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Pakistan’s premier magazine on automotive, engineering & energy sector Monthly
AUTOMARK The China opportunity
Editor M. Hanif Memon
Pakistan and China have perhaps the most axiomatic of relationships between Dr. Raja Irfan Sabir any two sovereign states in the world today. It is a relationship that matured fairly early in its lifetime, and has since Technical Editor resolutely withstood the test of time. Muhammad Shahzad Notwithstanding the fact that Pakistan Haider Nawab is ideally situated in geopolitical terms Advisor Planning & Advertising Manager to serve China’s strategic interests in Development Abdul Khaliq the region and provide it access to the Toyota Southern Motors Toyota Defence Motors warm waters of the Arabian Sea as Karachi Circulation Manager an alt ern at ive t rade rou te, t he Tahir Siddiqui relationship also offers tremendous Muhammad Yousuf Shaikh Founder & Chairman ammunition for Pakistan’s economic Pakistan China Motorcycle development. Industry Council Computer Operator Karachi MurtazaHanif As a matter of record, the relationship has made considerable progress since Abdul Majeed Sheikh President, the time of the establishment of Web Master AOTS-ABK Dosokai, diplomatic relations between the two Mustafa Hanif Karachi Regional Center countries in 1950, followed by a multiDirector Industrial Lesion, dimen s io na l mi lit ar y a ss is t an ce NED University, Karachi programme post the 1965 war with India, CONTRIBUTING IN and the signing of a strategic alliance in THIS ISSUE Engr. IHT Farooqui 1972 following the debacle of East Muhammad Shahzad General Manager Plant M. Yousuf Shaikh Pakistan. Economic cooperation between Karakoram Motors (Pvt) Ltd., Nadine Gangadeen Karachi the two countries began in earnest in Asif Masood 1979. J. Pereira Du ring 2 01 0 , C hin ese ov ers eas Senior General Manaer investments amounted to $68 billion. In After Sales Service and Parts Master Motor Corporation Ltd., geographical terms, Asia remained the Karachi main beneficiary, attracting two-thirds of all investments, 75% of which went toHong Kong. Singapore and Myanmar were the other two countries that shared The views expressed by contributing most of the remaining balance. Latin writers and comments do not America attracted nearly 15% of the necessarily reflect the views and total investment in 2010 andEurope10%. Investment in America of $1.3 billion policies of the Monthly AutoMark was under one percent of total worldwide magazine's management. investment. In terms of sector-wise investments worldwide, 45% went into AutoMark REGD: SC-1330 leasing and business services and a Published every month by M. Hanif Memon similar amount was shared by five other Postal Address sectors, namely financial services, Active Communications manufacturing, mining, transportation D-68, Block-9, Clifton,Karachi Visit us: www.automark.pk and wholesale and retail trade. Sub Editor
Advisors Imtiaz Rastgar CEO, Rastgar Group & CBI External Expert, Ex-chairman EDB Islamabad
E-mail: magazine@automark.pk automarkpk@gmail.com Tel : 021-32218526 Mobile: 0321-2203815
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CONTENTS
Monthly AutoMark PCMIC has an emerging investment opportunity in public private partnership to set-up an inventive R&D production Facility for Pakistan Exclusive Article by M. Yousuf Shaikh, Founder & Chairman, PCMIC
11-13
Motorcycle Production Figures for year 2011-2012
14
Joint Venture Offer by Global Auto Sourcing Co., (PK) by M. Yousuf Shaikh
15
Islam Engineering received Achievement 17-18 award from the President of Pakistan Exclusive Interview Safety Tips for the Drivers Exclusive Article by Nadine Gangadeen
19
What is pushing up Gas Tariff Exclusive Article by Asif Masood
20
RUST… A Bitter Enemy! 22-23 Your Car’s Skin Cancer Exclusive article by Mohammad Shahzad Bike assemblers await duty cuts in new trade policy - News Update
24
International Automotive News - update
25
Local Assembled/Imported car price
26
The role of Automobile industry in the economy of Pakistan its growth. Its impacts negative as well as positive. Automotive - Research Report
31-45
CIMAMotor-2012, Exhibition Review
40-41 Suzuki Finance-Meezan Bank residual value 42 Automechanika 2012, Frankfurt - Report 46-47 Current Motorcycle price list 48-49 visit: www.automark.pk
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Exclusive Article by M. Yousuf Shaikh
Monthly AutoMark Magazine
PCMIC has an emerging investment opportunity in public private partnership to set-up an inventive Research & Development production Facility for Pakistan to design & manufacture Pakistan’s own motorcycle & engines. China’s giant Motorcycle Manufacturers Invest in Upstream motorcycle & car Parts Industry to Reduce Costs. By Muhammad Yousuf Shaikh Introduction:As a pioneer of the Chinese Motorcycle trade & industry businesses in Pakistan, I was the first one to introduce economical high qu a l i t y C hi n e se motorcycle by top Chinese motorcycle manufacturer to Pakistan in 2002. I trained many Chinese motorcycle manufacturing companies in China to design the 70cc and 125cc motorcycle for the Pakistan market. In a short time, there were several motorcycle importers cum assemblers establishing the Chinese motorcycle assembling plants in Pakistan due to availability of suitable CKD parts by Chinese suppliers. As few years ago motorcycle assembling cum manufacturing was the dream of private ventures. But after the availability of good quality right parts in China and in Pakistan with the help of Allah Rabbulizzat this dream has come true. My experience includes senior roles in product development, marketing and business management. I am the Founder and Chairman of Pakistan China Motorcycle Industry Council, a Pakistan & China Motorcycle trader & Industrial group network for Pakistanis, Chinese and their friends. I also am serving as Chairman of the Global Group. In addition to being a Pakistan & China motorcycle trade & industry watcher, an investor, bu si ness consultant and avid follower of the Chinese Motorcycle Trade & Industry markets, I have more than 20 years
experience in the Motorcycle trade & industry. Being a Founder & Chairman PCMIC, I am working on to setting-up an inventive research & development facility for Pakistan to Design & M anufa cture Pakistan’s own motorcycles and engines in public private partnership. My years of experience in motorcycle trade & industry flourishing development and launching of several new motorcycles in Pakistan, the Pakistan China Motorcycle Industry Council and their associates are committed to supporting entrepreneurs to develop emerging technologies that become the driving industries of the future. These efforts are supposed to facilitate the creation of numerous companies and thousands of jobs in Pakistan. I am looking for an opportunity to set-up a facility for a Pakistan motorcycle industry. I come with extensive experience of setting-up facility for Pakistan companies on a global sourcing motorcycles and engine manufacturing in Pakistan. I am familiar with all top Chinese motorcycle manufacturers & all aspects of, international sales & Purchase,
establishing new channels, selection of right design vehicles for specific markets, dealing with import/export regulations, developing new models, discovering real manufacturers as well as presenting at trade shows. It is with great optimism and interest that I take notice to promote the Pakistan Motorcycle industrial sector in China and to invite global Chinese manufacturers to established joint ventures in Pakistan. I believe there are several areas in which I could help Pakistan to strengthen Pakistani motorcycle Industry and Also help to export the made in Pakistan motorcycle in the international market. Joint Working Group for Manufacturing of Motorcycle Engine & Engines parts concrete Development in the Motorcycle Industry of Pakistan.
Follow Up of Meeting with Director General MVRDE into localization of motorcycle engines: The latest expansion & development of MVRDE into localization of motorcycle engines, interests me to offer my proficiency as Chairman PCMIC for Pakistan as I feel my experience could make an enormous difference in Pakistan Motorcycle Industry, and thus ensure the success of this expansion. The PCMIC proposed plans on setting up an inventive research & development facility and centre of excellence in motorcycles and small engines at Sunder Industrial Estate Lahore to ensures that the council is able to provide a comprehensive development capability in these important and interlinked
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Exclusive Article by M. Yousuf Shaikh - continued market sectors. Engineers at the centre should be able to deliver projects up to and including full turn-key motorcycle and small engine programmed drawing and technology from across the China. I am delighted to propose to Pakistan’s Chinese motorcycle assemblers to avail themselves of solid investment opportunities in Pakistan’s Motorcycle industrial sector. As we already take initiative on the possibility of Chinese manufacturers to exploring the Pakistan Motorcycle industry and taking forward the long term strategic agenda laid out in the PCMIC reports that Pakistan must raise its game to compete for Chinese venture in automotive R&D and true manufacturing. To do that, the Pakistan’s Chinese Motorcycle assemblers need an ever more strategic, collaborative relationship with the Government and to be working for the R&D and true manufacturing and other stakeholders to achieve long term goals. I want the Council to help make that happen. The Pakistan China Motorcycle Industry Council will be an opportunity for the industry and Services Cluster Group to work together on the long term strategic development of the sector. The probable project has been carried o ut b y C hi n a b as e d C h i n e s e Manufactures and Pakistan’s Chinese Motorcycle Assemblers through PCMIC in cooperation with MVRDE, Local parts Vendors and financial institutes. The project is expected to be co-financed by all stake holders and the government of Pakistan. If this happens, it will be in the interests of all if government arranges interest free loans & allow tax holiday for five years to this project. To design the cleanest possible engine within reasonable cost and performance constraints we will require a “Team Approach” and intensive investment & huge financial resources. The enabling en v i r on me n t p r o v i d ed b y t h e Government should be instrumental for the phenomenal growth of this sector. Motorcycle and small engine projects are frequently characterized by application-specific requirements. Volumes of production in particular can vary widely from niche applications, through to hand-held tool applications for which the quantities produced can often vastly exceed those of mainstream automotive products. Despite these differences, motorcycle and small engine
projects tend to share many of the stringent design targets of larger power u n i t s suc h as o p t i mi z e d f uel consumption, regulated emissions, quality and, of course, lifetime cost. Pakistan’s already extensive capability in motorcycle production & marketing which should further enhanced with the commissioning of motorcycle research & development facility. Underscoring the PCMIC’s commitment to the growing two-wheeler sector – from luxury Chinese & Pakistani brands to the value-driven products popular in Asia – PCMIC is pleased to assist to establish the whole project business scope involving projects of manufacturing, assembly and processing of motorcycles body parts and engines manufacturing.
Project Categories & process • Localization of parts (engine parts) through “Transfer of Technology”, “Locally Available Technology” and “ R e s o ur c i n g / S e c o n d S o ur c e / ” “Backward Integration” i.e. forgings, casting, and materials..
• Localization of hi-tech. motorcycle engine components through inhouse projects for production of • Transmission Gears & Shafts, • Crankshaft, • Crankcases & Covers, • Cylinder Head, • Drum Machining, • Cam Shaft, • Clutch assembly, • Small parts, bushes & bearings • ACG Magneto Assembly, • Ignition Coil.
• Establishment of the state of the art “Casting Module/Division” including production
Monthly AutoMark Magazine facilities of • LPDC (Cylinder Head), •HPDC (Crankcase and Covers) • GDC (Case Bottom of Shock Absorbers) • Heat-Treatment. • Production of Case Damper (Shock Absorber) through special purpose welding equipment. • Engine Plant expansion through addition of CNC Flexible Machining Facilities, HT and Test Equipments. • Vendor evaluation/rating, selection and development for SCM on QCDM basis. PCMIC experts prepare expansion plan for Engine Assembly Plant with in-built Quality Assurance system with the Longest Conveyorized Motorcycle Assembly Facilities integrated with “Quality Gates” and Test Equipments to meet ever increasing market requirements. Also exclusively negotiated and conclud ed Technology Transfer Agreements with Chinese manufacturer by PC MIC fo r lo cal i za t io n o f components through establishment of in-house and vendors’ facilities. Developed parts of 70CC,125CC & 200CC to ensure to manufacture the motorcycle engines including backward integration for Forgings & Castings and alloy steels materials through PSM facilities. Pr ep a rat i o n o f T ec hn i cal an d Commercial F easibi li ty f or the production of core technology of motorcycles’ engine and frame components e.g. Cylinder Head, Crankshaft, Crankcase & Covers, Cam Shaft, Gears, Heat-Treatment, State-ofthe-art Casting Modules (HPDC, LPDC & GDC), Robotic Welding, Plating, Painting, ED-Coating Systems and Synchronized Assembly (Engine & Frame) Plants with in-built QA Systems can be arranged to joint working group on cost basis along with project supervision by PCMIC expert s.
China’s giant Motorcycle Manufacturers Invest in Upstream motorcycle & car Parts Industry to Reduce Costs. Lifan Industry (Group) Co., Ltd released a notice saying it took a stake and invested RMB 18 million in Chongqing Dihan Power Machinery Co., Ltd. The writer learned from Lifan that this was Lifan's first time to invest and hold share
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Exclusive Article by M. Yousuf Shaikh in an upstream auto parts enterprise. Dihan Power will supply car parts for Lifan. The other Chongqing car and motorcycle manufacturers including Zongshen also released their respective investment plans in the upstream industry in succession. It has become an industrial trend for auto and motorcycle enterprises to invest and hold shares in the upstream auto parts industry.
