cargo you will carry?

Will it be used for the family vacation? Hauling a trailer to the cottage? How many people do you need to transport?

What kind of driving you will be doing most often? Will it be used mainly for short trips or driving long distance?

How much you can spend? Do you want to purchase or lease?

D id y ou c on si de r ot he r operating cost such as insurance, fuel, parking and maintenance?

Let your needs, not your wants, make your final decision. Don’t buy “motion”

with “emotion”. There is no need to overextend yourself by purchasing a vehicle that goes beyond your needs. Do not glance at “Gourmet Dinner” where all you need to have a “Burger”.

Set your priorities and make a smart buying decision. Narrow down your choice with the systematic approach and up-to-date, unbiased reliable source.

Surf the internet and ask friends and colleagues for their opinions. Review and check the consumer report. Based on your needs, you can choose a small economical car for yourself or a larger vehicle for your family. Be sure you have all of the information before you start to look for bargain.

Pros and Cons of buying a Used Car There are numerous advantages to buy a used car. The cost is major benefit.

A one- year-old car is about 20 to 30 percent cheaper than a new car and used cars depreciate less as it has already taken its big hit in depreciation.

Financing a used car has never been easier — leasing is even available through some selected banks. This may not apply in Pakistan as the selected cars build the positive equity and the value appreciate with the time compared to USA and Canada, where vehicle depreciate very rapidly faster than

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

Monthly AutoMark Magazine

Generally, dealerships ensure that the used cars they sell do not have a lien placed on them. They also provide information on the vehicle's history and usually provide an extended warranty as an option. driving down the hill.

Based on automotive technological innovations, late model used cars are more reliable and have better safety features today than ever before. Many used cars are still under the factory warranty such as lease return or daily rentals.

In addition, you can choose a higherend and better equipped car than you’d be able to afford as new. The money saved by buying a used car on cost can be invested or saved to use on operating costs such as fuel, insurance, parking and maintenance. You may miss the new car smell but you can smell savings.

Furthermore, the classic reasons to av oid used car s are lack of dependability and the expenses of unexpected repairs, especially, when you are buying “As is” from an unknown place or party. You could be buying someone else’s troubles. You probably have to sacrifice your choice of colour or trim or model and options.

Most authorized dealers now sell certified used cars, which must pass through very extensive and intensive critical safety, performance and appearance inspection before being put on sale.

Where to Buy … searching for a source New-Car Dealers: A promising source if you can afford to pay top dollar with a peace of mind motoring is your local new-car dealer. These franchise dealers generally have many late–model tradeins, lease returns (with maintenance record) or from fleet agencies. The best car on the lot is usually the one that the dealer sells. Dealers also sell demo cars; these cars are well-maintained and mainly driven by staff at the dealership. These cars could be a best buy, but it will depend on the make, model and condition. Authorised dealers have repair facilities and often provide a warranty. So, if anything goes wrong with the car later, you may not be out in the cold.

Generally, dealerships ensure that the used cars they sell do not have a lien placed on them. They also provide information on the vehicle's history and usually provide an extended warranty as an option. However, some dealerships provide better service and are more upfront about providing information on a cars history.

Independent Used Car Dealers: These dealers also offer better fair prices, but their stock may include auctionedoff, retired taxis, fleets, police cars and orphaned cars from other provinces or states. These vehicles might not have

maintenance records or collision history.

If you decide to shop at a used car dealer outlet, choose ones that have been at the same location for a while, shady operators tend to move often. However, all car dealers must be registered with provincial authority such as OMIVC. Rental-Car Agencies: Rental cars are just like any used cars.

They retire their fleet cars by taking them out of service by one to two years of age at low kilometres, and sell them directly to individuals or in bulk to used car dealers. You may get a decent clean car with minor scratches. Most have the advantage of having been properly maintained and include the balance of a factory warranty if any. The rental company absorbed the largest portion of the depreciation and tend to use no haggle pricing, and you'll often find that pricing is higher than it should be. You still need to be careful because you are buying a car which has gone through multi-driving habits.

Auction Cars: Most cars repossessed by lenders or banks are periodically auctioned off. Such cars may be risky for first time buyers because they probably haven’t had the best care.

Watch for “AS IS” deals, better stay off!

Private Sellers: Get to know the seller.

They may be genuine private sellers, selling their cars for many valid reasons, but you have to make fair judgment.

This may be the least expensive source of used cars and the most common among first time used car buyers. Prices are substantially lower because private sellers don’t have any overhead and usually don’t have any guarantee. Make sure to check car history on collision, you may go on car fax or car proof web site to find out details. You can also check fair prices from the red or black book to get an idea of your selected car price in local markets. Be careful do not open your auto wallet to the unknown.

Buying from someone you know could be better choice because you’re likely to know more about the car’s history. But be aware that bad feelings may arise between you and the seller (neighbour or colleague) if your purchase does not turn out the way you want it to.

Most private deals are “as is

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Monthly AutoMark Magazine

Face to Face - Interview

Crown Lifan Group offers low price car parts in Pakistan The after markets offer a wide choice in car and bike parts as per consumer’s buying power and with a big price difference irrespective of their arrival through various channels.

Many parts are available in at least three to four qualities in different prices and of different countries’ make as claim by the traders which indicate that not only smuggled parts are finding way in larger quantities but misdeclared and underinvoiced parts also rule the markets.

However, big price variation in both bike and car parts in the markets make buyers doubtful as they do not have any

An Exclusive Interview with Muhammad Farhan Hanif, Chairman and CEO, Crown Lifan Group.

by Hanif Memon knowledge about the parts quality and its price. Most buyers having limited income also become bound to buy low quality parts.

Nobody is certain as to which kind of parts they have purchased as markets are flooded with smuggled, misdeclared and underinvoiced parts. In such circumstances one cannot say with satisfaction that high price means good quality or the buyer has really procured genuine parts which have landed through legal channel.

Dealers with their tongue twisting technique misguide the buyers by charging high prices on various parts claiming its originality and country origin import from formal channel by paying heavy duties.

A tough competition is going on between market players as many dealers are importing parts from reputed Chinese companies while others are catering the demand of price conscious buyers by importing low quality parts.

Many automotive magazines are getting good advertisements from various

companies offering different parts and accessories at reasonable rates.

In car parts – authorized dealers of locally produced vehicle charge huge prices for servicing and changing of any parts claiming to be original and imported after paying proper duties and taxes. They know that the cash rich buyers will not bother to recheck the prices from the markets.

At a time when prices of every item are going up, consumers mostly of used cars are very price conscious and prefer purchasing parts at affordable price.

They are not bothered whether these are smuggled or arrived through informal channels.

For example, duties and taxes on import

of bike parts are: 35 per cent customs duty, 15 per cent additional duty, one per cent FED, five per cent income tax and 16 per cent sales tax, making a cumulative impact of over 70 per cent.

In cars’ parts import, there is no additional duty.

In the above business scenario, CRLF Company has dared to start import of four wheeler parts mainly of Pak Suzuki Motor Company vehicles.

M. Farhan Hanif, Chairman, Crown Motor Company said that he is trying to provide a big price relief to the Suzuki car owners as compared to price of parts prevailing in the markets. “We intend to provide parts at 60-70 per cent less price of parts with six to one year warranty depending on the parts,” he said.

He said it is difficult to survive in a market which is dominated by 50 per cent market share of smuggled parts both in bike and car segment.

He said All Pakistan Motorcycle Spare Parts Importers & Dealers Association (APMSPIDA) has been frequently asking

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Face to Face - Interview (continued) the government to cut the import duties and on commercial parts in order to curb smuggling but so far the government has not paid any heed.

The Association, he said, has further pointed out towards serious and alarmingly growing smuggling of motorcycle spare parts on massive scale from China through Sust Border and Afghan Transit Trade, which is thriving because of the high rate of duty.

He recalled that lowering of duties in other items has encouraged arrival of go ods t hrou gh legal channel s.

In an interview to MONTHLY AUTOMARK he said after the immense success of CRLF Motorcycle parts, Crown Group moves into four wheeler category.

CRLF automotive parts were launched in a very unique way at the event which was graced by the presence of Advisor to Chief Minister, Sindh Khuwaja Izhar-ulHassan and from Chamber of Commerce Mr. Anjum Nisar, Mr. Shamim Firpo and others.

The journey of Crown Group started from 1992. The CEO and Chairman of Crown Group, Muhammad Farhan Hanif talked about in favor of mechanics and gave practical solutions to their routine problems regarding automotive parts.

He then threw light on the basic market sale procedure and how a normal importer works for personal motive. In his speech he told the audience about how CRLF works and a perfect mix of Price and Quality is maintained, in order to obtain customer delight at all levels.

Advisor to Chief Minister, Sindh K huwaj a I z har- u l - Hass an sai d Company’s like Crown Lifan are playing a major role in economic development of our country and specially Karachi.

He also told the audience about the CRLF’s relation with him and how much MQM supports CRLF’s effort in the development of our country.

Automotive launch was something that audience did not expect. CRLF Automotive Parts were launched in a Fashion Show, where 12 top models walked on the ramp with CRLF Automotive Parts. The crowd was in awe after seeing this unique style of automotive launch. In short, the crowd witnessed for the 1st time ever, an Auto

Parts Fashion Show.

CROWN LIFAN COMPANY is a line of motorcycle spares, providing quality products for over a decade. It has maintained its position as market leader since the year 2003 due to its quality and strong distribution network across Pakistan. Its operations are not just restricted to Pakistan; it has operations in China, Bangladesh and other Southeast Asian Countries.

Meanwhile market sources said that besides the menace of smuggling, the government’s revenue collection is also hit by under invoicing, misdeclaration.

Ille gal impor t prac tic es a re marginalizing documented imports besides bleeding the exchequer through massive under invoicing and effectively stopping indigenization in the country.

According to the data obtained from Federal Board of Revenue (FBR), some importers are importing auto spare parts at absurdly low rates depriving the government of millions in taxes and levies.

R e ce n t l y cu s t o m s c l e a r e d 2 7 consignments of fenders that were grossly under invoiced from June 22, 2011 to August 25, 2011 under custom clearance numbers starting from IHC1863886-220611, on June 22 to IHC1931240-250811 on September 25.

The fenders were cleared at assessed value ranging from $0.2085 per fender to $7.379 per fender. Most of the fenders were released at assessed value of $2.48 per piece against actual unit of measurement which is Kilogram but cleared at unit. On the other hand, the same fenders are imported by OEMS at $30 to $40 per fender which is almost the same if compared with market selling prices.

The data reveals that huge tax evasion is witnessed in import of fenders and hoods only, to the tune of Rs14.32 million through massive under invoicing of up to 1300 cc cars in the period from June 2011 to August 2011.

Sources in the industry said that a genuine importer always declares actual import value which is always higher than the weight per kg fixed under SRO 329 based on origin to origin. On top of actual invoice price, OEMS are paying 35 per cent import duty, 18 percent sales tax and two percent presumptive tax as compared to the duty paid by the importers involved in illegal practices and fooling the concerned custom officers by clearing goods in units

Monthly AutoMark Magazine instead of per KG actual weight.

The commercial importers paid cumulative duty of Rs 0.51 million on the import of fenders on the 27 consignments only mentioned above. If the duty was collected on the same rate as the genuine importers, the national exchequer could have been richer by Rs 7.297 million on the same fenders.

The case of hoods import was no different than the fenders. More than 30 importers during June 2011 and August 2011 imported hoods at various rates that were assessed $0.1022 to $30.601 per hood. The regular imports of a manufacturer, however, of the same or similar hoods were valued at $79.07.

The sources expre ssed their astonishment over the fact that the customs staff cannot assess the fenders at same value as they charge the genuine importers or as per SRO 329 which says that goods are to be cleared in kg subject to origin. In case of hood, it is 2.48 per kg from Thailand and at average a hood weight is approx. 11 kg which make declared value to Rs 27.28 per unit instead of 2.48 per unit. Moreover, how the assessing officers assess the under invoiced fenders at ridiculously low values which does not even cover the cost of the material used. “These fenders would grab more price if these are shredded and sold as raw material in the open market,” they said adding that even the packaging is costlier than the value assessed at the time of clearance at ports.

Bypassing state-imposed duties provides the importers involved in malpractices with a huge undue advantage over genuine importers in the local retail market, they added.

The import ers paid cu mulative government levies of Rs 1.18 million on the import of above 32 consignments.

If the duty was assessed at even the 80 per cent of the price on which OEMs import the same parts, the revenues would have surged to Rs 15.5 million.

The government thus suffered a loss of Rs 14.32 million on account of evasion of duties on under invoiced hoods and fenders in three months.

The question remains same that who make the law and who breaks it. The concerned officers are not interested in these gray imports; they must terminate officers involved into these cases and also punish importers/traders who are not loyal to our beloved Pakistan....

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Monthly AutoMark Magazine

Automotive Sector - Update

IMC launches partial payment scheme In view of sinking sale, the company will produce 1,000 less cars and LCV in July as compared to 4,500 per month.

However, he ruled out the possibility of giving any price discount on cars to the buyers when sales were down.

“We have closed the production for at least 10 days in the current month,” Parvez said adding delivery period has already been shortened as the dealers have sizable number of unsold stocks Indus Motor Company (IMC) is introducing partial payment scheme on all of its Toyota variants from July 31.

Talking about terms and conditions for partial payments, Parvez Ghias, CEO IMC told a press conference on July 30, that this option is available to individuals as well as corporate bodies with which the customer may make an initial payment of Rs250,000 for Corolla, Rs500,000 for Hilux and Rs10,00,000 for imported CBU vehicles through a

pay order/demand draft in the name of IMC at the time of applying for booking of a vehicle.

He said that this scheme was provided as per desire of the government and Industry Ministry that auto industry should improve the payment system.

Earlier, the assembler used to take full payment from the customers at the time of vehicle booking.

This scheme, he added, will be useful in case the car delivery period exceeds over one month. The company is also striving towards minimising delivery period of vehicles.

Paapam seeks certification on Japanese old cars The local automotive parts industry has demanded of the Pakistan government as well as Japan to certify all imports into Pakistan to ensure radiation-free vehicles.

Syed Nabeel Hashmi, chairman Pakistan Associaiton of Automotive Parts Accessories Manufacturers (Paapam), said that five-to-seven year old vehicles are being freely imported and there is no check on their emission or safety standards. He also asked used car importers to obtain compliance certificates from the exporting country on emission and safety standards as shipment of radiation contaminated cars are on the rise.

Hashmi, who is also the chairman of Business Forum of Punjab, observed that majority of vehicles are not in ownership of overseas Pakistanis and

these are just being picked up and reconditioned in lots from scrap yards which had accumulated thousands of tsunami water damaged vehicles.

These vehicles are being given almost free-of-cost as the Japanese government wants to get rid of this junk, he added.The Fukushima Daiichi nuclear reactor meltdown, he reminded, was the most extensive nuclear disaster since Chernobyl. “At the moment neither Japan nor Pakistani authorities have taken any cognizance of this situation and neither public is being made aware of this probability,” the chairman pointed out....

To minimise the abuse of this facility, in one year, from the date of booking, the customer may make only one application for booking of a vehicle through availing themselves of partial payment scheme, that is, multiple application booking in this scheme is not permitted, and every buyer will have to submit NIC and NTN numbers, he added.

He said that the month of July had remained worst in the IMC’s history in view of all time low orders owing to buyers’ interest towards used cars whose imports were thriving.

In view of sinking sale, the company will produce 1,000 less cars and LCV in July as compared to 4,500 per month.

However, he ruled out the possibility of giving any price discount on cars to the buyers when sales were down. “We have closed the production for at least 10 days in the current month,” Parvez said adding delivery period has already been shortened as the dealers have sizable number of unsold stocks.

On introducing new 800cc cars, in replacement of Daihatsu Cuore, the production of which was stopped from May 2012, he told that there had been talks with Daihatsu Company, however, as the costs are very high it is not feasible to bring a new model of a small car at this time.

On Euro II, he said that the government has convened a meeting in Islamabad on 31st July to discuss the possibility of Euro II compliant diesel and prospects of Euro II diesel version cars. Refineries were under pressure as the Environment Minister was upset as the government had earlier asked the refineries to produce Euro II diesel from July 1, 2012.

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Automotive Sector - Press Relese

Monthly AutoMark Magazine

Honda achieves landmark of 200,000th unit production Associates at Honda Atlas Cars (Pakistan) Limited had a reason to celebrate as the Japanese automaker a d de d ano t he r cha pt e r t o i t s achievement books by rolling out its 200,000th unit. Behind the success are loyal customers backed by workforce that has worked tirelessly at Honda’s production facility to achieve this milestone.

The celebration event was attended by Hiroshi Kobayashi, President of Asian Honda Motor and Chief Operating Officer of Honda Asia & Oceania region.

Who while speaking on the occasion extended his profound gratitude to all valued customers who stood by Honda in critical times arising out of Japan Tsunami and floods in Thailand.

He thanked all Honda customers for making it possible to achieve the landmark of 200,000th unit production.

He also appreciated the efforts of all Honda associates who challenged all adversities through no production period. He further said that Honda Pakistan will continue to raise the bar for itself to achieve 300,000 units target

Honda Atlas team rolling out its 200,000th unit from the factory in shortest possible time.

Speaking on the occasion, Takeharu Aoki, President/CEO of Honda Atlas Cars (Pakistan) Limited, hailed all Honda associates on the achievement.

He shared the success of newly introduced CITY Aspire in Pakistan and expressed positive outlook for times to come.

Aamir H. Shirazi, Director Honda Atlas Cars (Pakistan) Limited during his address, congratulated all associates on the occasion. He encouraged them to continue working with dedication and zeal targeting many a milestones in future.PR

Pakistan seeks to attract General Motors The Adviser to Prime Minister on Industries Muhammad Basharat Raja said that talks were held with delegations of Korean Company and General Motors (GM) to motivate them to invest in Pakistan and he hopes for positive results.

Raja told the National Assembly that the government is considering giving more incentives for investment in car manufacturing in the country. He added that presently one hundred and fifty thousand cars are being manufactured in the country and fifty thousand are being imported annually which are not sufficient to meet requirements.

General Motors, the world’s largest automaker based on sales has brands like of Cadillac, Chevrolet, GMC, Opel

and Vauxhall under its belt. In Pakistan, General Motors markets its products through Nexus Automotive Limited, the exclusive importer and progressive manufacturer of the automaker’s products in the country. Nexus started manufacturing Chevrolet Joy in Pakistan in December 2005 whereas other GM products sourced from the global GM

net wo rk are also p lan ned f or introduction to the local market. Nexus uses idle capacity at the Ghandhara Nissan Limited plant at Port Qasim to assemble Chevrolets, under the GM co n t ra ct as se mbl y ag re em en t .

The project estimated value is $15 million and GM-Chevrolet has provided full support to ensure that the local components and the car assembled here meet GM quality standards and customer expectations.

Auto sales in fiscal 2012 stood at 157,325 units according to the data released by the Pakistan Automotive Manufacturers Association. In terms of car sales, Pak Suzuki Motor Company is leading with 95,142 units followed by Indus Motor Company and At las Honda.... ..

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Monthly AutoMark Magazine

Automotive Sector - Update

Country still importing 50 per cent auto parts The PAAPAM chairman said Japanese goods enjoy consumer’s confidence all over the world as well as in Pakistan.

Despite a strong Yen and high prices, consumers prefer Japanese products in Pakistan.

The share of local content in vehicles needs to be increased, as the country is still importing almost 50 per cent of the aut omotiv e parts. There is an opportunity for Japanese investors to fill the remaining half, as it will cut manufacturing costs in Pakistan and enhance profitability of Japanese investors.