Current Situation Lifan & Zongshen Launches Upstream Industry Investment Plans "This is Lifan's first time to invest and hold shares in an upstream auto parts enterprise." Lifan Group's Executive Vice President Mr. Guan Fengjin expressed recently that Dihan Power, which is jointly set up by Lifan with RMB 18 million and another Chongqing auto parts enterprise, would mostly engage in the R & D and production of key parts of car engine. "The power performance of Lifan car will be entirely upgraded." Mr. Guan Jinfeng said that investing in a new engine parts plant wasn't Lifan's only act, Lifan would carry out a series of acts in the future in the auto power industry. Mr. Guan revealed that Lifan was in talks with a transmission box producer recently. Lifan will increase its discursive power in the upstream auto parts industry by investing to set up joint venture or hold shares. The Lifan was not alone in investing in upstream auto parts companies, Zongshen was also doing the same. Mr. Li Jianping, the Secretary of the Board of Directors of Zongshen, expressed that Zongshen would hold shares in some upstream motorcycle parts companies by investing to set up joint ventures or hold shares, and planned to purchase 4 to 6 parts enterprises in 3 years. Mr. Li stated that Zongshen released corporate bond of over RMB 700 million last year with the purpose of gathering fund to invest and hold shares in the upstream auto parts industry. "I am going to Beijing today to discuss about issuing additional stocks." Mr. Li added that Zongshen would allocate some capital for the upstream auto parts industry after issuing additional stocks. The reporter learned that Zongshen didn't only invest in upstream auto parts companies but also in the raw materials suppliers for
auto parts producers.
Reasons Integrating Resources to Reduce Costs A lot of money is needed to own shares of upstream auto parts companies, and why are manufacturers willing to pay to hold shares? The writer learned that such acts of car and motorcycle enterprises have to do with the gloomy car and motorcycle market performance last year. Zongshen's 2011 financial situation forecast showed that its sales revenue had an increase of 20%, but its profits were the same as a year ago. "We have clearly felt the pressure brought about by the rising raw material prices, so we need to purchase upstream parts enterprises and carry out costs control." Mr. Li added that the rising raw material prices have brought along great cost pressure for the company since 2010, meanwhile, the shrinking motorcycle market triggered fiercer competition in the industry. Whoever gains control of the upstream auto parts industry will have better price advantages and core competitiveness. Mr. Li said that holding shares of upstream auto parts companies will help reduce trade costs greatly. These parts factories can also receive big orders from Zongshen. This will help the company to achieve large scale effects and reduce production costs. After holding their shares, Zongshen will reform their management process and techniques to improve their efficiency, and also help reduce parts of their costs. In Mr. Guan Fengjin's eyes, gaining shares in the upstream auto parts industry to control costs is one of the reasons. "Our major purpose is to master core auto technologies by owning shares in the upstream auto parts industry." Mr. Guan Fengjin expressed that car's core technologies were used on its parts, only by investing and holding shares in the auto parts industry can Zongshen truly master core technologies, and
Monthly AutoMark Magazine further improve the quality of its car products. Chang'an Auto's spokesperson added that Chang'an Auto belongs to China Chang'an which has many parts subsidiaries to provide car parts at lower prices for Chang'an Auto. These advantages help reduce costs, so Chang'an cars have price advantages. So Chang'an Auto can put more efforts into the development of new products and brand improvement.
Influence Help Improve the Competitiveness of Auto & Motorcycle Industry. Mr. Chen Siwei, the Deputy Chief of Chongqing Municipal Commission of Economy & Information Technology Automobile Department, expressed that the share holding of upstream auto parts industry is a major way for Chongqing auto and motorcycle manufacturers to upgrade and this will greatly improve their competitiveness. Mr. Chen Siwei holds that the fact that the manufacturer who extends its reach to the upstream and downstream industries are good for improving its profitability, market competitiveness and anti-risk capacity. After gaining the shares of upstream auto parts industry, auto and motorcycle manufacturers can gain access to intellectual property rights. Integrating the industrial chain is good for the auto industry upgrade of Chongqing. Mr. Chen Siwei stated that core technologies of car and motorcycle were seen in their parts, Chongqing auto and motorcycle parts manufacturers faced problems like small in scale, hard to raise capital, and inferior in product R & D. If vehicle manufacturers can purchase so me of t hese p arts manufacturers, and provide R & D teams and fund for them, then the levels of Chongqing's auto and motorcycle industry will be improved entirely. However, it is also controversial in the industry for auto and motorcycle manufacturers to own shares in the upstream auto parts industry. Mr. Zhang Zhengyuan, the Purchasing Centre General Manger of Xiaokang Auto, expresses that controlling upstream auto parts factories needs a great sum of money, which is not a problem for a big wealthy company, but for some companies which have limited scale and capital raising capability will be risky.
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Motorcycle Productin Figures for year 2011-2012
Monthly AutoMark Magazine
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Joint Venture Offer by Global Auto Sourcing Co (PK)
Monthly AutoMark Magazine
Attention Investors! Pakistan’s automotive future awaits you with “25% return within MONTHS”
Collaborate with us in the future of Pakistan’s auto manufacturing – The motorbike industr y to produce, market and sell an emerging leader in global motorbike brands Who we are: The first group to introduce the economical and high quality Chinese motorbikes manufacturer to Pakistan in 2002. Successful experience of the management dates back to 1989 in he motorbike industry. The group who helped establish several mediums and channels in different domains to help the Chinese motorbike and motorbike parts industry grow. Manufactures, produces, successfully markets and sells 2 leading motorbike brands currently in Pakistan.
What we are looking to do: The group is launching its new manufacturing facility in Sunder Industrial Estate Lahore (See details below) for assembling, producing, marketing and selling an emerging leader brand of high quality motorcycles. Joint venture/ business partner(s) to share the initial operational cost. Partnerships mean a lot to us and we offer on a 50-50% cost and profit ratio based on the investment made. We will in provide the area, land, motorbike assembling cum manufacturing plant, government approvals from FBR, EDB, PSQA, E&T – Most of all, the motorbike products that speak of their quality and demand and duly sell in great quantities.
We have a detailed business plan available for discussion in greater detail. Please view the details and benefits of our manufacturing cum assembling plant and its location.
Assembling plant location: Sunder Industrial Estate - Lahore Our assembling/ manufacturing plant is located in one of the best industrial sites of Pakistan, the Sunder Industrial Estate. A state of the art industrial park newly developed in Lahore with the following benefits: 1) Infrastructure and utilities: Fully functional with communications network, power, gas and water supply ready to use. 2) The safe harbor: An established base for auto parts, motorcycles and tri-wheeler companies 3) Superior geographical location: Covers the main motorcycle sales market i.e. Punjab with easy access to rest of the country – North Pakistan contributes to 70% of the total motorcycle market. 4) The supply chain cluster: Sunder Industrial Estate and its adjoining areas consist of several hundred companies manufacturing automobile and motorbike material and parts supplies. 5) Government support: Being the most popular mode of transport in Pakistan, the motorbike industry has recently started seeing and record breaking increase with an annual demand of about 2,000,000 (two million) motorbikes a month. In an effort to preserve this industry, the Government of Punjab and federal government is fully patronizing the industry to increase the production volumes of locally assembled motorbikes. 6) Security: One of the most peaceful, disciplined and planned industrial estates – Conduct business activities without any concerns. For more information, feel free to contact:
S.M.Yousuf Chief Executive Global Auto Sourcing Co. (PK) +92 300 2613692 globalautosources@gmail.com www.globalautosources.com www.automark.pk | Oct-2012 | Page 15
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Monthly AutoMark Magazine
Face to Face - Interview
Islam Engineering received Achievement award from the President of Pakistan
Muhammd Ishaq, Chief Executive Officer of Islam Engineering is receiving Achievement award from the President of Pakistan, Governor and President of Lahore Chamber of commerce are also present.
Muhammd Ishaq, Chief Executive Officer and Mr. Mushtaq Ali, Director of Islam Engineering are standing with the Achievement award.
An Exclusive Interview with Mr. Muhammad Ishaq, Chief Executive and Mr. Mushtaq Ali, Director of Islam Engineering (pvt) Ltd., Lahore by Hanif Memon In t he mot orcy cle sp are p art s manufacturi ng i ndu st ry, Islam Engineering (pvt) Ltd. has quickly climbed the ladder of progress. Its manufactured products have been hailed greatly throughout the country. It has also been awarded an “Achievement award” by President Asif Ali Zardari on the platform of Lahore Chamber of C o m me r c e f o r m a n u f a ct u r i n g international quality products and for progressing the national auto industry. Muhammad Ishaq Islam (MII) is the chief executive of Islam Engineering and Mushtaq Ali (MA) is the Director. They sat down with us for an exclusive interview. AM: When was Islam Engineering founded and historically what kind of company is this? Muhammd Ishaq said that the Company was founded in the year 2000 AD. We started manufacturing small motorcycle parts in which silencer
brackets and breaker brackets etc. were top of the list. We tried to maintain the highest standards while manufacturing parts, due to which they gained great popularity in the market and it was a good experience. This raised our hopes and gradually we started making fender, rear and front, crome and without crome, thankfully these also received good response from the market, after that we started delivering the main frame body of the motorcycle in the market which was also liked by the market and thankfully currently all motorcycle companies in Pakistan are
Muhammad Ishaq Chief Executive
Mushtaq Ali Director
using parts manufactured by us, as of this moment we are making one hundred thousand funds and twenty five thousand frames per month. AM: How much local and imported material do you use while manufacturing your parts? Mushtaq Ali said that we use material from South America and Belgium because they have nickel chrome and do not blend with the local material; hence only imported material is used. Our product quality is better than China.
We are the first one in Pakistan to follow the OEM quality fender. We are specilist manuf of ffender and frame. of 70cc bikes. AM: How do maintain your standard of quality? Muhammd Ishaq said, in this respect we have a state-of-the-art laboratory
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Monthly AutoMark Magazine
Face to Face - Interview Products made by Islam engineering are considered the symbol of quality in the motorcycle manufacturing industry. are examined on governmental level for this we consult the PSQCA for formal testing like the amount of time it will take for them to rust, after paying the official fees and obtaining their report the products are then sent to market. We were making fuel tanks before but now have reduced production, now we have created a rim manufacturing plant which will start delivering to market until next month. It will be a unique product in terms of quality and standard and will in get center-stage in important circles. AM: You were awarded “Achievement Award for the year 2012” by President Asif Ali Zardari, how do you recall those memorable moments?
Muhammd Ishaq and Mushtaq Ali said that we thanks to Allah, we started something very small level 12 years ago and now it’s a famous company. This is a great gift from God that we were awarded with many successes in such a short time. Surely continuous effort and no compromise on quality of our entire team led us to this moment when the country’s premier recognized us for our e ff ort s. It i s a huge accom p l is hm e nt , and surely a result of team efforts. This award is great effort by Lahore Chamber of Commerce as it has greatly motivated us. I would like to seize this moment to congratulate
the entire team whose efforts resulted in this outcome. AM: Are your products available in the entire country?
Muhammd Ishaq said that Thankfully, all our motorcycle parts especially frames and fenders are available throughout the country and known as a symbol of quality. Our major clients in Sindh are Unique, Fateh Motors, Raazy Motors, Jinan and in Punjab: Metro, Super Asia, Road Prince, United and other big companies are using our products. We are also thankful to government for - Our products are popular a ro u n d t h e co u nt r y. -We use 95% imported material and 5% local material -International standard is our motto. -Islam Engineering made the first OEM standard. reducing the markup rates from 13% to 10.5% it will cause the industry to progress. If it is reduced to on single digit (9%) it will be much beneficial for the industry. AM: The country is facing an economic crisis, what are the immediate steps needed to avert it? Mushtaq Ali said that Energy shortfall has brought a quickly progressing industry to a screeching halt and has caused immense damage. Long load shedding hours are causing industrialist huge headaches. Generators are dying after running for whole day. The
- Products by Islam engineering are available throughout the country - Our products are tested by PSQCA - Rims are made in the latest plant to be marketed.
government should do something in this regard and should at least guarantee uninterrupted power for the industries. The future of this country is bright just a lack of strategy. If good policies are made facilities are provided to the industries starting today the country can be brought to the right track. There is a huge amount of talent in the country, the citizens here are very intelligent. The best engineers, scientists and doctors are available here. You may notice that an uneducated person over here can learn work by observing and engineer and become a good technician and does work that puts foreign specialist in shock. The need to make technical institutes is absolutely necessary, the industry needs trained and skillful labor, and people who graduate from here can be exported as man power and billions of foreign exchange can be earned while the local industry will also benefit from the skillful labor. AM: According to you which govt. was the best for the advancement of the industry? Muhammd Ishaq said that General Pervez Musharraf’s time was the golden period of economic prosperity and the progress of country; Foreign investment was coming in quickly. Foreign reserves were on high level. AM: What facilities do you provide to your workers?
Muhammd Ishaq and Mushtaq Ali, both said that we dedicate all our a ch i e v e m e nt s t o our workers they are certainly our most prized assets, and we provide them facilities according to the govt. act. They perform their duties for eight hours and get yearly bonuses, old age benefits, social security and other benefits and taking c are of t h em i s our responsibility.
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Exclusive Article by Nadine Gangadeen
Monthly AutoMark Magazine
Safety Tips for the Drivers Defensive driving is defined as “minimizing risks by anticipating the actions and errors of others”. Here are some tips and suggestions to keep you safe and may save lives.