This was stated by the Pakistan Association of Automotive Parts and Accessories Manufacturers while terming 2012 a special year for PakistanJapan relations, as was declared by the President Asif Ali Zardari too. The PAAPAM sought further investment and technical collaboration with the Japanese automobile companies for high-tech auto parts manufacturing in Pakistan.

Keeping in view of the 60th anniversary of Pak-Japan diplomatic relations, PAAPAM and BFP chairman Syed Nabeel Hashmi, observed that it is the year of celebrations and also a year of reflection on what more needs to be done to take relations of Pakistan and Japan to new heights through new investment and transfer of high technology especially in auto sector.

He also greeted the Honda Pakistan, the Japanese automaker, for adding another chapter to its achievement books by rolling out its 200,000th unit. Behind

the success are loyal customers backed by workforce that has worked tirelessly at Honda’s production facility to achieve this milestone, he added.

The chairman urged the Japanese companies to increase the share of the local content in the automotive parts.

He said automobile sector in Pakistan is completely dominated by Japanese companies and Japan’s share in car and truck market is almost 100% and it has almost 50% share in the motorcycle market. It has a major share of the market in other vehicles.

The PAAPAM chairman said Japanese goods enjoy consumer’s confidence all over the world as well as in Pakistan.

Despite a strong Yen and high prices, consumers prefer Japanese products in Pakistan.

He said Japanese manufacturers are producing goods at a high cost in Japan for Pakistan and the neighbouring markets. Japanese investors, he said, can take advantage of low cost production, abundant raw material and cheap labour available in Pakistan.

He said by virtue of its unique geographical location, Pakistan can serve as hub for Japanese production houses.

He said our location is such that we can serve a market of over three billion in our neighbourhood.

PAAPAM vice chairman Munir K. Bana

said Pakistan’s investment policies have been consistent and investors’ friendly. recounted various incentives available t o the investors including freedom to invest without any restrictions, complete ownership of the businesses, equal treatment to local and foreign investors, free repatriation of profits and capitals, and generous tax and customs incentives for bringing raw materials, plant and machinery into Pakistan.

He said despite the challenges over the past decades, Pakistan’s economy has shown great resilience. He said Pakistan has maintained a positive rate of growth despite terrorism and natural disasters.

He said Pakistan is the 6th most populous country in the world and offers a large consumer market. He said energy shortage was a great challenge.

However, we are not deficient in potential and resources in meeting the challenge, he added.

PAAPAM vice chairman said that Pakistan looks towards Japan and Japanese technologies to assist it in meeting the energy challenge too and it will be a mutually profitable venture, he added....

Japan considers Pakistan major development partner Japan considers Pakistan as a major development partner and the two countries will continue to support each other as true friends.

Ambassador of Japan Hiroshi Oe on last month said Japan would continue to provide financial and technical assistance to Pakistan, as “We believe this country has a great potential for the future”.

There are spectacular development and investment opportunities in various fields as few countries are gifted with

such natural and human resources, the ambassador said.

Talking to Chairman Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Standing Committee on Diplomatic Affairs, Sheikh Humayun Sayeed he said, “Pakistan is facing difficult challenges which will be over soon.”

He said Japan would continue to strive to deepen mutual understanding through economic, educational, cultural and political exchanges.

Hiroshi Oe said increasing population and negative perception was a problem that should be tackled on urgent basis.

Sixty Japanese companies are operating in Pakistan.He informed Japan government was hosting investment seminars for Pakistan by end August in Tokyo, Osaka and Nagoya.

In October, another trade mission is coming to Pakistan comprising representatives of main Japanese companies who will visit Karachi, Islamabad, Sialkot and Lahore...

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Monthly AutoMark Magazine

Automotive Sector - Update

Auto industry rejects unrealistic development plan EDB has convened a meeting of Auto Industry Development Committee (AIDC) on July 17, 2012, to be attended by the representatives of Pakistan Automotive Manufactures Association (PAMA) and Pakistan Auto Parts Manufacturers Association (PAPAAM) to discuss AIDP with special focus on new investment in auto sector.

The Engineering Development Boards (EDB) unrealistic Auto Industry Development Plan (AIDP) has been rejected by local auto industry and line Mi n is tr ie s be cau se o f la ck o f consultations, informed sources told media.

EDB has convened a meeting of Auto Industry Development Committee (AIDC) on July 17, 2012, to be attended by the representatives of Pakistan Automotive Manufactures Association (PAMA) and Pakistan Auto Parts Manufacturers Association (PAPAAM) to discuss AIDP with special focus on new investment in auto sector.

The sources said Planning Commission, National Tariff Commission (NTC), an arm of Commerce Ministry and Federal Board of Revenue (FBR) are key opponents of EDB’s AIDP besides the private sector.

Parliamentarians, EDB and Industries Ministry are of the firm opinion that three local car assemblers have formulated a cartel which explains why they are charging higher prices and own money (premium on car prices) on different models.

Kashmala Tariq MNA, Hamid Yar Hiraj, Qudsia Arshad, Khawaja Mansoor Sohail and a number of senators have criticised local car assemblers for charging extra money from people. A couple of MNA’s even accused local assemblers of inducing officials in lieu o f un p r e c e d e n t e d p r o t e c t i o n .

Similarly, local auto vendors, it is

alleged, have their own argument but they play in the hands of the cartel because they have to sell their products to them, commented an official on condition of anonymity.

When contacted, Abdul Sattar Khokhar, a Spokesman to the Ministry of Industries (MoI) told media that new AIDP is almost ready but there are differences on auto industry investment plan which will be discussed on July 17 by the AIDC. In reply to a question, he confirmed that Commerce Ministry which is being represented through NTC has sought some time to study the AIDP. NTC representative attended the first meeting on AIDP but he skipped the second meeting, he added.

Replying to a question regarding FBR’s opposition on the AIDP, he said, FBR was duly represented who did not raise any objection.

When MoI’s spokesman Khokhar was apprised that Mumtaz Haidar Rizvi, recently retired Chairman FBR has confirmed to this correspondent that AIDP was prepared in isolation which

FBR cannot support, he clarified FBR’s representative might not have taken the chairman into confidence but the FBR representative was on board on all matters.

According to sou rces, MoI has repatriated FBR representative Dr.Zubair due to his differences with the incumbent Chief Executive Officer (CEO), Aitzaz Niazi who is seeking twoyear extension.

Senate Standing Commit tee on Industries, in its previous meeting had criticised EDB for its failure to deliver and Kishan Chand Parvani argued that allocation of funds to EDB is a waste of national exchequer.

Asked why Planning Commission is opposing the new AIDP, Khokhar argued that Planning Commission wants customs tariff for new motorcycle industry at five and ten percent.

Honda company maintains that tariff on new entrants in motorcycle industry should not be less than 10 percent whereas Board of Investment (BoI) wants five percent tariff on new entrants.

Yamaha Company, which intends to establish new plant in Pakistan, argues that if GoP sets customs tariff at zero percent the company will be in profit in five years, and in case of 5 percent tariff it will take 6 years to become profitable.

According to sources, Yamaha’s principal is hesitant to invest in Pakistan at 10 percent duty. Finally, Yamaha is ready to invest in Pakistan and the company will introduce new model every year, the sources continued.

Replying to a question, Khokar said that there is a dire need to introduce new small cars between the range of Rs 35,0000 to Rs 400,000 and a Chinese company is expected to come forward to set up a plant in Pakistan.

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Monthly AutoMark Magazine

Automotive Sector - Update

AkzoNobel signs agreement to sell its shares in ICI Pakistan AkzoNobel has reached an agreement to sell its 75.81 percent shareholding in ICI Pakistan Limited to the Yunus Brothers Group for $152.5 million (EUR124. 4 mi llion) . The pri ce represents a premium of 30 percent on the market price when the local stock exchange closed on Friday, July 27. The price is subject to adjustments for cash/debt as at the date competition clearance is obtained and for interest from that date until closing.

The transaction is expected to be completed towards the end of this year, once regulatory approvals have been obtained and the purchaser has completed a legally required tender offer for at least 50 percent of the shares in ICI Pakistan held by the other shareholders.

"We are pleased to have reached an agreement to sell our shares in ICI Pakistan," explained Keith Nichols, CFO AkzoNobel. "We are convinced that the

Yunus Brothers Group is better suited to achieving its obvious potential, while the deal includes conditions to safeguard the terms and conditions of our dedicated employees there."

Commenting on the agreement, Sohail Tabba, Group Director at Yunus Brothers Group, said: "We are delighted with the agreement to acquire ICI Pakistan Limited. The Yunus Brothers Group is keen to further develop the business of the company, working closely with the existing management and employees."

The agreement follows the successfully completed restructuring of AkzoNobel's activities in Pakistan last month, which

entailed the demerger of ICI Pakistan's paints and coatings businesses into the new listed company, AkzoNobel Pakistan Limited. The newly formed company is 75.81 percent owned by AkzoNobel and continues to focus on Decorative Paints, Performance Coatings and Specialty Chemicals.

ICI Pakistan Limited has been a subsidiary of AkzoNobel since 2008, when the company acquired Imperial Chemical Industries PLC. It is listed on the Karachi, Lahore and Islamabad Stock Exchanges. ICI Pakistan's business now comprises polyester fiber, soda ash, life sciences and chemicals.

The Yunus Brothers Group is a leading conglomerate in Pakistan with interest in the cement and textile industries, power and real estate. It had revenues of EUR775 million in 2011....

Auto industry protections to be abolished: PEW While expressing deep concerns over rising prices of locally made vehicles, the Pakistan Economy Watch (PEW) has urged the government to abolish protections for smashing powerful lobby of auto industry in a bid to reduce prices of vehicles.

In a statement issued on July 30, 2012, President Pakistan Economy Watch Dr.Murtaza Mughal expressed dismay over government’s slow move to abolish protections extended to the auto industry in order to bring down the prices of locally made vehicles.

He said the abolishment of protections

extended to the auto industry was essential for smashing the lobby of auto industry which was so powerful that even the government appeared unable to make a policy against their vested interests.