Before Driving: Make sure you have enough fuel, never allow the fuel gauge to fall below halfway. Cars have a way of running out of gas at the worst possible moment and this could invite an unwanted rescuer? Make sure your car is in good working condition. A dead battery, flat tire and empty windshield washer fluid (in mushy/messy weather) and an empty GAS tank are common causes of breakdown on the road and could create unsafe situations. Make sure you know in advance where you are going and how to get there; getting lost on the road can cause you to end up in an unknown dead or dark end. (a GPS can be very useful) Be sure to keep your cell phone/ blue toot h d evice fu lly charged f or emergencies.
While Driving: Driving with a clear, clean windshield is critical not just for your safety, but also for the safety of others. 90% of driving decisions are based solely on vision. Keep your windshield and wind ows clean fo r clear view. Keep your doors locked and your windows closed. If you find an egg yolk on your windshield (This could be carjacker’s trick) do not use your windshield wiper or washer as this could turn into a milky-mess. Instead, try and see through the windshield’s clear spots and pull over slowly to the closest gas station for proper cleaning. Keep an eye on the rear and side view mirrors to lookout for those nearby and if you are being followed. Allow room between your car and the car in front of you so you can maneuver quickly if you need to get away. Avoid the curb-side lane whenever possible. Fast operators can break a car window, unlock the door and be inside within seconds.
Avoid idling your car in neutral. You might have to move quickly. Be careful at stoplights and on expressway off ramps. Car-Jackers often bump into the back of a car to get the driver to pull over. If you are bumped from behind and it seems suspicious, motion to the driver to follow you. Move at a slow but steady pace to the nearest gas station, police station or well-lit wellpopulated area. A car-jacker will disappear quickly. Keep your valuables out of view while driving. Never leave it on the seat next to you. Experienced purse gabbers can reach and grab a purse and be gone within seconds. The best place to keep valuables is in the locked glove compartment or rear trunk.
When ap pro aching or parking your car: Always try to park near busy and lighted areas. Avoid curb side/end spots; these are very easy to access for burglars to break-in. Check for any sales flyers on front or windshield/windows. Watch around and remove all when safe to do. Some carjackers intentionally place such sales flyers laced with chemicals to induce sleepiness to make you unconscious. Keep your car locked at all times, whether you are inside the vehicle or not. Do not leave your car keys inside the ignition or in running condition without an adult occupant. Do not leave kids or pets unattended in your car. Have your car ignition lock/door key ready in your hand. Do not use keyless entry until you get near to your car. Too early action can invite unwanted guests
on the back seat or in the trunk. If you are alone look around first and open the driver side door only. Use a cell Nadine Gangadeen phone camera to take pictures if you find suspicious activities near your car. Check to make sure no one is hiding in or under your car. Carry a small flashlight to check dark areas. Be aware of any occupied cars nearby. If you find suspicious situations wait until it is safe to move. Drive into your garage front first so the headlights illuminate the total area. Your own garage is a perfect place to get mugged. When entering the house door, make sure no one unknown is behind you.
If someone tries to take your car: If your windows are up, your car is locked and you can maneuver out of the way, hit your horn and step on the gas. Move quickly and safely. If the burglar has a weapon, give up your car immediately. Do not fight or argue. Your life is more precious than the car. If your child is in the car and you are forced out and cannot grab the child, immediately yell, “There’s a baby in the car!” to warn every one around. Take a note of the full description of the suspect such as age, height, weight, ethnicity, and call 911 or local emergency phone number at once to report the incident to the police or local law enforcement authorities. Remember: Be alert, be aware and be safe. Don’t drink and drive! Drive Safe … Safety starts with you! About writer: This exclusive article on ‘Safety Tips’ has been written for Automark magazine by Nadine Gangadeen, Freelance J ournalist in Toront o, C anad a
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Monthly AutoMark Magazine
Exclusive by Asif Masood
What is pushing up Gas Tariff The major cause of energy crisis is poor governance as Pakistan still has far more options than many other countries in the region. Presently, about 70 per cent of crude oil and 55 per cent of POL consumption is met via imports. Energy demand has increased radically during the last ten year, but the supply has failed to match this growth due to policy failures with respect to:
Congratulation!
As winter season is knocking the door, government of Pakistan team led by Mr Zardari & Prime Minister Mr Raja Pervaiz Ashraf has completed the century of CNG price with concrete support of Dr (MBBS) Asim Hussain, Federal Minister for Petroleum & Natural Resource. The CNG price has been increased by Rs 1.59/- the new price is Rs 99.28/- kg in determination of new tariff policy. Now, the government is determining the tariff on weekly basis just to fill the government treasury by shifting the load on to the poor people of the country. Pakistan is a mess. It is controlled by a cadre of active and retired military and civil personnel in collusion with landlord Politicians. This elite class controls the country’s biggest and most important businesses, and holds most of the political power as well. All decisions are based on what serves their interest. There is chronic and persistent lack of planning in Pakistan or as they say “Poor Planning leads to Poor Performance”. Pakistan still has huge untapped gas reserves. If we allocate more resources to their exploration there is a possibility that in the near future part of the energy resource gap may be met from new reserves. The current gas prices and the limits they place on increasing the profitability of this sector would not attract any reasonable amount of investment, whether local or foreign, since the cost of exploration has gone up substantially and current well head prices do not justify further investment at the current rate of return. Present energy crisis, though also a global problem, has become a critical socioeconomic issue for Pakistan and is rooted in the country’s poor governance.
• Setting up viable new power projects • Increasing exploration of natural gas, crude oil and coal • Tapping regional markets and setting up infrastructure for energy imports • Effective implementation of energy saving plans • Incentivizing development of other energy sources The supply shortfall of natural gas has ranged between 10-15 per cent of demand. The net demand in the current fiscal year would be around 5.497 Bcf/d which will further expand to around 6.354 Bcf/d by 2015-16, with gas shortfall estimated to expand from 2.458 Bcf/d in 2012-13 to 3.021 Bcf/d in 201516 as is obvious from demand-supply position. The major cause of energy crisis is poor governance as Pakistan still has far more options than many other countries in the region. Presently, about 70 per cent of crude oil and 55 per cent of POL consumption is met via imports. Pakistan had 28 trillion cubic feet reserves of natural gas in 2006 but due to increase in its demand it is expected to be exhausted in next two decades. Effective management, check and balance in the transmission and distribution system, starting of new projects and public awareness is the need of the hour to tackle these crisis. Moreover, building hydro-electric dams,
tapping gas reserves in Balochistan and coal power plants is needed to be developed on urgent basis. Now, this is the time when Ministry of Petroleum & Natural Resources has to sit down seriously, and develop a comprehensive energy policy covering all elements of the energy supply chain including power, oil and gas, energy efficiency, renewable energy, and cross links between energy sector fuels. The policy should provide uniform rules and incentives, visibility, and a level playing field to promote private sector investments. The policy should reflect economic pricing of energy and a phasing out of untargeted subsidies. There has been a consistent lack of transparency and several governance lapses in the natural gas sector which have led to various kinds of concerns in important areas such as investment levels in blocks, availability of information regarding gas finds, content and process of arriving at pricing and utilization policy, regulatory weaknesses and emerging market concentration. So the question arises, if the government is the biggest debtor and the biggest creditor, why the government managers are unable to resolve the issue? After all, shortages of electricity and gas supplies have impacted the society on a large scale in terms of unemployment, poor living standards, loss in production and much more. The government frequently imposes electricity and gas rationing across the country in an effort to mitigate its energy shortage but cuts have slowed down production and increased the cost of operating businesses, forcing many small businesses to close and to lay off workers. The challenges faced by Pakistan are by no means easy. It is indeed the case that the matter of reforming the electricity
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By Mohammad Shahzad S.A.E; D.M.P
Monthly AutoMark Magazine
RUST… A Bitter Enemy! Your Car’s Skin Cancer There are countless additional benefits of rust protection; it also enhances the life of undercarriage hardware, brake and fuel lines. Over time these expensive hardware seize-up and tend to break apart during removal or lose their useful life. The bodywork on your car can be compared to your skin. If you don't apply suntan lotion, sunscreen or body oil to protect it from burning while enjoying tanning in the sun, you can run the risk of having skin cancer from the solar ultra-violet rays. Similarly, your car’s bodywork can corrode leading to rust from elements due to wet environment such as rain, salty sea-breeze, if not treated properly to prevent it. The way you look after your body’s skin is similar to how you can prepare your car for weather conditions. Rust protection and prevention is your best weapon in the war against rust. By the time you first see the rust appearing, rainy water/salty sea-breeze (especially in sea port city Karachi) has already done the damage and sometimes it can be permanent. In many cases rust can lead to making the car not roadworthy and unsafe due to body met al perforation. This can also lead to having carbon mono-oxide, a common poison exhaust gas, drawn into your car cabin. This highly toxic dangerous gas can cause serious health hazard or even death. If you ever notice any exhaust gas leakages into your car cabin, open all the windows, stop driving at once and take it for complete inspection and body repair. Do not take any chances, especially when you are driving with closed windows.
What is rust? Before bat tl ing wit h t he r ust ,
can stay one step ahead of the rust.
Pot holes… Pools and Puddles
understanding it is important. Rust is the substance formed when iron compounds corrode in the presence of oxygen and water. It is a mixture of iron oxide and hydroxides chemically known as ferrous-Oxides or Fe2O3. Rusting is a common term for corrosion and usually occurs with steel metals. The salt in the water/sea-breeze or acid rain speeds up the oxidation process by acting as a catalyst. The problem with salty water or sea-breeze is that once the water is gone, the salt in water lies in wait to restart the forming of rust once more when moisture is present.
Rainy Shower The joy or suffering effects of monsoon raining season may be over, but it has left visible and hidden long term ripple rusty effects on your car body especially in the flooded area of Pakistan. Oddly enough, the worst time for rust is during the rainy season. Warm weather and wet rains reactivate rust, even after the rain has ended. While driving in rain is unavoidable, simple steps can be taken to keep rust under control. If you don’t give the rainy water a chance to take hold, you and your car
Potholes are created when water penetrates the top layer of asphalt through cracks in the road. After the moisture freezes and expands, sections of the pavement are forced up. The weight of vehicles going over this section of road breaks the pavement and the asphalt is forced out. Potholes are also caused due to defective or poor quality material used in during road construction and these are more frequent in the spring and quite visible after the monsoon. But unfortunately, in Pakistan more than 60% roads network is with deep and danger potholes, especially in the rural areas. After the rain, these pot holes turn into bath tubs for your car. This bitter chemical collected in the puddles cause splash and work their way up into the undercarriage/chassis of your cars and act as catalyst to rust process. This action promotes the insidious destroyer of iron and steel known as rust. The same splashing action can also cause a dirty splash to nearby pedestrians, so please respect road users and just slow down w hen y ou e nco u n t er p u d d l es .
Rust Prot ection and Prevention Most cars manufactured or imported in Paki st an ar e bu i lt on gen eral environmental and cli matically conditions. Nevertheless, all
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Monthly AutoMark Magazine
Exclusive Article - continuted
Cars can be an expensive purchase. You need to revive its beautiful look by effective treatments that will increase the longevity of your major investment. Rust never sleeps and can happen anytime and anywhere. manufacturers provides some basic factory rust protection, but the need of ad dit ional rust p rotect ion and prevention is based on your domiciled zone, (such as northern snow mountain areas or city like Karachi near sea), to help keep your car looking showroomnew. There are many types of protection packages available. When shopping for a rust protection package, check for details such as material, chemical, tools, application process, warranty coverage and a yearly inspection with a touch-up and re-spray, before making your final decision. There are countless additional benefits of rust protection; it also enhances the life of undercarriage hardware, brake and fuel lines. Over time these expensive hardware seize-up and tend to break apart during removal or lose their useful life. Since most cars are now built with 65%-85% computer controls systems, rust protection provides additional shield to safe these expensive electronics units and electrical circuit corrosion.
rainy seasons or apply rust remover, if needed, before applying any rust protection on undercarriage, hood, trunk, inside door and all outer body panels. Close attention should be paid to the fender wells and undercarriage, where there are plenty of nooks and crannies for salty water to get trapped in. Make sure to check that all of the drain holes under the doors are clear, so that the water collected during the wash can drain.
Environmental Elements Acid rain, the heat from the sun, bird droppings, tree sap, road salt & grime, rail dust, brake pads dust, industrial fallout and salty sea breeze are the prime root causes and sources related to ruining the look of the body of your car and the color finish. Keeping your paint in top shape is also a top line of defense against environmental deposits and rust
Wax Protection… An auto tan lotion for car’s skin care Rubberized undercarriage protection also provides a sound barrier from road noise and reduces your driving stress. It also controls dust from being drawn into the car from body joints or seams with the rust inhibitor. If your car is ever involved in an accident, make sure to reapply rust protection to new sheet metal body parts. The best time to apply rust protection is before you take delivery of your new car. However, if you haven’t done so, it is not too late yet. Make sure to get a thorough complete power wash to remove all old mud and rust buildup into the rust motels during winter or
Everyone wants to drive a nice, clean and shiny car. Penetrating colour, higloss, immaculate finish and eyecatching sparkle are features that make your car look fantastic. Preserving these characteristics on your car is made possible with quality paint protection by sealing both paint and clear coat, blocking ultra-violet rays preventing fading and oxidation to maintain a great looking shine. A polished, glossy and shiny car body bounces back the hot sunny rays faster to keep cabin cool for your comfort. Paint prevents rust by protecting the steel beneath it. A quality wax will keep the paint flexible and thorough enough
to deflect all that dust can throw at it. Any paint chips due to stone or scratches that expose the underlying steel should be touched up immediately to prevent surface rust expansion. A clean shiny car also tends to reduce air drag, wind and friction noises in high speed and can provide a smooth ride. Paint protection is designed to ensure your car's paintwork that will continue to shine and present itself in the true manner that first attracted you to the car.