“Government should gradually reduce protection given to the auto industry by reducing the tariff on Completely Built Units (CBU) to ensure availability of imported substitutes for consumers at affordable prices," he said, adding that there was also a need to rationalize tariffs applicable on Completely Knocked Down (CKD) units.

He said the Engineering Development Board (EDB) has proposed a reduction in the tariff on cars up to 1,000cc engine size, from the current 55 per cent to 40 per cent for the next five years; from 60 per cent, to 50 per cent for 1,001cc to 1,500cc cars; and a 5 per cent increase in the tariff of 1,501cc to 2,000cc cars from the current 75 per cent.

He said the EDB has also proposed withdrawal of the 50 per cent regulatory duty on cars exceeding 1,800cc; which it believes is an impediment to the growth of this segment. NNI

Siemens Pak reports higher profit Siemens Pakistan Engineering Ltd has posted a higher profit after tax of Rs.519.050 million during nine months ending June 30, 2012.

According to financial results of the company despatched to Karachi Stock Exchange here Monday, the pre-tax

profit surged to Rs.621.983 million compared to Rs.298.758 million in the same period last year.

The earning per share also improved to Rs.62.94 during the period under review over last year's Rs.17.21.

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Monthly AutoMark Magazine

Automotive Sector - Update

CNG industry to be closed in two years: Dr. Asim The government had bad news for the CNG industry and its consumers in the Senate on last month, as the adviser on petroleum and natural resources announced doing away with the industry in phases during the next two years.

During the question hour, Adviser on Petroleum and Natural Resources Dr. Asim Hussain informed the House that the CNG policy was wrong and the government would get rid of the CNG industry in a few years.

Many questions were deferred because of the absence of ministers concerned and this enraged senators who called for their presence in the House. To a

question by Syeda Sughra Imam, Dr. Asim said that efforts to resolve the circular debt issue were on and in this connection the Ministry of Water and Power had submitted a summary to the Economic Coordination Committee, proposing the partial resolution of the power sector circular debt by issuance of term finance certificates (TFCs).

Dr. Asim said the Oil and Gas Development Company Limited (OGDCL) would subscribe to the TFC to be floated by Pepco or the Power Holding (Private) Limited (PHPL) for Rs82 billion.

The adviser explained that as of April

CNG out, LPG in: PSO to set up 26 LPG filling stations The Oil and Gas Regulatory Authority (Ogra) has decided to give permission to Pakistan State Oil (PSO) for setting up 26 liquefied petroleum gas (LPG) filling stations at its retail outlets across the country, officials say.

Overall, the government is targeting to set up 100 LPG stations at retail outlets of PSO, in a bid to gradually phase out compressed natural gas (CNG) stations over the next two years as per plan announced by the adviser to prime minister on petroleum and natural resources.

According to a senior Ogra official, the petroleum ministry will ensure availability of LPG before granting licences for filling stations in order to avoid shortage as has been seen in the case of natural gas.

“Ogra has made it mandatory for investors to submit documents showing LPG availability before obtaining licences for filling stations,” the official said, adding Ogra had earlier faced pressure to waive this condition.

However, government officials stress that the LPG market is unstable at present as many problems can emerge, particularly those that are related to price volatility and uncertain quantity.

Ogra fears that LPG will disappear from the market if additional supplies are not secured. “The government should sign long-term contracts with producer countries to enhance LPG supply,” the Ogra official said, adding local production should also be increased.

According to an analysis of efficiency levels of different types of fuel, if the cost of LPG is Rs97 per kg, the per kilometre cost for a 1,300cc car will be Rs5.10. In comparison, the per kilometre cost will be Rs4.40 for the 1,300cc car running on CNG if its price is Rs79.20 per kg while petrol will cost Rs8.61 per kilometre if its price stands at Rs103.36 per litre.

“The use of LPG in automobiles can be possible only if the country has longterm supply contracts with other countries,” the official said, adding in case no such contracts were in place, LPG would not be available for the domestic sector after its consumption in vehicles.

Industry people are the view that LPG supply will increase after the start of full supply from Kunner-Pasakhi Deep field.

Besides this, Byco refinery will produce a significant quantity of LPG to cater to the domestic market....

30 this year, the cutoff date for this transaction, total receivables of OGDCL from oil refineries and other firms, were Rs144 billion. He noted that payables by Pepco to IPPs and gas marketing companies were Rs136.3 billion. Likewise, Hubco and Kapco had to pay Rs117 billion to PSO for supply of furnace oil while the PSO owed Rs83 billion to various oil refineries.

The adviser said it would be a paper transaction and the entire proceeds of TFCs would be used to pay claims of Hubco, Kapco and SSGCL. In return, Hubco and Kapco would pay their liabilities towards PSO. After receiving money from Hubco and Kapco, PSO would settle its liabilities towards oil refineries and oil refineries would settle claims of OGDCL. He said that the SSGCL, SNGPL, UPPL and FKPCL would also use the proceeds received to partly settle overdue claims of OGDCL. About Reko Diq deposits, Dr. Asim said the matter was taken to the international court of arbitration by the TCC. On this, Leader of Opposition Muhammad Ishaq Dar proposed that the government refer the issue to the Council of Common Interests.

To a question by Syed Tahir Hussain Mashhadi, the adviser said the occurrences and showings of gold and silver had been reported from various parts of Pakistan, including Balochistan, Gilgit-Baltistan an d Khyber Pakhtunkhwa. He said the reserves of these occurrences and showings had not been confirmed, except for the Saindak and Reko Diq deposits in Chagai. The Saindak Copper-Gold Project was the only project, which was producing gold and silver as a by-product in a nominal quantity, he added......

www.automark.pk | August-2012 | Page 34

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Energy & Transportation - Update

Monthly AutoMark Magazine

200 new CNG stations may be established People who could afford to drive cars get the benefit of CNG. Whereas, motorcyclists, representing lower middle strata of society, use petrol which is 55 percent more expensive than CNG. While the pampered affluent use cheap fuel in their luxurious cars, the deprived poor and lower middle class pay more to run their bikes. Cars are CNG-fitted whereas bikes use petrol which is more expensive than CNG. The scenario undoubtedly adds insult to injury as despite a complete ban on setting up new CNG stations in the country, the energy committee of cabinet is likely to allow setting up 200 new compressed natural gas (CNG) stations in the country.

According to knowledgeable sources, some vested interests are actively pursuing the case of setting up new CNG stations despite severe gas shortages in the country. If the government allows more CNG stations, it is likely to waste millions of dollars by investors as gas reserves in the country are fast depleting and it makes no business sense to open up new CNG stations in such a scenario.

The ministry of petroleum was actively pursuing its case for price increase in CNG but later on it caved in due to political priorities and considering the pressures of election year.

Each day Pakistan produces four billion cubic feet of gas and it has two main gas networks Sui Northern and Sui Southern. CNG sector officially uses 310 MMSCFD gas from both the networks combi ned . How ev er it s act ual consumption is around 400-450 mmscfd a day, as it is difficult for the gas networks to close down every CNG station. Petroleum Secretary is on record having said that CNG is consuming upwards of 400mmscfd across both networks.

According to the state bank annual report 2011/12 supply of daily gas production is around 4 billion cubic feet, whereas the demand of gas in the country exceeds 5.8 billion cubic feet.

Demand for Gas is primarily driven by domestic, industry, fertilizer, power & CNG sectors. Economic Survey of Pakistan 2010-11 reveals that there are

3,329 CNG re-fuelling stations operating in the country, up from 2,068 stations in 2007-08 at Compound Annual Growth Rate (CAGR) of 12.7 percent.

This clearly relates to the high growth in CNG vehicles in Pakistan. Plus the portion of CNG vehicles in the entire vehicle fleet of the country stands at 26 percent which is the third highest in the world.

Sources said that unprecedented 24 percent CAGR growth in CNG sector from 2005-06 to 2010-11, is the highest increase witnessed in any sector. With gas production facing a decline, this growth is at the expense of other value added sectors like fertilizer, general industry and power sector. With growing car ownership and CNG prices being kept at 55 percent of petrol prices, CNG monster is fast eating legitimate gas share of other sectors, sources said.

The total 3,330 fuelling stations in Pakistan, makes up about 18 percent of all CNG fuelling stations in the world that makes Pakistan No 1 country having highest number of CNG refilling stations. In 2005-06 CNG consumed 107mmscfd of gas and in 2010-11 CNG consumed 310mmscfd which is a growth of 23.8 percent CAGR – the fastest growing sector of gas consumption in Pakistan.

If the current trend continues and government does not take measures to cap CNG demand, it is expected that CNG consumption of gas will reach 900mmscfd by 2015-16, which will be 27 percent of local gas supply.

On the supply side Pakistan’s seven largest gas fields are depleting and there are no large gas fields or supplies coming on line for at least 2-3 years. The best option in the future is TajikistanAfghanistan-Pakistan (TAPI), IranPakistan (IP) gas pipelines and LNG import.

Sources said that people who could afford to drive cars get the benefit of C NG. Whe re as, mo t or cy cl i s t s,

representing lower middle strata of society, use petrol which is 55 percent more expensive than CNG. Therefore, in essence, the lower strata of society is paying more in terms of full-filling its fuel requirements besides taking the hit.

Therefore, the price parity of CNG v/s liquefied fuel is burdening limited natural gas reserves in the country, mostly due t o i ncrease in the consumption of CNG sector in the recent decade.

However, CNG use in public transport is a fair use as it benefits poor masses, however, the benefit of using cheaper fuel in the form of CNG is not passed on by the transport mafia to the masses as their fares are pegged with Petrol/Diesel prices, whereas they consume CNG as a fuel in there transport. In fact the use of CNG has resulted in increase in profitability of transport sector. Government should develop a policy whereby the CNG is only allowed for transport sector with fares also pegged at CNG rates.

When deciding on gas allocation, Government should consider economic use of gas and value additions made by the sector. Fertilizer, textile and other manufacturers are value add ed industries producing goods locally with capital and equipment which is already present in the country. This will reduce import of goods and increase exports of locally manufactured items. CNG on the other hand involves substitution of one fuel for another. For CNG the Government should follow the model of other countries and only use it sparingly for public transport. Alternatively LPG (liquefied petroleum gas) solutions should be addressed as a substitute to CNG for vehicles. Like most developing countries priority should be to use gas for the most economic benefiting sectors to ensure that the government could spend money effectively on resolving the endemic energy crisis.....

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Monthly AutoMark Magazine

Automotive Sector - Update

Industrial sector The development of industrial sector is a prerequisite for the economic growth and self-reliance. Pakistan has been able to develop a credible industrial infrastructure. The performance of overall industrial sector, however, in particular that of the manufacturing sector, has remained dismal in the past few years. Globally, manufacturing sector has played a vital role in sustaining long-term rapid economic growth and employment generation.

In Pakistan, however, manufacturing sector contributes only 18.6% to the GDP and 13% to total employment. In 2011-12, manufacturing sector registered a 3.6% growth on year-on-year basis, whereas overall industrial sector growth was 3.4%. Likewise, large-scale manufacturing (LSM), which accounts for more than 70% of industrial output, achieved a nominal growth of 1.8%, and small-scale manufacturing (SSM) 7.5%.

The year 2012-13 is expected to be a continuation of the slow, though sustained, growth of the previous year.

The overall industrial sector is projected to grow 4.1%, manufacturing sector 4.4%, LSM by 3% and SSM by 7.5% compared to previous year. But, will the growth rate set by the government be attained in real terms? This is not likely so for a number of reasons. First, only an allocation of Rs 2,030 million has been made for 2012-13 for industrysp eci fic de vel op me nt p roj ect s.

Comparatively, Rs 2,287 million were earmarked in 2011-12 and Rs 1,548 million in 2010-11.

Secondly, and more importantly, funds utilisation was at a very low level--Rs 770 million and Rs 946 million, respectively in past two years. Due to persistent financial constraints, there appears to be no major improvement in releases of funds by the government during the current financial year too.

There are a variety of factors hampering the growth of manufacturing sector.

These include, though not limited to, shortage of energy, poor governance, obsolete technology, low skills of workers, lack of diversification, rise in cost of doing business and low competitiveness.

Another important factor is declining foreign direct investment (FDI) inflow,

which registered the record lowest figure of $812.6 million in 2011-12. Sadly, the government remains indifferent to the situation. On the other hand, the government failed to introduce enabling policies. A national industrial policy is not in place since 1990s, and, now after devolution of industry to the provinces, the government role has been restricted to that of facilitator only, whereas greater role for industrialisation rests with the provinces. The planned National Industrial Parks could not take off and there is sluggish development in Export Processing Zones. Surprisingly, all the 17 projects identified by the federal government in 2011-12 and 2012-13 for private sector participation relate to communications, transport, energy, health and horticulture, but not a single project in industrial sector.

The economic uplift of the masses, which should be a cherished goal of any government, could not be attained without having a strong engineering, particularly heavy engineering, industry that is catalyst to the industrialisation and a solid basis for technological and industrial viability. The development of engineering sector generates high value addition and brings with it large-scale quality jobs, ensuring sustained economic growth for a longer period of time. The need for development of engineering industry is so vital that it deserves special attention as a priority area. Sadly, the sector remains most neglected. Engineering Development Board (EDB) is not allowed to play its due role for further developing the engineering sector, the objective for which it was created, and looks after automobile industry only, besides mi n i ng an d c hemi c al s ect o rs .

Major industries planned for growth in 2012-13 are chemicals, automobiles, pharmaceuticals, electronics, leather products, paper & board, cement and textiles. Among the 43 development projects to be launched by the government to support industrial sector in 2012-13, there are only two schemes related to engineering sector, namely CA D/CA M training and textile machinery manufacturing. It is ironical that the two state-owned industrial units manufacturing textile machinery

(Textile Machinery Company in Karachi and Spinning Machinery Company in Lahore) were privatised in recent past and have ceased their production operations since long.

There has been no inflow of FDI in engineering sector since 2000-01. Out of total green-field investment of $23,221 million since then, chemical industry received $86.6 million and textiles $28.7 million, whereas the remaining FDI was availed by the consumer industry and services sector.

Board of Investment (BOI) invites investment in construction machinery, cutting tools and steel container manufacturing but there is a lack of strategic focus in promoting the projects.

These projects were launched by the BOI sometime in 2004-05, and so far none of the investors, domestic or foreign, has shown interest in any of the projects. Engineering industrial units have comparatively long gestation period and lesser rate of return on investment. The BOI has to allow incentives to attract investment in engineering sector.

In view of the foregoing, strengthening the manufacturing sector is of critical importance. This will enable increasing our share in export market, to create large scale employment and improving trade balance. Technology is the key to development of industrialisation. But Pakistan severely lacks in the mastery of basic technologies and innovative R&D due to resource constraints.

Acquisition and assimilation of advanced technologies is very expensive, if at all made available by the industrialised nations for transfer to a developing country like ours. The government therefore needs to frame enabling policies and devise action plans for realising fast-track industrialisation, with focus on tec hnological development, to meet the aspirations of n at i o n a nd t h e c hal le ng es of unemployment.

(The writer is retired Chairman of State Engineering Corporation and Vice President of the Institution of Engineers, Pakistan)

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Monthly AutoMark Magazine

Automotive Sector - Update

Motorcycle production reaches 2m units with 95pc localisation In fact, Pakistan has emerged as a global leader in the production of 70CC motorcycles, where no single vendor dominates the market for a single part, but multiple vendors for a single part are available. as well.

The

motorcycle production has increased from 100,000 units at the start of the century to around 2 million units this fiscal year with almost 95 per cent localisation. But the abrupt changes in current policy regarding motorcycle industry and plan to allow new investors to import all motorcycle parts at 5 per cent or less duty will not only be a negation of previous policies, but it will also encourage producers to bypass local vendors and manufacturers, stated auto parts makers.

They said that the sector had progressed tremendously due to consistent policy making on part of the government, but the new policy has threatened the industry growth.

They said that following the Board of Investment’s initiatives to incentivise Japanese motorcycle manufacturers’ re-entry in the Pakistani market at 5 per cent rates had shaken the confidence of investors and local manufacturers.

It is also worth mentioning that the so called new entrant will recover its total investment in 4-5 years in the form of duty concessions alone. “Import of already localized parts at CKD rate of duty will cause a rollback of the deletion program already achieved after a lot of efforts. In fact several new local bike makers have also introduced new 125CC motorcycles but no relaxation in localization was given to them. However, those parts, which are not being developed locally, could be imported but at higher rate of duty,” the auto parts’ association members observed at a meeting held here on Monday.

Addressing the meeting, the managing committee members said that the policy u-turn is worrisome and against the

interests of the country and future industrialization. They say that the portrayal of th e motorc yc le manufacturer as a new investor conveniently overlooks the fact that the same brand was produced and marketed for decades in Pakistan, and was only forced to wind up due to its failure to compete with other brands, especially those from China. They said that the v e n d o rs a re d i sma y ed at t he government’s insistence in granting special status to this OEM on its relaunch.

In fact, Pakistan has emerged as a global leader in the production of 70CC motorcycles, where no single vendor dominates the market for a single part, but multiple vendors for a single part are available.

This indicates the depth of the vendor industry in motorcycle parts. PAAPAM chairman Syed Nabeel Hashmi, addressing the meeting, claimed that Pakistan now exports 125CC bikes

He said that government claimed the new investment would introduce new technology to the country was a mere eyewash, as existing players had introduced the latest Euro-2 engines in their products without any special incentives. “Current players are even willing to import hybrid and EFI-based engines without special incentives”, he said. This is because many engine parts complying with new emission standards are produced locally, he added.

Addressing the meeting, PAAPAM vice chairman Munir K Bana pointed out that Pakistan needs foreign investment, however, the country should not be so desperate in attracting investment by catering to unit specific investment proposals so as to destroy one of its most vibrant sectors. He observed that it was a wrong perception portrayed by various circles in the government that local i nd us try was m anuf ac turing substandard products. “We are making products as per design specification and quality as required by our customers,” he reiterated.

The meeting concluded with consensus that PAAPAM welcomes all foreign investments in Pakistan which only supports the engineering industry and can lead to further growth in the economy and job creation.

www.automark.pk | August-2012 | Page 37

Monthly AutoMark Magazine Only official media partner from Pakistan from CIMAMotor-2012 11-14 October, Chingqing - China

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Monthly AutoMark Magazine

Exclusive Article by Ali Hassan

How 25 year old bikes will compete with Indian influx?

Analysis of Pakistan and India bike industry Irrespective of merits and demerits to our local industry, stake of jobs of thousands of people and future of our huge vendor base after more liberal trade with India – one thing looks certain that consumers may be able to see arrival of used new design bikes of higher engine capacity from India.

However, much will depend of the prices of Indian bikes to lure the buyers.

Many consumers have set their eyes on the bright prospects of running high engine capacity Indian made bikes hopefully from next year as the government looks firm to phase out negative list of items between the two countries by December 2012 thus paving way for more entry of Indian goods.

It is not clear what government has planned about the future of our local bike industry which has been showing tremendous growth after the entry of low priced bikes introduced by Chinese bike assemblers.

How the local industry (Japanese and Chinese bike assemblers) will face the influx of Indian bikes as the government has clearly indicated of eliminating negative list by December 31, 2012.

It is a real fact that the auto vending industry of Pakistan during the last 15 years has come a long way in terms of acquiring technologies to manufacture a wide range of hi-tech products not only for domestic market but also catering for export market to some extent.

The localization levels achieved so far by the vending industry are over 90 per cent for motorcycles but surprisingly the price of Japanese CD70cc is Rs 66,000 as its producer continues to increase prices on rising cost of production and appreciating value of Yen against the Rupee.

However, local vendors claim that the high local content in case of motorcycles has made Pakistan, as one of the cheapest manufacturers of this mode of

M. Sabir Shaikh

Nabeel Hashmi

transport worldwide because the cost of parts produced by PAAPAM members is substantially lower than cost of imported parts.