Watch Your Intake A good set of rubber floor mats designed and recommended by your car manufacture can keep moisture or wet mud from getting through your carpet and causing expensive damage. Consider laying a plastic sheet to cover floor carpet, especially in a family van during the rainy weather. Cars can be an expensive purchase. You need to revive its beautiful look by effective treatments that will increase the longevity of your major investment. Rust never sleeps and can happen anytime and anywhere, yet it is easy to prevent it with a little extra tender loving care. Revive your car’s appearance to enhance safer motoring and rust free years, which will increase the resale value of your car, should you ever decide to sell or trade-in later. Look after your car’s Look, and enjoy the look of your car as new!
Have a safe and sound motoring! Next article: What to do, if your This exclusive article on Rust Protection has been written by Mohammad Shahzad S.A.E., D.M.P. , specially for Mo n t hl y A ut o Ma rk M ag az i n e . (Automotive Engineer/Doctor of Motors) He is a Senior Group Manager for Customer Management Operations with The Brimell Group, Brimell Toyota and Brimell Scion in Toronto, Canada. Free advice for Automark readers; please do not hesitate to contact him at shah@brimelltoyota.com or magazine@automark.pk
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Monthly AutoMark Magazine
Automotive Sector - Update
Bike assemblers await duty cuts in new trade policy MD Emerging Economics Research Muzammil Aslam said that the government should end protectionist policies and reduce custom duty to give more choices to customers. Local motorcycle assemblers are anxiously waiting to see a reduction in import duty of motorcycles but they are less optimistic thinking that despite long deliberations, the government may not cut back on duty from the present 65% to 35% in the upcoming trade policy. Motorcycle assemblers are confident that they can compete with imported motorcycles owing to their low prices and localised manufacturing for Pakistan. They think that government will continue framing protectionist policies for the local industry in the upcoming trade policy, too. There are over 70 motorcycle assemblers in Pakistan mostly producing 70cc motorcycles. Pakistan is one of the few
countries in region that are producing 70cc motorcycles that have over 85 percent share of the local market. In case, the government reduces custom duty, the most likely company that may slightly lose it share will be Atlas Honda –the industry leader with over 50% market share in Pakistan. Atlas Honda is targeting to produce 1 million units annually. The willingness of the local motorcycle assemblers to see reduction in duty is coming from smaller players not from all. The smaller firms think that reduction in duty will ease the import of new models and designs and hence, giving more choices to customers. Chairman of the Association of Pakistan
PAMA flays proposed cut in import duty The Economic Coordination Committee (ECC) has been asked to reduce the import duty on motorcycle CBU to 40 per cent from 65 per cent instead of earlier agreed 50 per cent. A sub-committee of the ECC headed by Chairman of Board of Investment Saleem Mandviwala has finalised a proposal to be presented as mutually agreed duties but the figures were different from what had been agreed in a meeting of industry players and stakeholders held in the second week of this month. The participants of the meeting including members of PAMA and and PAPAAM said that the BoI chairman was seemingly appeasing foreign investors and importers without realising the destructive impact on the local industry. They said the sub-committee had consulted the representatives of local industry and had categorically agreed to decrease the duty on CBU import to 50 per cent from 65 per cent, but strangely it turned everything upside down while drafting recommendation summary for the ECC which is going to
meet next week. The local stakeholders are worried over prevailing uncertainty and productions decline in the local bike industry and its allied sectors but it seems that ECC subcommittee doesn’t care about local industry while only lobbying for imported motorcycle companies. The sub-committee has also skipped to mention the condition of five per cent duty on the imports of CKD parts not made locally, despite the condition being agreed during the brief consultation. The committee members agreed that when such huge economies maintained tariff at such high level there was no logic in bringing down tariff to 35 per cent as earlier proposed to the ECC. Mandviwala clearly agreed to keep CBU tariff to 50 per cent and CKD rate to 10 per cent at the end of the meeting. There is no need to import of bikes as local assemblers are meeting the demand for the two-wheelers, he said. He urged that the government should learn a lesson from China and India which protected their local industries and empowered them to be leading exporters of motorcycle to the world.
Motorcycle Assemblers (APMA) Muhammad Sabir Shaikh said that duty cuts will ease motorcycle imports and it will not hurt local motorcycle assemblers or manufacturers at all. “I think more imports will help diversify local industry as local assemblers will assemble more models of different engine types,” he said, “even after the reduction in duty, Chinese bikes will not be able to compete with our local assemblers due to our competitive prices and local market knowhow.” They also believed that Pakistan will not be able to export its motorcycles to India because of heavily protected local industry there. Organised sector feared that India will grab a major share of the market in Pakistan but Pakistan will not be able to export to India. However, the small assemblers were happy to see trade with India opening up so that they can import and assemble India models in Pakistan. Ma n a g i n g D i r e c t o r E m e r g i n g Economics Research Muzammil Aslam said that the government should end protectionist policies and reduce custom duty to give more choices to customers. “I think the government should immediately reduce custom duty because the motorcycle is strong enough to compete with imported motorcycles,” said Aslam, “Local manufacturers claim that they have achieved over 90% deletion process (percentage of locally produced parts) so why are they hesitant to compete with imported motorcycles?” Motorcycle industry in Pakistan has been expanding at a rapid pace. With ov er 70 pl ayers , t he i nd u st ry manufactured about 1.6 million motorcycles in 2011 – a record high. Ten years ago, that number was barely above 100,000. Industry experts believed that this figure may soon touch the 2 million mark as demand in Pakistan continues to increase.
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International Automotive Industry - Briefs
Toyota looks to double sales in China by 2015 Toyota executive vice president, said the Japanese auto giant hopes to sell between 1.5 million and 1.8 million units annually in the next three years.
Toyota President Akio Toyoda introduces a hybrid concept at the Beijing auto show in April. (Asahi Shimbun file photo) Seeking major growth in the world's largest car market, Toyota Motor Corp. announced Sept. 6 that it plans to double its sales in China by 2015, which could exceed the company's domestic sales volume. At an international automotive
SKF opens bearing factory in Jinan SKF, a Swedish producer of bearings, seals and lubrication systems, officially opened a factory in Jinan in east China's Shandong province. The plant produces roller bearings and hubs for China's truck market. The company invested 590 million krona (570 million yuan) in the facility, which employs 500 workers. SKF, which is headquartered in Gothenburg, Sweden, generated sales of 64 billion yuan last year. The company has 46,000 global employees...
Toyota Scraps Electric Vehicle Plans, Will Focus on Hybrids Toyota's plans to release an all-electric minicar have been trashed, according to Reuters, whichreported that the carmaker "misread the market" and overestimated the still-emerging battery technology. The Japanese company originally announced plans in 2010 to roll out several thousand battery-powered eQ vehicles per year, but instead will provide an extremely limited release of 100 vehicles in the U.S. and Japan.
conference in Chengdu, Sichuan province, Atsushi Niimi, Toyota executive vice president, said the Japanese auto giant hopes to sell between 1.5 million and 1.8 million units annually in the next three years. If 1.8 million units is realized, Toyota will surpass its sales in Japan at some 1.6 million units projected for this fiscal year. Toyota said it will boost its lineup in China from next year by releasing compact cars and other new models developed specifically for the Chinese market. Toyota also said it will establish a research institute in Jiangsu province to step up development and production in the country. The firm plans to introduce a sedan and a compact hatchback developed for China next year. It also plans to sell a gas-electric hybrid around 2015 that will be developed in China.
Mahindra opening engineering center near Detroit in U.S. Mahindra & Mahindra Ltd. the Indian utility vehicle and farm equipment maker, announced last month it was opening a technical center near Detroit to supply engineering services to the huge US car industry. Rajan Wadhera, Mahindra's chief executive for automotive technology and product development, said its new technical center in Tory, Michigan, run by Mahindra Engineering Services, is the group's first such center outside India. They aim to have about 100 employees in the next six to eight months, company officials said. "Because of its ties to the automobile industry and motor sports, Detroit is known as the Motor City around the world. We wanted to be part of that culture," he said. Mahindra has already signed up General Motors, Navistar, Volvo and Bentley as clients for its engineering services, he added.
Monthly AutoMark Magazine
Tata Motors receives order for 320 CNG buses
Tata Motors has received an order for 320 Tata Marcopolo fully-built, frontengine CNG buses under the Delhi Integrated Multi-Modal Transit System (DIMTS) cluster scheme in India. Tata LPO 1613/55 CNG BSIV drive-train is driven by a 96 kw TATA 5.7 SGI Bharat Stage IV engine and has been designed as per city transportation needs. The company said that the bus has been mated with a GBS 40 gearbox for higher fuel efficiency, 330mm diameter clutch for improved life, and heavy duty forgedI beam, and reverse elliot front-axle for better maneuverability. Tata LPO 1613/55 CNG BSIV fully-built, front-engine CNG buses, the company will address the burgeoning need of the residents, with the least CO2 emissions. "Tata Motors has always been at the forefront in revolutionising passenger transportation, and has closely worked wit h the New Del hi transp ort authorities, for many years, to further increasing use of public transport," Pisharody said.
China's Biggest Automotive Proving Ground The largest automotive proving ground in China was completed on September 22 in Guangde of Anhui province. With a total investment of 1.6 billion yuan ($254 million), the test facility covers an area of 5.67 square kilometers and contains 67 types of roads, including waterlogged roads, dirt and stone roads and uphill roads. Automotive proving grounds are designed for development and validation testing of new vehicles. Two and a half years ago, Shanghai General Motors Co.(Shanghai GM) and its subsidiary Pan Asia Technical Automotive Center Co.(PATAC) started pouring up to 1.6 billion yuan into the facility. It is believed to come first among all the vehicle test grounds throughout the country, whether in terms of the area, combined length of test roads and varieties of road surfaces or by installations and technical levels. It was based on the most advanced technology GM, one of the world's largest automakers has and set up as standard, with a total of over 60 kilometers of roads.
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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 GLX MT (Petrol) APV 1.5L GLX MT (CNG) JIMNY JL SX MT JIMNY JL DX MT)
HONDA Price Price Rs. 575,000 Rs. 632,000 Rs. 1,151,000 Rs. 1,231,000 Rs. 1,366,000 Rs. 985,000 Rs. 1,382,000 Rs. 1,461,000
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 Rs. Rs. Rs. Rs. Rs. Rs.
654,000 630,000 2,099,000 2,174,000 1,074,000 2,223,000
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
Honda Honda Honda Honda Honda Honda Honda Honda
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
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)
Price Price Rs. 1,537,500 Rs. 1,672,500 Rs. 1,827,500 Rs. 1,602,500 Rs. 1,732,500 Rs. 1,607,500 Rs. 1,809,000 Rs. 1,914,000 Rs. 1,902,500 Rs. 1,997,500 Rs. 1,997,500 Rs. 2,087,500 Rs. 1,960,000
Toyota Avanza (Up Specfication)
Rs. 2,160,000
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
TOYOTA VIGO Price Model
Rs. 2,878,500
LAND ROVER Model
Price
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 Oct- 2012
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Automotive Sector - Research Report
Monthly AutoMark Magazine
The role of Automobile industry in the economy of Pakistan its growth. Its impacts negative as well as positive Introduction Literature Review Evolution of Automobile Industry with special reference to Pakistan Automobile Industry in Pakistan and comparison with the Indian counterpart Automobile Industry and the Allied industries Workshops Spare parts markets
Im p a ct on e co no m y Contribution to the GDP Impacts Positive impacts Economic impacts Social impacts Negative impacts Economic impacts Social impacts
SWOT Analysis Conclusion Bibliography Introduction Since ages man is trying hard to cover the distances between different places in the shortest possible time. In order to fulfill this dream man invented the automobile and within years the automobiles became a common mode to travelling to different places and replaced the traditional means of using animals . With this increasing demand for the newly invented automobiles its production also increased many folds. This industry also gave rise to many allied industries and provided jobs to millions of people all over the world. This i ndustry also cont ributed its due share in the GDP of the country via import duties, sales tax, federal excise duties etc. However the increasing number of automobiles also had different impacts which affected
human lives, atmosphere, social fabric etc.