The quality and reliability of each and every part that is localized is certified by the parent companies assembling their vehicle brands in Pakistan. With an average 35 per cent growth in the two to three wheeler sector during the last decade, there has been a mushroom g r ow t h o f v e n d o rs p r o d uc i ng components for this sector.

The motorcycle production has also touched the level of 1.7 million units in 2010-11 in which Honda bikes still hold a major market share. During 2010-11, motorcycle sales have recorded growths in excess of 25 per cent over the last year. The Chinese bike makers mainly focused on 70cc two wheelers which are invariably the Japanese version of the Honda CD70.

Some incentive in the shape of reimbursement of taxes for exports has started a trickle flow of motorcycle exports from Pakistan, but still requires more seriousness from the Ministry of Commerce to really achieve its true

www.automark.pk | August-2012 | Page 38

potential.

At the moment, Pakistan has 57 TwoThree Wheelers. Unrecorded exports of motorcycles are being done in large numbers to Afghanistan. Two-Three wheelers have also made inroads in African and South Asian Countries.

However, accurate CBU Export figures are not available.

Giving a history of Indian bike and vendor industry and their achievements, Chairman PAAPAM Syed Nabeel Hashmi said India is the Asia’s third largest economy. Indian auto market is one of the fastest growing auto markets in the world, and India is home to 40 million vehicles.

A total of 9.4 million vehicles were sold in India in FY 2010 (a growth of 27 per cent over the previous year). Motorcycles accounted for 78 per cent of the total two wheelers sold. India produced 8,418,626 two wheelers in 2009-2010 as compared to 8,026,681 units in 20082009.

He said the Indian industry, over the years, developed the capability of manufacturing all components required to manufacture vehicles, which is evident from the high levels of Indigenization achieved in the vehicle industry as well as the components developed for the completely Indian made vehicles like the Tata Indica, Tata Indigo, Mahindra Scorpio, Bajaj Pulsar, TVS Victor and TVS star. There is a dire need that production of bikes in Pakistan must cross five million units per year from the current 1.7 million units.

Over the last few years, the Indian Auto Component Industry has created a robust capacity base and all of the world’s major manufacturers have set up their manufacturing units in the country. The quality of the components

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Exclusive Article - continued from previous page

Monthly AutoMark Magazine

He said there is a higher valuation advice imposed on imports of parts and accessories. We pay customs duty as per whole weight on clearance of parts at the ports but at some dry ports collect half duty by assessing half weight. produced by the component industry in the country is certified by the fact that, out of the 498 ACMA members, 9 are Deming Prize winners, 4 are JIPM award winners and 1 is Japan Quality Medal winner.

The turnover of auto component sector has grown from a figure of $1.5 billion to $9.8 billion. Low labor costs, availability of skilled labor and high quality consciousness among Indian vendors have spurred the growth of auto component exports from India. In 201011 the overall auto parts exports touched $5 billion. Indian component industry has now reached a high degree of maturity in terms of quality and productivity and has also developed capabilities in the area of design and engineering, which are criti cal requirements for being a part of the global supply chain.

According to WTO, India’s average bound tariff rate was 48.6 percent, while its simple MFN average applied tariff for 2009 was 12.9 percent across all goods. Given this large disparity between bound and applied rates, exporters to India face tremendous uncertainty because India has considerable flexibility to change tariff rates at any time.

While India has bound all agricultural tariff lines in the WTO, over 30 percent of India’s non-agri tariffs remain unbound, i.e. there is no WTO ceiling on the rate. India maintains very high tariff peaks on a number of goods including automobiles and motorcycles (60 per cent for new products, 100 per cent for used products). Some ad valorem equivalent rates exceed 300 percent.

P A A P A M c h i e f s ai d P ak i st a n Government, MOC and FBR need to do a lot of homework and understand what its strength and weaknesses are with specific focus on engineering sector.

Pakistan is still in the process of developing standards for its products having export potential. We should e n s ure o n a r e ci p ro c al b as i s reorganization of tests and accreditation of testing laboratories with India. We are still unaware as to how many testing laboratories are accredited and

acceptable to SAARC member states.

Nabeel Hashmi said the commerce ministry is the prime government organ that is supposed to ensure that Pakistan’s industrial base does not suffer due to the proposed MFN status to India.

The commerce ministry must take cognizance of ground realities of each specific industrial sector of Pakistan and negotiate such policies which offer increased trade opportunities to Pakistani companies There is a need for initiating a detailed study on the impact of opening doors to India with a focus on Auto sector. The study must look into the TBT’s and NTB’s restricting export of Pakistani Auto products.

He said the State Bank should enhance SME assets value to Rs 400 million for Engineering Auto Industry to avail SME pr efer enti al mark up regi mes.

Clarification on FDI investments of Indian companies in Pakistan and vice versa by Pakistan Businessmen needed and reduce mark up rates and banking spread to create a more competitive environment.

Chairman Association of Pakistan Motorcycle Assemblers (APMA) Mohammad Sabir Shaikh looks highly worried over the fate of 25 year old model local assemblers of Pakistan when full-fledged trade with India will underway from January 2013.

Before further liberalizing trade with India, the government should remove the bottlenecks being faced by the Chinese bike makers. For example, he said that the makers of Honda and

www.automark.pk | August-2012 | Page 39

Suzuki bikes are enjoying concessionary duty relief of zero to 20 per cent while Chinese bike makers are forced to pay 15 to 65 per cent customs duty. The government has yet to remove the dual taxation system for the bike industry.

Currently, the officials of Sales Tax and Customs are harassing the bike makers by making cases which indicates that some officials force the assemblers to evade taxes and duties and then other officials come to grab the industry people in the name of recovery drive.

Sabir said that Customs Department PRAL takes two to three months to clear completely knocked down (CKD kits) as per list passed by the Engineering Development Board (EBD) for bike assemblers but in contrary, the CKS for makers of Honda and Suzuki are cleared in 24 hours. Is this is a fraud or contradiction, he questioned.

Motorcycle assemblers pay their sales tax returns every month through computerized network and PRAL also holds computerized record of every CKD kits imports. But assemblers are frequently asked to present their records, he said.

He said there is a higher valuation advice imposed on imports of parts and accessories. We pay customs duty as per whole weight on clearance of parts at the ports but at some dry ports collect half duty by assessing half weight.

Japanese bike makers were provided export refund for shipping bikes to Afghanistan but small assemblers, d esp ite sen ding their bikes t o Afghanistan for the last three years, are not getting export refund, APMA chief said.

APMA chief said the government has to remove these problems being faced by the small bike assemblers but it seems that some government departments are looking forward to destroy the low cost bike makers by their controversial and biased policies just to favor Japanese bike assemblers so that influx of Indian bikes could play havoc with small bike makers…

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Monthly AutoMark Magazine

Corporate Sector - Event

UK Trade, Investment hosts launch of Range Rover ‘Evoque’

UK Trade and Investment hosted the launch of the new Ranger Rover ‘Evoque’ at the British High Commission in Karachi and Islamabad.

British High Commissioner Adam Thomson joined business leaders, diplomats and members of the media as the UK-manufactured car was unveiled in the Pakistani capital for the first time.

UK Trade and Investment has worked with Sigma Motors as the sole distributor of Land Rover products in Pakistan. In 2002, they started local assembly of Land Rover Defender variants, with a total of 12 variants now being assembled in Pakistan.

Unveiling the car, the British High Commissioner to Pakistan Adam Thomson said, “Trade between the UK and Pakistan is an important, vibrant example of the strength and depth of

our bilateral relationship and Land Rover is a great example of how a prestigious British brand can create jobs back in the UK but also here in Pakistan.”

“Sigma Motors should be congratulated for enhancing the automobile sector here in Pakistan by introducing advanced UK technologies, such as the new Range Rover ‘Evoque’. Partnerships such as this will contribute towards our goal of increasing trade between our two countries every year to 2.5 billion pounds by 2015.”

Speaking at the occasion, Sigma Motors CEO Col (r) Syed Zafar Uddin Ahmad said, “The all new Range Rover ‘Evoque’ is one of the most exciting vehicles in a generation. Bold and sophisticated in design, it offers clever technology that is innovative, relevant and intuitive to use. Range Rover ‘Evoque’ is a quantum

leap in the evolution of Range Rover and we are very excited to bring it to Pakistan.”

“Given the fact that sustainable economy is possible only by establishment of large and medium industries, Sigma Motors takes pride in making a humble contribution of creating direct or indirect job opportunities for approximately 1,000 families in Pakistan. Besides ensuring self-reliance in 4x4 vehicles, Sigma Motors had the invaluable opportunity of acquiring advanced technologies and bringing itself up to exacting international manufacturing standards. We take pride in being the only one to successfully assemble vehicles based on European technology and introduce the same in the automobile sector in Pakistan.”..

www.automark.pk | August-2012 | Page 40

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Car / Light Vehicle Price List

SUZUKI Model Model

MEHRAN VX 800cc Euro II MEHRAN VXR 800cc Euro II SUZUKI SWIFT 1.3L DX SUZUKI SWIFT 1.3L DLX SUZUKI SWIFT 1.3L Automatic CULTUS Efi VXRI Euro II CULTUS Efi VXRI (CNG) LIANA 1.3L RXI MT PETROL LIANA 1.3L RXI MT (CNG) RAVI PICKUP VX Euro II RAVI PICKUP ST308R VX CNG BOLAN VAN VX Petrol Euro II SUZUKI VAN CARGO Euro II APV 1.5L JL SX MT (CBU) APV 1.5L JL DX MT (CBU) JIMNY JLX SX CBU (SN) JIMNY JLX DX CBU (SN)

HONDA Price Price Rs. 555,000 Rs. 607,000 Rs. 1,096,000 Rs. 1,176,000 Rs. 1,311,000 Rs. 965,000 Rs. 1,015,000 Rs. 1,332,000 Rs. 1,411,000 Rs. 582,000 Rs. 621,000 Rs. 634,000 Rs. 610,000 Rs. 1,999,000 Rs. 2,074,000 Rs. 1,974,000 Rs. 2,123,000