Literature review The group studied variety of literature to gather in depth knowledge of the assigned topic of research study which includes periodicals, articles, research reports, case studies, economic analysis, financial data of major companies, economic survey of Pakistan , websites and newspapers. Mr. Zahoor Sheikh Sarwar (CASE), Mr. Azam Ishaque, (CASE), Mr. Nadeem Ehsan, (Center For Advance Studies in Engineering), Mr. Danial Saeed Pirzada, (Center For Advanced Studies in Engineering), and Mr. Zafar Moeen Nasir, (CASE) in their report published in International Journal of Productivity and Performance Management, has identified that automobile sector has huge economic potential and the study identified the prevalent condition of productivity in automotive manufacturing industry of Pakistan and indicated the possible areas for enhancing productivity. The findings of this research have revealed that effective utilization of role of technology can enhance the productivity of Pakistani manufacturing firms drastically. Pakistan Auto Industry Development Program (AIDP-2006), an study conducted by Ministry of Industries
and Production, Government of Pakistan states that the Pakistan Auto Industry has become a leading industrial sector to steer the growth in large scale manufacturing sector. The high economic and job multiplier effect of this industry and its deep forward and backward linkages in allied industries, make the auto industry a key player in the national economy. The report further elaborates that Pakistan is amongst a few countries of the world which manufacture all kinds of vehicles i.e. 2/3 wheelers, motorcars, LCVs, tractors, primemovers & trucks and buses. The total country requirements are generally met from the local production except the import of certain categories of trucks & prime-movers. Import of used cars is allowed to the bonafide ex- patriate Pakistani’s and travelers only under the baggage scheme. The presence of few of world acclaimed brands and multinationals in the manufacturing of vehicles for the last 2 to 3 decades and their regular expansion plans speak of their confidence on the market, government policies and economic potential of the country. Pakistan auto industry turnover during the year 2005-06 crossed US $ 3.6 billion which comes to 2.8% of GDP (2005-06), thus saving substantial foreign exchange on imports. The job contribution by auto industry comes to nearly 1.392 million which includes direct jobs of nearly 192,000. The auto industry remains second largest tax payer in terms of its contribution to customs duty, sales tax and withholding tax. The export contribution however, is marginal and growing slowly, which otherwise has high potential to grow in the coming years. AIDP envisage to achieve a critical mass of production, double the contribution of auto industry to GDP from the existing 2.8%, by the year 2011-12
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Monthly AutoMark Magazine
Research Report - Continued
The liberalization of used car policy saw an increase of 87% in the number of used vehicle imports to 6,793 units in the fiscal period. If such policy continues it will impede the growth of auto industry. with high focus on investment, technology up gradation, increasing its exports to US$ 650 million, enhancement in jobs alongside the development of critical components to further increase the competitiveness of domestically produced vehicles. the group also come across financial information of the leading manufacturers which formed the basis of our opinion that the benefits of reduction in sales tax and the removing of Federal Excise Duty from the sector has not been shifted to end consumers which shows marginal economic benefits to the manufacturer of the automobiles only. The Board of Investment, Government of Pakistan quoted the newspaper Pakistan Observer that contrary to huge Indian automobile industry in spite of offering discounts and attractive sops, is suffering from depressed sales, the nationwide auto sales increased by 3.4 percent in Pakistan. The sales of locally assembled passenger cars (PC) and light commercial vehicles (LCV) in the country increased by around 3.4% over the previous year to 146,497 units as compared to 141,654 units sold in 2009-10. Production in the industry also increased to 153,997 units for the period ended June 30, 11, an increase of 11% over 138,587 units last year. Punjab government’s offer of green cabs has also contributed in growth of sales and the next quarter is likely to be stronger even going forward. The liberalization of used car policy saw an increase of 87% in the number of used vehicle imports to 6,793 units in the fiscal period. If such policy continues it will impede the growth of auto industry. The sales and production of Indus Motor’s Toyota and Daihatsu brands for the year ended June 30, 2011 has posted sales rev enue increased t o Rs 61.7 billion, up by 2.7% over Rs. 60.1 billion of last year; and the after tax profit decreased to Rs 2.7 billion, low by 21% of Rs 3.4 billion of
last year. Earnings per share also decreased to Rs 34.90, as compared to Rs.43.8 1 in the previous year. The economic survey of Pakistan 20 1 0- 1 1 ( F i n a n c e Di v i s io n Government of Pakistan) in its report states that the growth in automobile industry across the world depends heavily on economic growth and availability of financing from financial institution at favorable terms. The sector recorded positive growth in cars, LCVs/Jeeps and two/three wheelers during July-March-2010-11 as compared to same period of the preceding year whereas the Buses, trucks and tractors witnessed a decline in their production as compared to the previous year. The automotive sector has explored the export market, such as 7563 motorcycles and 64 auto rickshaws were exported in the last financial year. However, 9022 motorcycles and 72 auto rickshaws have been exported up to (July- March) 2010-11. The Car/LCV sector has also exported 359 vehicles & parts worth US $ 1.58 million in the last financial year and 397 vehicles and parts worth US $ 1.66 million in the current year up to (July-March) 2010-11. According to economic survey in spite of marginal growth of 0.5% points the performance of the automobile industry is affected by the factors like weakening of demand in the international and domestic market, inflation, high input costs, high government sector borrowing crowding out availability of credit to the private sector and acute energy shortages. However, events like the unprecedented floods and destruction in supply chain due to earthquake and tsunami in Japan, compounded with a general slow down in the economic environment, lower GDP growth, rising interest rates, limited credit availability for auto financing, depreciation of the Pak Rupee against major currencies, unprecedented rise in prices steel and other inputs, inflation, etc impacted the demand
negatively.
The History of Automobile Industry European engineers started tinkering with motor powered vehicles since late 1700's. Steam, combustion, and electrical motors had all been tried by the mid 1800's. By the 1900's, it was unsure which type of engine would power the automobile. At first, the electric car was the most accepted, but at the time a battery did not exist that would allow a car to be in motion with much speed or over a long distance. Although some of the earlier speed records were set by electric cars, they did not stay in manufacture past the first decade of the 20th century. The automobiles with steam lasted into 1920's. However, the price on steam-driven engines, either to build or maintain was unparalleled to the gas powered engines. Not only was the cost a problem, but the danger of a boiler explosion also kept the steam engine from becoming popular. The combustion engine constantly beat out the competition, and the early American automobile pioneers like Ransom E. Olds and Henry Ford built reliable combustion engines refusing the ideas of steam or electrical power from the start. Automotive manufacturing on a commercial scale started in France in 1890. Commercial production in the United States started at the beginning of the 1900's and was equivalent to that of Europe's. In those days, the European industry comprised of small independent firms that would turn out a few cars by means of precise engineering and handicraft processes. At the start of the century the automobile entered the transportation market as a toy for the rich. However, it became increasingly popular among the general public because it gave travelers the freedom to travel when they wanted to and where they wanted. As a result, in North America and Europe the price of automobile decreased and
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The Automotive industry has been an active and growing field in Pakistan for a long time, however not as much established to figure in the prominent list of the top automotive industries.
they became easily accessible to the middle class. This was facilitated by Henry Ford who did two important things. First he set price of his car to be as affordable as possible and second, he paid his workers enough to be able to buy the cars they were manufacturing. This helped increase wages and auto sales. The convenience of the automobile freed people from the binding to live near rail lines or stations; they could choose locations almost anywhere in city area as long as roads were available to connect them to other places. Popularity of the automobile has moved side by side with the state of the economy, growing during the boom period after World War I and decreasing abruptly during the Great Depression, when unemployment was at most. World War II saw a large increase in mass transit because employment was high and automobiles were lesser. The rapid growth of car owners after World War II demonstrated the people's favor towards automobiles. During the war, there was a shortage of automobile motors, fuel, and tires. There was an increased demand when the war ended and plenty of production capacity as factories turned off the war machine. Many people had enough money in store because there was little to buy, beyond necessities, in the war years. Workers relied heavily on mass transportation during the war and wanted the freedom and flexibility of the automobile. A historian has said that Henry Ford freed common people from the boundaries of their geography. The automobile brought mobility on a scale never known before, and the total effect on living habits and social customs is endless. In the times of horse-drawn transportation, the
practical limit of wagon travel was 10 to 15 miles, so that meant any community or individual farm more than 15 miles from a city, a railroad, or a navigable waterway was isolated from the rest of economic and social life. Motor vehicles and paved roads have shortened the gap between rural and urban life. Farmers can ship easily and economically by truck and can drive to town when it is feasible. In addition, such institutions as regional schools and hospitals are now approachable by bus and car. Yet, the effect on urban life has been, if anything, more prominent than the effect on the farms. The automobile has completely changed city life by accelerating the outward expansion of population into the suburbs. The suburban trend is emphasized by the fact that highway transportation supports business and industry to move outward to sites where land is cheaper, where access by car and truck is easier than in richly populated cities, and where space is available for their one or twostory structures. Better roads were constructed, which further improved travel throughout the nation. Before the automobile, people both resided in the city and worked in the city, or lived in the country and worked on a farm. Because of the automobile, the growth of suburbs has rendered people to live on the outskirts of the city and be able to work in the city by commuting. New jobs due to the impact of the automobile such as fast food, city/highway construction, state patrol/police, convenience stores, gas stations, auto repair shops, auto shops, etc. allow more work for the world's growing population. The Automotive industry has been an
active and growing field in Pakistan for a long time, however not as much established to figure in the prominent list of the top automotive industries. Despite significant production volumes, transfer of technology and localization of vehicle components remains low. Most cars in the country have dual fuel options and run on CNG which is more affordable and cheaper than petrol in the country. Pakistan produced its first automobile in 1953 and from 1953 to 2011 the journey of auto industry has been rough, tough and sometime very smooth. Car industry saw boom in 2006-2007 when sales touched record peak of 180,834 thanks to rising car financing up to 70-80 per cent by banks due to low interest rates and rising rural buying. Since then the industry has been surviving hard to reach the same sales level amid high interest rates and Yen appreciation against the rupee but high farm income is giving much support to car sales.
Automobile Industry in Pakistan and comparison with the Indian counterpart Automobile Industry in India The Automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010. According to latest reports, India is near to become the sixth largest passenger vehicle producer in the world, growing 16-18 % and to sell around three million units in the course of 2011-2012. In 2009, India
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Tata Motors is leading the commercial vehicle segment with a market share of about 64%. Maruti Suzuki is leading the passenger vehicle segment with a market share of 46%. Hyundai Motor India and Mahindra and Mahindra are expanding their footprint in the overseas market. became Asia's fourth largest exporter of passenger cars, after Japan, South Korea, and Thailand. During 2010, India has made progress to 40 million passenger vehicles and more than 3.7 million automotive vehicles (an increase of 33.9%), making country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual car sales will increase up to 5 million vehicles by 2015 and more than 9 million by 2020. By 2050, the country is expected to be on the top of the list in the world, in car volumes , with approximately 611 million vehicles on the roads of India. The largest car manufacturing industry of India is established in Chennai, also known as the "Detroit of India" with the operations of Ford, Hyundai, Renault and Nissan headquartered in the city and BMW having an assembly plant on the outskirts. Chennai accounts for 60 % of the country's automotive exports. Gurgaon and Manesar are hubs and all of the Maruti Suzuki cars in India are manufactured in Haryana. The Chakan corridor near Pune, Maharashtra is another vehicular production hub with companies like General Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Fiat and Force Motors, having assembly plants in the area, Ahmedabad with the Tata Nano plant and planned Ford and Peugeot-Citroen plants Halol again with General Motors, Aurangabad with A ud i, Sk od a a nd V ol ks wag en, Kolkatta with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing localities around the country. Every year Indian Automobile Industry is manufacturing over 11 million and exporting about 1.5 million vehicles. The prominent and dominant products of the industry are two wheelers with a market share of over 75% and passenger cars with a market share of about 16%. Commercial vehicles and three wheelers
share about 9% of the market. Households use about 91% of the vehicles sold and only about 9% are for commercial purposes. The industry has attained a turnover of more than $US 35 billion and provided employment to more than 13 million people. The supply chain of the industry in India is very similar to that of automotive industry in Europe and America. This may present its own set of opportunities and threats. The order of the industry arises from the consumers and goes through the automakers and until to the third tier of suppliers. However the products, like every traditional automotive industry, flow from the top of the supply chai n to reach the consumers. Interestingly, in India the level of trade exports in this sector has been medium and imports have been low. However, now this is changing and both exports and imports are increasing. The demand determinants of the industry are factors like affordability, product innovation, infrastructure and fuel price. Also, the competition in this sector is high and increasing. All the advantages of this sector in India are yet to be leveraged with a rapidly growing middle class. Due to high cost of developing production facilities, limited access to new technology and tough competition, the obstacles to enter Indian Automotive sector are high. India has a well-developed tax structure. The power to impose taxes and duties is distributed among the three tiers of government. The cost structure of the industry is fairly traditional, but the profitability of motor vehicle manufacturers has been rising over the past five years. Major companies like Tata Motors and Maruti Suzuki have material cost of about 80% but earning profits after tax of about 6% to 11%. The level of change in technology in the Motor vehicle Industry has been high but the rate of change in technology has been medium. Investment in technology by the
producers has been high but further investment in new technologies will help the industry to be more competitive. Over the last few years, the industry has been volatile. Recently, India’s growing per capita income which is expected to rise by 2015 with the growth in exports and competitiveness of the industry. Tata Motors is leading the commercial vehicle segment with a market share of about 64%. Maruti Suzuki is leading the passenger vehicle segment with a market share of 46%. Hyundai Motor India and Mahindra and Mahindra are expanding their footprint in the overseas market. Hero Honda Motors is occupying over 41% and sharing 26% of the two wheeler market in India with Bajaj Auto. Bajaj Auto in itself is occupying about 58% of the three wheeler market.