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

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

Honda Honda Honda Honda Honda Honda Honda Honda

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

Price Rs. 7,117,000 Rs. 6,617,000 Rs. 1,497,000 Rs. 1,638,000 Rs. 1,851,000 Rs. 2,043,000 Rs. 1,971,000 Rs. 2,121,000

TOYOTA COROLLA Model Model XLI VVT-i 1.3 M/T 1299cc Petrol GLI VVT-i 1.3 M/T 1299cc Petrol GLI VVT-i 1.6 A/T 1599cc Petrol XLI VVT-i 1299cc ECOTEC GLI VVT-i 1299cc ECOTEC 2.OD STD 2000cc 2.OD SALOON MT 2.OD SALOON SUNROOF ALTIS 1.6L Dual VVT-i MT ALTIS 1.6L Dual VVT-i MT SUNROOF ALTIS 1.6L Dual VVT-i AT Cruisetronic ALTIS 1.6L Dual VVT-i AT SUNROOF Toyota Avanza (Standard)

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

Toyota Avanza (Up Specfication)

Rs. 2,160,000

Price Price 1,537,500 1,672,500 1,827,500 1,602,500 1,732,500 1,607,500 1,809,000 1,914,000 1,902,500 1,997,500 1,997,500 2,087,500 1,960,000

Hilux Pickup 4x sc Model

Price

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

Rs. 1,763,500

Hilux Pickup 4x4 D/C Model

Price

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

DAIHATSU

Price TOYOTA VIGO Model

Rs. 2,878,500

LAND ROVER Price

Model

Vigo Champ M/T Rs. 3,178,500 DEFENDER (WHITE ,BLACK,STRONG BLUE & SILVER )

STATION WAGON 90 Rs. 3,560,000

STATION WAGON 110 Rs. 4,260,000 Vigo Champ A/T Rs. 3,378,500 (WHITE ,BLACK,STRONG BLUE & SILVER )

Soft Top 90

(N/A)

Price updated Aug- 2012

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Indian Automotive Industry - Briefs

Monthly AutoMark Magazine

Maruti Suzuki Cervo, Alto 800 and Tata Nano Diesel to delight the car buyers in India The small car segment of the Indian automobile market is one of the fastest growing and the ultra competitive.

However Tata Nano, which was first launched back in March 2009, shattered the competition and took the market by its stride plainly due to its minuscule price tag. This was bound to bring creases on the forehead of country's largest car manufacturer, Maruti Suzuki India Limited (MSIL) and it did the expected. In order to pitch a new car against the Tata’s iconic model, the company is gearing up to launch a small car Cervo and a new edition of Alto 800 to ward off the competition.

It is speculated that the new Maruti Suzuki Cervo, which is already on sale in Japan, will replace Maruti 800 in the Indian auto market. To deliver a stiff competition to the 2012 edition of Tata Nano, it is anticipated that the MSIL will offer its new car in the price range of Rs. 1.5 to 2 lacs. However, the car maker will do away with some of the features, which are packed within its Japanese model to cut-off the price of their new car. The upcoming model will

Mahindra 2 Wheeler opens the doors of its cutting-edge R&D facility at Pune Mahindra Group's two-wheeler division inaugurated its recently installed Research & Development (R&D) centre in Pune, Maharashtra. Vice-Chairman and Managing Director, Mahindra Group, Anand Mahindra cut the ribbon of this third largest facility of its kind in the country. The new R&D centre of the comp any i s recognised by the Department of Science and Industrial Research (DSIR). From its new unit, the manufacturer has come in a position from where it can design and develop new powertrains for its two-wheelers, within the company itself. The new centre is a perfect example of company's attempt to use advanced technology blended with innovation to emerge as one of the dominating player in the ultra competitive two-wheeler market of India.

be a 5-door hatchback, offering a roomy cabin to the passengers.

Analysts believe that the 2012 edition of Cervo will hold a 0.7 litre petrol powertrain, which will hav e a displacement of 660 cc. The maximum power churned out by this performance oriented engine will stand at 60 bhp, which will be fairly impressive for a small car. It is also expected that along with a snappy performance, the car will deliver an unmatched mileage....

On the other hand, the yet-to-be launched new generation Alto 800 will act as a stop-gap model for the car maker, considering the price hike of petrol. The company has planned to offer its new car in dual fuel mode of LPG and petrol. It is believed that the new car, which is also touted to be the replacement for the legendary Maruti 800, will be powered by 3-cylinder 800 cc fuel infused petrol engine. Maruti Suzuki is supposedly working on incorporating latest technologies in the powertrain, which will help it to deliver best-in-class mileage, and thus will be more expensive than the outgoing Alto.

Yamaha India Plans $500 Motorcycle The Indian unit of Yamaha Motor Co. plans to launch a motorcycle that costs $500 in 2016, a senior executive said.

"For the next two-three years, we will only concentrate on growing the scooter segment and will look at a commuterlevel motorcycle in 2016," India Yamaha Motor Pvt. Ltd. Chief Executive Hiroyuki Suzuki said at a press conference.

The Indian unit currently doesn't sell scooters. But at the press conference it unveiled a scooter prototype, called Ray, which it plans to start selling later this year.

Mr. Suzuki said the company is studying the Indian market to see if there is a possibility to launch a motorcycle with an engine capacity of 250 cubic centimeters.

While MSIL has been working towards wedging the competition posed by Nano, Tata Motors too has not been sitting idle. Earlier, the car maker launched its 2012 Tata Nano with upgraded power and mileage specification. Despite making a good entry and creating a buzz in the market back in 2009, Nano witnessed a dip in sales owing to the technical faults, which were being reported in the vehicle. However, being the brain child of Chairman, Tata Motors, Ratan Tata himself, the car never faced a roadblock and the company has been consistently working on it to make it one of its bestseller. Now the speculations reveal that the company may launch a diesel version of Nano by the end of this year, keeping it in-line with the market trends.

The Indian auto market runs on the price factor, and thus the imminent launch of the Maruti Suzuki Cervo, allnew Alto 800 and the new generation Tata Nano diesel, the customers will be rejoiced with the ample choice in the small car segment......

Tata Motors Sales Increase 15 Percent In July 2012 Tata Motors today reported a 15 percent increase in total sales at 74,159 units in July this year. The company's domestic sales of commercial and passenger vehicles for the month grew by 18 percent to 68,627 units against 57,990 units in July last year, according to a PTI report.

Tata Motors commercial vehicle sales in the domestic market stood at 42,387 units in July 2012 compared to 40,798 units sold in July last year, up four percen t, quot ing the co mp any statement, the report said. Light commercial vehicle sales were at 29,601 units, a growth of 19% from 24,962 units sold in July last year, it added.

Medium and heavy vehicle sales stood at 12,786 units, down 19 percent from 15,836 units. Passenger vehicles sales were higher by 53 percent to 26,240 units against 17,192 units sold in the same month last year....

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China Automotive Industry - Briefs

Monthly AutoMark Magazine

Chinese automakers expand global reach Some Chinese auto brands have witnessed rapid global market expansion during the first half of this year, despite a weak global economy and sluggish domestic sales.

During an ongoing auto expo in the city of Changchun in northeast China's Jilin Province, Huang Haitao, deputy general manager of sales at the Geely Group, a major Chinese automaker, said the company is ready to expand its European market.

Huang said Geely's exports during the first half were double those of the same period last year, adding that the company exported more than 6,500 cars in May and over 10,000 units in June.

Statistics released by the China Association of Automobile Manufacturers showed that China exported 487,900 cars during the first half, up by 28 percent year on- year.

In the Russian market, the Chongqingbased LIFAN Group sold 4,545 cars during the first quarter, up by 69 percent from the same period last year; Chery

FAW launches production of Hongqi H7 luxury car China FAW Group Corp. has launched production of the Hongqi H7 luxury sedan, a vehicle initially designed for China's government fleets, Gasgoo.com reported, citing the Web site xkb.com.cn.

FAW has invested 520 million yuan ($82 million) to develop the Hongqi model lineup.

Company Chairman Xu Jianyi said the vehicle also will be sold to the public, competing with foreign brands such as Audi, Mercedes and BMW. Earlier this year, China's government announced that government agencies no longer could purchase foreign cars for fleet use.

The move is a blow to Audi, the brand most favored by government officials.

And it created an opportunity for domestic automakers such as FAW, which revived its once-dormant Honqi brand.

State-owned FAW, which is based in Changchun, China, maintains joint ventures with Volkswagen AG, Toyota Motor Corp. and General Motors.

Automobile's exports during the period were 2.5 times that of last year and Geely's exports were 3.65 times, according to the Association of European Business.

Xing Wenlin, vice president of Great Wall Motor (GWM), said his company has been exporting cars to multiple countries, including Russia, Australia Italy, and Chile.

GWM's exports to Russia hit 20,000 units last year, about 25 percent of the company's total exports. The company exported 9,000 units to Russia during the first five months of the year, a growth of 32 percent year on year.

Russia has long been an important part of GWM's overseas strategy. GWM's assembly plant in Russia was put into operation in 2006, making the company the first Chinese auto brand to set up a plant in the country.

The company opened an assembly plant in Bulgaria in February and it aims to further expand its European market with the help of the plant.

Domestic cars getting smarter in China "Intelligent automobile technologies have always been in use. They make operation of a car easier and driving safer. In the past five years, the trend of intelligent automobile has been speeding up rapidly. Now, more than 90 percent of innovations in the auto industry are related to car intelligence system.

Intelligent car is becoming the focal point of R&D in the auto industry.

According to a study, Chinese car consumers' needs, understanding, and expectation of cars are changing, a major manifestation being smarter cars. Long ago, a car was the privilege of the rich, symbolizing the status of the individual or the family. Now, more and more people consider a car nothing more than a transportation tool, an information platform, and an entertainment platform. Particularly for the generation born after 1980 who grew up with the internet, the feeling is much stronger.