Impact of Automobile Industry on the economy of India At present time, Indian automobile industry is making a major contribution in increasing the country's GDP by 9% every year. New heights has been scaled by the industry in the year 2010. In January 2010, total automobile sales in the domestic market reached 1114157 units, the figures shows an increment of 44.9% compared to the sales units of 7,68,698 of same period last year. Even for the month of AprilOctober after a gap of 11 years, total automobile sales in India stood at 1,120,081 Units. Annually, the Indian automobile industry is growing at an average rate of 30% and marking itself as one of the fastest growing industries in India. According to the reports of Society of Indian Automobile Manufacturers, annual car sales are estimated to reach 5 million vehicles by 2015 and more than 9 million by 2020. To believe New York Times reports, several automobile companies like Hyundai Motors,
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United Kingdom is largest export market for India's automobile industry followed by Germany, Netherlands and South Africa. In the year 2009-10, India has made a huge profit by exporting 1,804,619 no. vehicles. Different brands are utilizing the Indian automobile engineering expertise to manufacture and export maximum no. of vehicles from their Indian plants. Nissan, Toyota, Volkswagen and Suzuki have expanded their manufacturing facilities owing to India's strong engineering base and expertise in the manufacturing of low-cost, fuelefficient cars.
Passenger Vehicles Three Wheelers Two Wheelers Grand Total
Market share of different vehicles in the Indian automobile Industry
For FY 2011, Maruti Suzuki held a reasonable market share of 48.74 per cent while that of Hyundai was around 18.10 per cent. Tata Motors' market share stood at 12.92 per cent for the period. General Motors India (GMI) and Honda Siel cars India (HSCI) had a market share of 4.40 per cent and 2.97 per cent respectively during FY2011. According to the data released by the Society of Indian Automobile Manufacturers (SIAM), Maruti held 43 per cent of the total Indian passengercar market in the six months ended September 2011 as against Hyundai's 20 per cent pie. Key Statistics SIAM expects India's car sales to grow 2-4 per cent in the fiscal year ending March 2012 while a growth of 13-15 per cent is projected in commercial vehicles' sales segment. Car sales in September 2011 stood at 165,925 cars. Sales of commercial vehicles (a key indicator of the country's economic activity), increased by 18.05 percent to 70,634, while motorcycle sales rose 19.93 percent to 933,465 of them in September. Total sales of vehicles across categories witnessed a growth of 19.39 per cent to 1571,342 units in September 2011 from 1316,118 units in the corresponding period last year. The sales of scooters increased by 50.74 per cent to 231,710 units (from 153,716 units in September 2010) while that of three-wheelers stood at 49,255 units (from 48,814 units in September 2010) in September 2011. Overall automobile exports registered a growth rate of 32.31 per
Passenger Vehicles 15.86% Commercial Vehicles 4.32% Three Wheelers 3.58% Two Wheelers 76.23% The production of automobiles in India has greatly increased in the last decade. At present India is the largest tractor and three-wheel vehicle producer, second largest two-wheel vehicle producer, fourth largest commercial vehicle producer and eleventh largest passenger car producer. For the year 2003-2004 the production rate crossed 7,243,5648 and for the current year it has reached 14,049,830 in terms of total vehicles production. As a result of all this, the resultant annual turnover of the Indian automobile industry for the year is recorded to be 38,238 million USD by Society of Indian automobile Manufacturer (SIAM). For the year 2009-10, the production rate for different category of vehicles is as followed (As per SIAM) Passenger Vehicles 2,351,240 Commercial Vehicles 566,608 Three Wheelers 619,093 Two Wheelers 10,512,889 Grand Total 14,049,830
Export Market Statistics Last year, India's automobile exports had reached $4.5 billion and a consistent export growth rate can be estimated in the year 2010 also with the estimation that it will cross $12 billion by 2014. As per the SIAM records automobile exports have under gown a growth of 22.30 percent during the current financial year. United Kingdom is largest export market for
1,949,776 440,368 9,371,231 12,292,770
Market Dynamics
India's automobile industry followed by Germany, Netherlands and South Africa. In the year 2009-10, India has made a huge profit by exporting 1,804,619 no. v ehicl es. Di ffer ent brand s are utilizing the Indian automobile engineering expertise to manufacture and export maximum no. of vehicles from their Indian plants. Nissan Motors plans to export 250,000 vehicles manufactured in its India plant by 2011. Similarly, General Motors announced its plans to export about 50,000 cars manufactured in India by 2011. Listed below is the statistics showcasing export sales rate of Indian automobile i ndustry for the y ear 2009-10 Commercial Vehicles 45,007 Passenger Vehicles 446,146 Three Wheelers 173,282 Two Wheelers 1,140,184 Grand Total 1,804,619
Domestic Market Statistics According to Society of Indian Automobile Manufacturers (SIAM), there has been a growth of 32.28% in the domestic car sales, justified from the January 2010 sales 145,905 units against the 2009 sales of 110,300 units. The Commercial Vehicles segment grew marginally at 4.07 percent. While Medium & Heavy Commercial Vehicles declined by 1.66 percent, Light Commercial Vehicles recorded a growth of 12.29 percent. Listed below is the statistics showcasing domestic market sales rate of Indian automobile industry for the year 2009-10. Commercial Vehicles 531,395
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Engineering Development Board (EDB) is actively implementing the AIDP to increase the GDP contribution of the automotive sector to 5.6%, boost car production capacity to half a million units as well as attract an investment of US$ 3 billion and reach an auto export target of US$ 650 million. cent during April-December 2011. Passenger Vehicles registered growth at 21.01 percent in this period while two-wheelers, commercial vehicles and three wheelers segments recorded growth of 32.34 per cent, 35.91 per cent and 49.55 per cent respectively.
Automobile industry in Pakistan According to Ministry of Industries, Pakistan produced its first vehicle in 1953, at the National Motors Limited, established in Karachi to assemble Bedford Trucks, while buses, light trucks and cars were also assembled in the same plant. In early 1990’s the industry was highly regulated but after deregulation, major Japanese manufacturers entered in the market, creating some competition in this sector. Assemblers of HINO Trucks, Suzuki Cars (1984), Mazda Trucks, Toyota (1993) and Honda (1994) in particular, entered when deregulation was introduced. Assembly of Daihatsu and Hyundai cars (1999) and various brands of LCVs and mini-trucks are commenced recently. After the tragedy of September 11, 2001, increase in the home remittances has resulted in greater liquidity in the market and at the same time profitable investment schemes are negligible, therefore, people started to invest cars. It becomes easy to purchase new cars due to car loans provided by banks. In order to fulfill rising demand the automobile industry has increased its production capacity. It has been observed that the domestic car engine technology lags years behind the world markets and that the people have not been allowed to have benefits of the new hybrid technology. The hybrid vehicles are more expensive than normal fuel vehicles. Usually, government organizations or companies for tax benefit buy these types of vehicles. Currently, about 102,000 units have been sold in the
most advanced countries like Japan, USA and a small number of units in Europe. In Pakistan, environmentally friendly engines, improved braking system, reducing noise,fitting collapsible steering wheels, safety steel bar in doors, over dash drive in special models and fuel conservation apparatus hardly are the concern of car manufacturers. Whereas ,in actual, Honda Civic offers ABS and Toyota Corolla 4-Wheel Disc brakes with stabilizer bars. Safety bars are available in almost all products ranging from 850cc Cuore to Civic and Corolla models. Moreover, Corolla offers Air Bags for added safety as well as Jam Protection door windows, while over drive has always been available in Corolla A/Ts. In the context of fuel conservation Honda offers V-Tec engine while Corolla is equipped with the latest fuel-efficient Twin-Cam engine with ECT. EFI engines by design are meant to be fuel-efficient. Toyota Corolla and Honda Civic have NVH dampening material inside the car which control noise and vibration ens ur in g a c omfort abl e dr iv e. It is also stated that the car manufacturers are neither providing any information on car performance nor giving any viable warranty in terms of mileage and time frame and after sale service. As for quoting on-Road prices in India, the Indian rupee has a different rate against the US $ and duties are different. Besides, the volume production is higher in India, 640,000 cars versus 40,000 in Pakistan. Therefore, a comparison of India and Pakistani prices should be made after adjusting the exchange rates and duty factors. Automobile industry has shown high progress from 2001-2007 and the government of Pakistan fixed a target of over half million units’ production by the year 2011-2012 that now seems impossible. The industry fell short to achieve the goals of productions in 2006-2007 when 1, 95,688 cars were manufactured against a target of 2, 26,620 units. However, the growth in
production was not up to the mark that year. In 2007-2008, the production declined to 1, 87,634 units against an estimated target of 2, 66,543 units. In the current fiscal year they said the production is expected to decline to 1, 50,107 units that are half the projected target of 3, 13,486 units. In spite of an additional levy of 5 per cent excise duty, the revenues from automobile sector would decline by over 25 per cent this year due to declining trend. The industry paid Rs.63 billion cumulative taxes that the government has levied on automobiles.
Automobile Industry and the Allied industries The automobile industry has also st r eng t hen ed many asso ci at ed industries and allied industries. It has not only provided jobs to a large number of people but has also contributed significantly to the national exchequer. The most prominent allied industries are as follows. 1-CNG (compressed natural gas stations) 2-Workshops 3-Tyre shops 4-Automobile parts shops
Impact on economy The car industry has invested over Rs 20 billion in the last four to five years to meet growing demand. The direct employment in car industry hovers between 5,500-6,000 persons. Motorcycle production hit the country’s record level of over 1.5 million units in 2010-2011 by the effort of Pervaiz Musharraf Government’s decision that opened bike market to low cost Chinese bikes. Auto sector now employs 192,000 people directly and around 1.2 million indirectly and has Rs 98 billion of investments and contributes Rs 63 billion as indirect tax in the national exchequer. Auto Sector remains the second largest payer of indirect taxes after the Petroleum Sector. In Pakistan's context there are 10 cars in 1,000 persons which is
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The development of the local car-manufacturing sector is a key element in the industrialization process. It must be remembered that the import of used cars as opposed to Complete Knock Down (CKD) parts would cause a major drain on Pakistan's foreign exchange and work towards retarding the overall growth of the engineering sector in Pakistan. one of the lowest in the emerging economies which itself speaks of high potential of growth in the auto sector and more so in the car production. Rising per capita income with changing demographic distribution and an anticipated influx of 30 to 40 million young people in the economically active workforce in the next few years provides a stimulus to the industry to expand and grow. (Source AUTOMARK Magazine) Government of Pakistan had undertaken two major initiatives in the form of National Trade Corridor Improvement Program (NTCIP) and Auto Industry Development Program (AIDP) for the development of the automotive industry in Pakistan. Engineering Development Board (EDB) is actively implementing the AIDP to increase the GDP contribution of the automotive sector to 5.6%, boost car production capacity to half a million units as well as attract an investment of US$ 3 billion and reach an auto export target of US$ 650 million. Automotive engineering is a driving force of large scale manufacturing, contributing US$ 3.6 billion to the national economy and engaging over 192,000 people in direct employment. The Auto parts manufacturing is $ 0.96 billion per annum. The demand for auto parts is highest in the motor cycle industry which is 60%, then is for cars which constitutes to 22% and the rest 18% is consumed by trucks, buses & tractors. This demand is met by Imports which caters 22% while the remaining 78% is supplied by the local manufacturers in the fiscal year 2007-2008. Due to the increase in demand for sophisticated machinery, the
government has allowed duty free import of raw material, sub components, components assemblies for manufacturers & assemblers. Total import bill of machinery stands at $2.195 billion in the fiscal year of 2007-08 which is 12.77% higher than that of the preceding year. The impressive growth in the machine tools and automation sector is directly proportional to the growth of the automotive industry which has become the fastest growing industry of Pakistan and contributes $3.6 billion annually to the country’s GDP. The aftermarket for spares has also witnessed immense expansion over the same period, with imported parts playing an important role in meeting local demand. The spare parts market is given further impetus by a total vehicle population of approximately 5.4 million. Pakistan has the second highest number of CNG-powered vehicles in the world with more than 1.55 million cars and passenger buses, constituting 24% of total vehicles in Pakistan with improved fuel efficiency and conforming to the latest environment regulations.
Contribution to the GDP Today the automotive industry annually contributes over Rs 30 billion to Pakistan's GDP and is also paying approximately Rs 8 billion per year in the form of taxes and thereby playing a pivotal role in the development of Pakistan's economy. Presently the auto industry has the capacity to produce 120,000 cars annually on a double shift basis. Car manufacturers in Pakistan over the last decade have contributed considerably towards employment generation. Car manufacturers in Pakistan and vendors
employ around 150,000 to 200,000, people directly and indirectly. The Original Equipment Manufacturers (OEMs) have also been instrumental for transfer of technology, value addition and manpower development. As a consequence of car manufacturing in Pakistan, a vibrant auto vendor industry has emerged that is now not only supplying parts to local OEMs like Toyota, Honda, Suzuki, Nissan, etc, but also exporting internationally. Auto-part exports are approximately $20 million per annum. Due to the deletion policy, cars manufactured by OEMs now consist 50% to over 70% local components depending on the model. Over the year vehicles manufacturing has been among the few industries that has continued to attract local and foreign investment even when the investment climate in the country has not been very favorable. The development of the local car-manufacturing sector is a key element in the industrialization process. It must be remembered that the import of used cars as opposed to Complete Knock Down (CKD) parts would cause a major drain on Pakistan's foreign exchange and work towards retarding the overall growth of the engineering sector in Pakistan. The auto manufacturers in Pakistan are playing a significant role in the exports of the country. From July 2001-March 2002 auto parts exports have been to the tune of $27 million. The deletion process is ongoing and every year a certain set number of locally manufactured car parts are incorporated. According to the deletion program car makers have to progressively increase quantum of locally made car parts till the
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CHONGQING The 11th China China International Motorcycle Trade Exhibition
The largest motorcycle exhibition in Asia in 2012, will be held on October 11-14, 2012 in Chongqing International Expo Center, China. The 11th China International Motorcycle Trade Exhibition (CIMAMotor 2012) will be the first event to be staged at the Chongqing International Expo Center after its completion.