"Some people may buy a car with 2.4L displacement, but 2.4L is only useful in certain environment. Most of the time, 1.8L would be enough, and 1.4 would suffice when going down a slope.

Despite a growing share in the global market, Chinese automakers still face grave challenges in going global, experts warned.

Many industrial insiders said at the auto show that the appreciation of China's currency and the rising cost of labor and materials have dulled the competitive edge of Chinese auto brands.

Additionally, Chinese companies are plagued by a lack of a clear overseas development strategy, an advanced operational philosophy and the ability to conduct significant research and development.

Sun Zhiming, head of the economic institute under the Jilin Academy of Social Sciences, said Chinese companies are in an urgent need of industrial upgrading and higher quality service.

"We will better serve foreign customers' needs and expand our presence in the global market by improving our service quality," Huang said.

Ford likely to build heavy-duty trucks in China, Chinese partner says Jiangling Motors Corp., a light commercial truckmaker partly owned

by Ford Motor Co., says it likely will build Ford's heavy-duty trucks at a Chinese company it plans to acquire.

Jiangling Motors said this week that it will acquire truckmaker Taiyuan Changan Heavy-Duty Vehicle Co. for 270 million yuan ($43 million).

"Taiyuan Changan Heavy-Duty Vehicle will likely introduce Ford Motor Co.'s technology and products in the future," Jiangling Motors said in a statement.

The company provided no more details about its plan to build Ford trucks.

Taiyuan Changan Heavy-Duty Vehicle, of the north China city of Taiyuan, can produce as many as 50,000 heavy-duty trucks a year, according to its corporate Web site.

Taiyuan Changan Heavy-Duty Vehicle is owned by China Changan Automobile Group Co., a state-owned Chinese company.

Ford makes no heavy trucks in China.

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August-2012

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Exclusive Review by Shahzad Tabish

Monthly AutoMark Magazine

SEM Asia 2012

A hat-trick of Dismal Performances Automark magazine has always supported the cause of the students who seek media attention.

Many articles from individual teams as well as comprehensive reports have been published before mentioning in detail the claims by various individual teams across Pakistan.

It’s not that I am being ridiculous at the underachievement & not appreciating them for trying really hard, but it has now become a mere fact that every time participants from our country holding the flag of so called national honor participating in the event have produced nothing but a consistent dreary performances.

This year again a huge tally of teams emerging from engineering universities all over Pakistan registered for the event claiming to be the best in their respective categories of research & development, promising to achieve the objectives which their senior participants couldn’t, but in fact; they achieved exactly what their senior mates had achieved earlier on, i.e. “Failure” to be very honest.

When we talk about mere “Success”, it is a word that pronounces win or being victorious in any form of presented task, however my ideas differ a bit. To me, winning is basically an attitude, an i d e ol o gy t ha t p ro no u n ces t he achievement of your intention honestly & reliably. Well, what I actually want to convey here is a fact that honesty is the best policy & being Muslims we are pretty much aware of that fact. Relating this fact the participant teams from the very beginning of the SEM trend have been dishonest about their claims. They claim a mileage figure that sounds terrific, but in the end the results pronounce actual mileage that has to be termed pretty horrific. Why is this trend so common amongst the participating teams? I am absolutely unsure.

When you ask the so called team members the answers they give are all based on blame games. These blames majorly include the behavior of customs,

the logistic damages, unavailability of equipment etc. This whining & complaining continues until the sponsors & media have their mouth shut.

I pay all my due respect to all the teams that participated three years ago for the first time in SEM Asia. For them it was an unknown terrain which they explored & paved a way for the junior’s to follow.

Their un success at the mega event was inevitable as they had absolutely no experience of designing, manufacturing, testing, transporting & participating in the event itself whatsoever, but someone had to do it the first time around & they did it.

After that first participation attempt, what we Pakistanis have achieved in the event is a tally of “consistent dismal performances”. Yes, consistency is required but not in this form for sure for any nation which is proud of its young emerging engineers who take pride by claiming so much far before their participation in the event.

Targeting the performance figures of this year’s event, a total of 19 teams from Pakistani Universities had registered for the event amongst which a few couldn’t even make it to the event due to unknown reasons. For the remaining who arrived in Malaysia only 5 were able

to register official results with none providing substantial achievement in their respective category.

Automark magazine has always supported the cause of the students who seek media attention. Many articles from i n d i v i d ua l t e a m s a s w e l l a s comprehensive reports have been published before mentioning in detail the claims by various individual teams across Pakistan. After the completion of this year’s competition we again had a chit chat with few of the participants.

A cc o r d i n g t o S a ad S al e e m a representative of Team N5 from NED University “The team did well by clearing the initial technical inspection & registering a result in the ethanol category of 106 km/l. This result placed them at 4th spot on the category”. Here we shouldn’t forget that the team which won this category registered a staggering 2903 km/l mileage. Amazing; isn’t it?

The four teams which registered a result in this category saw our team registering the least mileage by far.

Talking to Saud Sahni from team Victory of NED University we heard “sadly on our run to chequered flaq our dc motor failed so we couldn’t register an official result, however in accordance to our estimations we were close to clinching 2nd place had we finished”. So here is another story of misery amongst many others which we have heard before frequently.

Reading through the comments from another team on a facebook page I was very astonished as they were very happy after registering a result of only 50km/l of gasoline & placed 11th in their category as in accordance to them it was a big achievement that they had finally

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Monthly AutoMark Magazine

Exclusive Review - continued

registered an official result after an elapse of 3 years of continuo’s participation. Well this reminds me of their claim (for sure before leaving for the competition) of having superb economy of 200km/l of gasoline which they were absolutely sure of achieving in the event, Amazing.

These are somewhat desperate times whi ch n eed t o hav e desp erat e countermeasures in order to attain substantial success in the upcoming years, otherwise the same story shall continue even further. First of all it is the responsibility of the universities which send their representatives to participate in such events to take the stand. An advisory panel consisting of professors should be selected to continuously monitor & guide the students every year on a consistent basis.

This panel should comprise of students which have previously participated in the event as well. Secondly a nationwide data sharing program should be setup so that the minor or major innovations for the improvement of performance of cars can be shared between the huge amounts of participants every year.

Thirdly a very fair & realist ic methodology should be adopted for the selection of the teams from each

university. The selection committee should not only consider the facts mentioned by individual teams about their intentions but should consider the evidences & resources that prove their claims valid & make their claim implementable in the long run respectively.

Every participant student is found complaining of the fact that the sponsors do not pour in the financial aid that they have been looking forward to, I absolutely cannot understand this complain on the behalf of the participating students as it is their lackluster performances that have flee the corporate sector from investing.

Anyhow, this financial problem reported by the students need to be resolved as well. It’s about time that few of the corporate giants should dedicate a specific amount of their financial grant from their annual budget of SCR funds for SEM activity. They just need to keep an eye on the activity of each & every individual team & push them to achieve their proposed objectives.

Media has nowadays become a source of creating hype for each & every small detail that is on offer. The fact yet remains that not all the people belonging to media are technically sound enough

to validate or even question the claims by the students, what they actually do is to print what-so-ever they are told about, a fair example of this issue is the recent lame claim of water propelled vehicle which saw great media attention.

It is the responsibility of media as well, we should promise our youth that they would get all the media attention, awards & rewards once they have accomplished their allege for real as an official result.

Concluding once again I would like to state that sincerity & truthfulness are the ethical parameters that have to be addressed first. The students who give their very best for creating a fuel efficient vehicle should base their claims on reliable & realistic figures & should not exaggerate the performance statistics. I would like to state best of luck & heartiest wishes of success for all the future participants of SEM from our country in the near future. Cheers

www.automark.pk | August 2012 | Page 46

Exclusive review on SEM Asia-2012, written for Monthly AutoMark Magazine

by Shahzad Tabish, s t u de nt of N ED university of Karachi

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SEM Asia 2012

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MADE MADEIN INPAKISTAN PAKISTANMOTORCYCLES MOTORCYCLES PRICE LIST LIST RETAIL PRICE

70cc Motorcycle

Sr./ No. 1.

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

Retail Price Rs. 42,500/= Rs. 42,500/= Rs. 42,000/= Rs. 42,000/= Rs. 41,000/= Rs. 42,500/= Rs. 49,000/= Rs. 41,500/= Rs. 45,000/= Rs. 42,500/= Rs. 46,000/= Rs. 47,000/= Rs. 42,500/= Rs. 67,500/= Rs. 43,000/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 44,800/= Rs. 41,500/=

Sr./ No. 23.

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

Price updated July-2012 www.automark.pk | August-2012 | Page 48

Retail Price Rs. 42,500/= Rs. 42,000/= Rs. 47,700/= Rs. 46,200/= Rs. 42,500/= Rs. 42,000/= Rs. 42,500/= Rs. 42,000/= Rs. 40,000/= Rs. 45,50/= Rs. 43,000/= Rs. 44,500/= Rs. 42,400/= Rs. 43,000/= Rs. 42,500/= Rs. 42,500/= Rs. 45,000/= Rs. 42,500/= Rs. 40,000/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/=

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MADE IN PAKISTAN MOTORCYCLES PRICE LIST

125cc Motorcycle No. 1.

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

Retail Price Rs. 88,000/= Rs. 55,000/= Rs. 54,000/= Rs. 59,000/= Rs. 75,000/= Rs. 96,500/= Rs. 116,500/= Rs. 77,000/= Rs. 96,000/=

DYL Motorcycles Sr./ No. 1.

2.

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Product & Model Name YD100 Yama4 Janoon 100cc

Retail Price Rs. 77,600/= Rs. 73,700/=

100cc Motorcycle No. 1.

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

Retail Price Rs. 55,500/= Rs. 55,000/= Rs. 80,500/= Rs. 55,000/= Rs. 55,000/= Rs. 55,000/= Rs. 60,000/=

Suzuki Motorcycle Sr./ No. 1.

2.

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

www.automark.pk | August-2012 | Page 49

Retail Price Rs. 72,900/= Rs. 76,400/= Rs. 95,500/= Rs. 85,500/=

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