About CIMAMotor --The largest motorcycle exhibition in Asia --The largest exhibition for commuter motorcycle in the world CIMAMotor has been held annually since 2002, and has become the world largest and the most important event f or commu ter motorcycles after 10-year continuous development. The output and sales of C hi n es e m ot o r cy cl es , accounting over 50% of the world, has been registered world No.1 for several consecutive years, and the export of motorcycles also hit the record of world No.1 for several consecutive years. Chongqing International Expo Center, with the usable area of 200,000 m2, and 16 ground level column free halls, provides state-ofthe-art facilities for the CIMAMotor. Moreover, an experience zone of more than 30,000 m2 consisting of off-road race, stunt show
and test riding is to be set up during CIMAMotor 2012. This activity created a new concept of motorcycle exhibition which turns static display into dynamic practi ce, enabling aud ience t o experience the famous motorcycles on site, thus connects the brand with the audience more efficiently. The development of Chinese economy and the spread of motorcycle culture in China bring new opportunities for foreign luxury motorcycle manufacturers. As the annual gathering and carnival for Chinese motorcyclists and fans, CIMAMotor is definitely the best channel for recreational motorcycles to enter into Chinese
market. CIMAMotor focuses on everything about motorcycles. After being fostered for several years, it has become a reliable promotion platform and strategic partner of the exhibitors. With profound understanding of the industry and an international perspective, we believe that after 30 years' rapid development, China motorcycle industry is getting ready for a great breakthrough which will bring vast market opportunities and challenges. CIMAMotor will help you deal with the challen ges and catch mo re op po rtuni ti es, and we hop e a breakthrough of your business will start from here. We sincerely wish the participants in CIMAMotor 2012 a p leasant and successful time in Chongqing. CIMAMotor has been held annually since 2002, and has become the world largest and the most i mp o rt an t e v e nt f o r commuter motorcycles after 10-year continuous development. The output and sales of Chi nese mot orcy cles, accounting over 50% of the world, has been registered world No.1 for several consecutive years, and the export of motorcycles also hit the record of world No.1
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In China, over 99% motorcycles are used as commuting tool, while the exported ones are mostly found in the 3rd world countries. The position and industrial situation of Chinese motorcycles ensures CIMAMotor as the most important international platform for brand displaying, product trade, technology transfer and information releasing, and the preferred show for manufacturers and buyers of commuter motorcycles. The development of Chinese economy and the spread of motorcycle culture in China bring new opportunities for foreign luxury motorcycle manufacturers. As the annual gathering and carnival for Chinese motorcyclists and fans, CIMAMotor is definitely the b es t c han n el f o r re cr e at i o na l motorcycles to enter into Chinese market. CIMAMotor focuses on everything about motorcycles. After being fostered for several years, it has become a reliable promotion platform and strategic partner of the exhibitors. With profound understanding of the industry and an international perspective, we believe that after 30 years' rapid development, China motorcycle industry is getting ready for a great breakthrough which will bring vast market opportunities and challenges. CIMAMotor will help you deal with the challen ges and cat ch mo re op po rtuni ti es, and we hop e a breakthrough of your business will start from here. More than 100,000 buyers and visitors from home and abroad are expected.
The Joining of Foreign Consultant to CIMAMotor To attract high involvement of more global luxurious brands, celebrities and motorcyclists, the organizer of CIMAMotor invited Mr. David A. Morris from Canada as its consultant for brand building and sponsorship development. As Editor-at-Large for Ultimate MotorCycling, a leading US motorcycle publication, and author of the book "MotoStars: Celebrities & Motorcycles", Mr. Morris has a wealth of experience in the motorcycle industry and brandbuilding. He has marketed the Daytona Beach Resort Area and Bike Week, the
world's largest motorcycle event with 500,000 visitors. He created advertising that took Nintendo from zero awareness to Number One game brand in the US. He led marketing teams for Kodak in Poland, Czech Republic, and Slovakia, achieving maximum awareness, market share and sales; and developed an integrated marketing/sales platform for 14 countries (Central Europe and Russia) supporting the SHELL HELIXFERRARI F1 sponsorship. For the CurtCo Robb Report luxury media group, he directed event marketing with Rolls-Royce; Rolex; UBS; and the Fort Lauderdale International Boat Show, the world's largest luxury yacht fair. According to the globalization strategy of CIMAMotor, the joining of Mr. David A. Morris is only a beginning. The organizer hopes to build CIMAMotor as the most important international platform for brand displaying, product trade, technology transfer, culture diffusion and information releasing, and the largest exhibition event including all kinds of concurrent activities, such as products d isplaying, racing, conference, and programs (riding activity, selection awards, forum, and public entertainment activities and etc). By combining motorcycle industry together with fashion, tourism, sports, and entertainment, the brand image and brand value of Chinese motorcycles can be upgraded greatly......
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Monthly AutoMark Magazine
Car Ijarah scheme - Update
SUZUKI FINANCE-MEEZAN BANK RESIDUAL VALUE FINANCING UPGRADE YOUR LIFESTYLE - THE RIBA FREE WAY Pak Suzuki Motors- the No.1 Automobile manufacturer and Meezan Bank- The Premier Islamic Bank in Pakistan joined hands to enable the Pakistani customer to own a Suzuki car through low monthly rentals compared to Normal monthly Rentals through Residual Value (RV) Car Ijarah scheme.
Not only this scheme provides a Shariah compliant solution to customer auto needs but also help him “Manage Affordability of car from monthly income and upgrade his Life style the Riba Free way.” The scheme offers an ideal opportunity for both individual and corporate
customers with benefits including: More affordable monthly rental payments under residual value scheme compared to normal scheme Ideal for corporate customers looking for off balance sheet asset & Expense related Tax Benefit
Concept: Example I: Affording a Car – Shift from 2 wheeler to 4 wheeler Normal Monthly Rental of Mehran VX (price: Rs.555,000/-) for 3 yrs at 20% security deposit is Rs.17,854/(including insurance). In case customer cannot afford monthly Rental of Rs.17,854/- from his monthly income. He has option of RV. In RV scheme; Bank offers customer minimum 5% to maximum 55% value of vehicle to defer / pay at end of lease. (For instance customer agrees to pay 55% of Mehran VX Value i.e. Rs.305,250/- at the end of 3 years Therefore; the monthly rental payment will come down to Rs.11,321/-(including insurance). Customer can save up to Rs. 6,533/- per month or Rs.235,188/- in 36 monthly rental payments. At end of Lease, customer has two options: 1) Pay RV amount (Rs.305,250/-) and retain vehicle; in most cases customer to sell at market value which will be high compared to Residual value (e.g. the market value of a reasonable 3 yr old Mehran VX Model is Rs.430,000/- +). Customer to pay bank RV amount and realize capital gain of around Rs.125,000/- (Rs.440,000/- less Rs.305,250/-). The customer may also utilize the capital gain amount of around Rs.125,000/- as security deposit for lease another new car. OR 2) Return vehicle to bank. CUSTOMER CAN INCREASE / DECREASE RESIDUAL VALUE AND /OR INCREASE / DECREASE SECURITY DEPOSIT TO DETERMINE THE MONTHLY RENTAL PAYMENT MOST SUITED TO HIS BUDGET
Example II: Upgrade to 1300cc Swift at a rent of a 1000cc Cultus Currently the customer is owning a Cultus and paying a monthly rental payment of Rs.29,318/-(including insurance) for 3 yrs at 25% security deposit. Customer wants to upgrade to Swift but cannot afford the Normal monthly rental payment for a Swift DX for 3 yrs at 20% security deposit = Rs.36,384/-(including insurance). However, if he only fixes Residual Value / defers 30% value of Swift DX (Price Rs.1131, 000/-) i.e. he will have to pay only Rs. 339,300/- at the end of 3 year period and retain ownership of vehicles; his monthly rental payment will match that of what he is paying for Cultus i.e. Rs.29, 122/-; including insurance. Other Benefits of Suzuki Finance Arrangement Program - Meezan Bank Residual Value Financing: Priority Delivery No upfront takaful (Islamic insurance) payments and no advance rent before delivery (unlike conventional financing) No upfront registration payment option available resulting in low security deposit. Low processing charges Free Tracker with Accidental Death Coverage
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Monthly AutoMark Magazine
Research Report - Continued
Cars broke down the difference between urban and rural society. The automobile brought the new tradition of the "Sunday drive," and many city folks got their first chance to tour the rural areas. Rural people, on the other hand, drove into cities to shop and to be entertained. maximum level is attained. Currently in small cars the deletion level is almost 75% and in larger cars it is close to 60%. A change in the shape has impact on the deletion program. A change in shape means an investment of anywhere from Rs 4-5 billion, which economically is not a viable proposition keeping in view low demand trend. Pakistan is an emerging market for automobiles and automotive parts, offers immense business and investment opportunities. The total contribution of Auto industry to GDP in 2007 is 2.8% which is likely to increase up to 5.6% in the next 5 years. Total gross sales of automobiles in Pakistan were Rs.214 billion or $2.67 billion in 2006-2007. The industry paid Rs.63 billion cumulative taxes in 2007-2008 that the gov ernmen t has lev i ed on automobiles. There are 500 auto-parts manufacturers in the country that supply parts to original equipment manufacturers (PAMA members). Auto sector presently, contributes 16% to the manufacturing sector which also is expected to increase 25% in the next 7 years, as compared to 6.7 percent during 2001-02.Vehicles’ manufacturers directly employ over 192,000 people with a total investment of over $ 1.5 billion. Currently, there are around 82 vehicles’ assemblers in the industry producing passengers cars, light commercial vehicles, trucks, buses, tractors and 2/3 wheelers. The auto policy is geared up to make an investment of $ 4.09 billion in the next five years thus, making a target of half a million cars per annum.
Impacts Of Automobile industry Automobiles have revolutionized our lives. It has helped in reaching at our destination in less time. But this invention has many impacts, some are positive and some are negative. Some of the impacts are given below. Impacts on Access and convenience
Worldwide the automobile has made easier access possible to remote places. However, average journey times to regularly visited areas have increased in large cities, especially in Latin America, as a result of widespread automobile adoption. This is due to traffic congestion and the increased distances between home and work brought about by urban expansion. Deaths in Road Accidents However the adverse effects of automobiles is in the form of accidents. Many people have lost their lives in these road accidents and a large number of people have become permanently paralysed in these accidents. Impacts on Economy The development of the automobile industry has contributed to shifts in employment distribution, shopping patterns, social interactions, manufacturing priorities and city planning; increased use of automobiles has decreased the roles of walking, horses and railroads. This development in automobile industry affected the economy in the following ways: 1. Promoted growth of other industries: Gave rise to the development of other allied industries for example. petroleum, rubber, and steel industries etc. 2. Helped fuel the creation of a national system of highways: Automobiles needed better roads. Therefore we have seen the development of long carpeted roads over the globe which is connecting almost all the parts of the world having population. 3.Created new service facilities: Filling stations, garages, and roadside restaurants jumped up across the nation. Motels catering to the needs of motorists started replacing hotels. Thus not only increasing the government revenue but also providing jobs to a number of unemployed people. Impacts on Infrastructure Besides industries, one of the most
visible effects the automobile has had on the world is the huge increase in the amount of surfaced and structured roads. For example, between 1921 and 1941, the United States spent US$40 billion on roads, increasing the amount of structured road from 387,000 miles (619,000 kilometers) to over 1,000,000 miles (1.6 million kilometers) which does not even take into account road widening. Impacts on Environment For much of the early history of the car, no attention was given to various environmental effects caused by the automobile. 1. Air and Noise Pollution: Automobiles are a main cause of air pollution and noise pollution. The manufacture and use of automobiles emits 20 to 25 percent of the carbon dioxide that cause global climate change. There are almost 600 million cars and light vehicles (excluding heavy trucks and buses) worldwide, The automobile adds significantly to noise pollution worldwide; in response to these impacts, an entire technology of noise barrier design and other noise mitigation has emerged. A typical car emits approximately 3.4 grams per mile of carbon monoxide. 2. Negative Effects on Wildlife: Increased road-building brought negative effects on habitat for wildlife, primarily through habitat fragmentation and surface run off alteration. New roads paved through sensitive habitat can cause the loss or degradation of ecosystems, and the materials required for roads come from large-scale rock quarrying and gravel extraction, which sometimes results in sensitive ecological areas. 3. Effecting the Water table: Road construction also affects the water table, increases surface runoff, and increases the risk of flooding. Impacts on Culture Prior to the advent of the automobile, horses, walking and streetcars were
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In Pakistan conventional machines are not able to meet the precision manufacturing and the available labor is not familiar with modern technology it caused by lack of coordination and linkages with Government/Semi Government Supporting Bodies and Technical Training Institutes. the major means of transportation within cities. Horses need a large amount of care, and were therefore kept in public facilities that were usually far from residences. The manure they excrete on the streets also cr eat ed a sani t at io n p ro blem. The automobile made regular medium-distance travel more easy and affordable, especially in areas with no railways. Because automobiles did not rest, and were faster than horsedrawn conveyances, people were regularly able to travel farther than in earlier times. The development of highways half a century later continued this revolution in mobility. Some experts are of the view that many of these changes started during the Golden age of the bicycle, the preceding era from 1880—1915. Impacts on Society 1. Created a more mobile society: Cars broke down the difference between urban and rural society. The automobile brought the new tradition of the "Sunday drive," and many city folks got their first chance to tour the rural areas. Rural people, on the other hand, drove into cities to shop and to be entertained. 2. Broke down the stability of family life: Now it is much easier for individual family members to go their own way. They are now less dependent on each other especially the women. 3. B ro ke do wn t ra d it ion a l morality: Children could be freed from parental supervision as cars became a sort of "bedroom on wheels." Now they can freely move on their own accord. 4. Changes to urban society: In the start of 1940s, most urban environments lost their streetcars, cable cars, and other forms of light rail, to be substituted by diesel-burning motor coaches or buses. Many of these have never returned, though some urban communities alternatively installed subways. Another change caused by the
automobile is that modern urban pedestrians must be more alert than their ancestors. In the past, a pedestrian had to come across relatively slow-moving streetcars or other obstacles of travel. With the multiplication of the automobile, a pedestrian has to anticipate safety risks of automobiles at high speeds because cars may cause serious damage to a human. 5. Advent of suburban society: Because of the automobile, the outward growth of cities increased, and the development of suburbs in automobile intensive cultures was accelerated.7 Until the start of the automobile, factory workers lived either close to the factory or in high density communities farther away, linked to the factory by street car or rail. The automobile and the federal subsidies for roads and suburban development that supported car culture made people to live in low density areas far from the city center and integrated city neighborhoods. 6. Car culture: The car had a significant influence on the culture of the middle class. Automobiles were incorporated into all fields of life from music to books to movies. Between 1905 and 1908, more than 120 songs were based on the automobile. Since the start of the automobile, car manufacturers and petroleum fuel suppliers successfully lobbied governments to build public roads. Road building was sometimes also affected by Keynesian-style political ideologies. In Europe, massive freeway building programs were started by a number of social democratic governments after World War II, in an attempt to create jobs and make the automobile available to the working classes.
SWOT Analysis Strengths: Increasing Demand for Cars: In Pakistan context there are 9 cars in 1,000 persons which is one of the
lowest in the emerging economies which it self speaks of high potential of growth in the auto sector and more so in the car production. Moreover rising per capita income over the years will also stimulate this demand. Resale of Local Assembled Cars: Resale of locally assembled cars is better due to availability of spare parts and after sales services and warranty e.g. Suzuki, Honda, Toyota are classic examples in this regard. Used imported cars have been selling below their cost at the showrooms but consumers are not inclined to buy because of their low re-sale value and problems in parts availability.
Quality of local cars: Initially when the import of cars was liberalized the quality of local assembled cars was unsatisfactory so the people of high income level group started buying imported cars and the sales of the local assembled cars started decreasing so the local assemblers started enhancing the quality of their vehicles so we can say that the quality of local cars is becoming the strength of the auto industry. Moreover the competition from the imported cars will also be a stimulus for the local assemblers to update their quality of cars. OEM: The local OEM of Pakistan is well equipped with enough advance technology and skilled labor to produce pa rts according to the desired quality of any foreign company. CNG Kit: The advantage of buying local assembled cars is that they comes with factory fitted CNG kits at the times when the prices of fuel rising at hi gher pace internationally. Mechanics: For local assembled cars mechanics are readily available in market and much cheaper so the buyer has not to worry about any problem that can occur in the car in long term whereas the availability for imported cars is a bigger issue for theowners and if
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Research Report - Continued
The automobiles are now the part and parcel of our lives without which its nearly impossible to survive. This sector has contributed to the national exchequer as well as increased the economic activities as well in the form of providing jobs to the people as we have discusses earlier and also gave rise to other allied industries. somehow they are able to find one then the mechanics charges much higher than actually i t shou ld be charged .
Weakness: Input Cost: In Pakistan as the inflation is increasing so as the input costs and for manufacturers it is becoming harder to produce at lower cost. Increasing cost of energy and its unreliable and inconsistent supply adds up the cost of manufacturing and wastage of resources. It is estimated that by the year 2012, auto industry consumption of electricity will cross 500 – 600 MW from around 250 - 300 MW, as of now. Protection level: Before the TBS was introduced t h e auto industry was well protected b y t h e government but now as the import of CKD and CBU is liberalized the protection level to industry by government is decreased. Lack of skilled manpower for modern machinery: In Pakistan conventional machines are not able to meet the precision manufacturing and the available labor is not familiar with modern technology it caused by lack of coordination and linkages with Government/Semi Government Supporting Bodies and T e chn i cal Tr ai n in g I n st i t u t es . Scarcity of raw material especially steel: Through previous years the world prices are rising and causing costly inputs and Pakistan has left with scarce Steel and Iron left , so manufacturers are facing difficulties in producing cars with low prices. Opportunities: Import German technology and skills: Pakistan-German automotive supply network is to be build, providing opp ortunities to Pakistani automotive vendor enterprises to benefit from the German know-how and technology to improve quality,productivity, developing and marketing of value-added products. Foreign Investment and setup production facilities:
China National Heavy Duty Truck Corporation (CNHDTC), one of the largest heavy duty truck manufacturers in China, has shown interest for investment in the auto mobile sector of Pakistan. Ethanol Fuel: As the fuel prices are rising in world Pakistan should switch to Ethanol Fuel as Brazil is using. Ethanol Fuel is produced by Molasses. Pakistan is one of the country which produces good quantity of molasses but the engines of the local cars do not support ethanol so Pakistan should acquire the Technology to produce ethanol compatible cars. In Brazil they use 90% Ethanol and 10% petroleum whereas Pakistani cars with default engines can afford only 3% Ethanol. Global spare part market: The annual gross sales turnover of the auto industry, at present, stands at Rs210billion while export of auto parts are estimated at $35 million. As such, the increase in production turnover is projected to increase by 185 per cent while the exports of auto parts would make quantum jump. Threats: WTO Regime: The auto industry is generally faced by multiplicity of taxes; the presumptive tax regime has led to increase in prices of imported inputs and the finished goods. Component manufacturers are struggling to compete with underinvoicing, miss declaration and smuggling. Import of used parts is still continuing at a large scale. Competition from import cars: Auto industry is facing a threat from the import of cars which is already liberalized further it is said that government will cut about 15% of duties till 2011. Fuel prices: According to the authorities the fuel prices which currently are currently high will see an upward surge in the days to come.
Conclusion Therefore we can conclude that the automobile sector has revolutionized
the life of common people. The automobiles are now the part and parcel of our lives without which its nearly impossible to survive. This sector has contributed to the national exchequer as well as increased the economic activities as well in the form of providing jobs to the people as we have discusses earlier and also gave rise to other allied industries. However t he automobile sector of Pakistan is lacking behind the automobile sector of the developed world in terms of the reliability of its products , competitive prices , safety concerns etc. Moreover the current energy crises has also hampered this industry as well . Due to this factor the government also losses its considerable chunk of revenue which it would have otherwise collected.
Bibliography 1. Kay, Jane, Asphalt Nation: how the automobile took over America, and how we can take it back, 1998 2. Gilbert, Alan, The mega-city in Latin America, 1996. 3. Jackson, Kenneth, Crabgrass Frontier: The Suburbanization of the United States, 1987. 4. Jakle, John, Sculle, Keith, Lots of Parking: Land Use in a Car Culture, 2004. 5. Strasser, Susan, Waste and Want: A Social History of Trash, 1999. 6. Smith, Robert, A Social History of the Bicycle, its Early Life and Times in America, 1972 . 7. Graves, Brown, From Highway to Superhighway: The Sustainability, Symbolism and Situated Practices of Car Culture, 1997.
Syndicate Adviser: Dr. Shagufta Zareen Members: Muhammad Naeem Arshad Abbasi Ghazala Nasir Romana Alam Naveed Akhtar Khurram Mangi Mahmood Alam Curtsey: Directorate General of Training & Research,FBR, Lahore.
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Report by Imtiaz Rastgar, External Expert, Engineering Sector CBI.
Monthly AutoMark Magazine
AUTOMECHANIKA 2012 FRANKFURT Pakistani companies return with rewards Automechanika 2012 closed its doors today after setting a new record of 4,593 exhibitors from 74 countries. Around 148,000 visitors from 174 countries (2010: 153,837, FKM certified) came to Frankfurt for the world’s leading trade fair for the automotive sector. Fourteen Pakistani companies have returned home with rich rewards from attending this, world’s largest, auto parts aftermarket trade fair . Companies which participated are : M/s. Adamjee Engineering Powder Metals Gears M/s. Darsons Industries Rubebr Hose for Engine M/s. Infinity Engineering Massy & Fiat Tractor Parts. M/s. Kortech Radiators for tractor & Genset engines M/s. M. A. Nawaz Bros Masey& Fiat Tractor Parts M/s. MGA Industries Mufflers and Hand Brakes M/s. Manan Shahid Forging Pulled out last minuet owing to internal problems M/s. Meralastic Rubber Rubber parts fir Car & Engines M/s. Precision Products Massy tractor parts M/s. Rastgar Engineering Truck & Trailer Wheel Hubs M/s.Risan Synthetic Technic Misc Plastic & Metal parts M/s. TeleTronix Vehicle Horns M/s. Thermosole Industries Expansion Tanks and Plastic Bottles for trucks M/s. Universal Piston Pistons for tractor engines Companies like Darson Industries, Meralastik, Kortech, MGA, Mannan Shahid, Rastgar Engineering and Thermosole are now fairly seasoned exporters and have diversified away from their narrow customer base as vendors of Pakistani OEMs. These companies appear more resistant to the
ups and downs of local market dynamics dictated by local OEMs and the used car lobbies, playing an interesting see-saw game within Pakistan . It was observed that Apps for iPhone and Android were in wide use by the Messe for Planning and the whole D irectory was av ailable in t he Automechanika12 App for iPhone as well as Android. The App was so good, there was little need for a regular directory to visit or navigate the A ut omechanika12. Per haps the organisers of PAPS 2013 may like to develop alight App of their own for the forthcoming trade fair in Karachi. E-Directories: Many initiatives were seen where database of supplier are being linked to consortiums of European distributors. Of particular interest were these companies in Hall 2, where two distribution consortiums were using a common Directory Services Provider, all displaying together in a row. ATR I n t e r n a t i o n al A G , G r o up A u t o International, Topmotive System GmbH (Directory / Database Builders for the previous two.) “Truck Competence “Automechnika 2012: Automechanika further promoted “Truck Competence” for companies e n g a g ed i n d ev e l o p m en t a n d manufacture of parts for Truck and Trailer OEs and for the Aftermarket. CBI / ECP participants Thermosole Industries and Rastgar Engineering were guided to be part of this program by the Local Expert. They made good use of this by displaying and promoting “Truck Competence” Sticker on their Stands and Stationery to their advantage. Many other Pakistani vendor companies who have experience of developing parts for Truck OEMs can
enter the European market with their own development and manufacturing capability under this lable. The Pakistan Stand was well managed by the Pakistan Embassy Staff headed by Frau Boulris and her team. Hospitality and translation help was ready at hand at all times. Most Pakistan Exhibitors were repeat exhibitors and have started depending on exports as an import part of their overall sales. As such they were well prepared and serious about this fair. Five of the fourteen participants had completed the CBI Export Coaching Program and also appear to be the leading auto parts exporters among the group. The training and preparedness of the CBI ECP participants was evident to the companies which are still not part of this program and may help them make up their minds to enter this program. Turkish Companies are coming very close to European standards in their quality and presentation and Pakistani exporters have a lot to learn from them. Turkish companies have now made export market based investments in the auto sector and are fast becoming an important player in the European Automotive supply chain. Our brotherly country, Bangladesh, also had a surprise for us in the automotive field. Globatt, a Bangladeshi battery brand, was displaying its strength in Hall 23. Globatt produce maintenancefree batteries for the world market, from a production facility created solely for exports. Globatt is now exported to 47 countries and sales are strong. Automechanika 2012 closed its doors after setting a new record of 4,593 exhibitors from 74 countries. Around 148,000 visitors from 174 countries (2010: 153,837, FKM certified) came to Frankfurt for the world’s leading trade fair for the automotive sector. “The aftermarket is booming and, despite the cur ren t econ omi c d i sru p t io ns , Automechanika has once again proved to be a reliable constant”, said Detlef Braun, Member of the Executive Board of Messe Frankfurt. “With an increase
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Automotive Sector - Update in the number of visitors from East Europe and Russia coupled with a decline in numbers from South Europe, Automechanika reflects the current situation in the world economy”, added Detlef Braun. This observation was underscored by Klaus Burger, President of the Federal Association of Manufacturers and Importers of Automobile Service Equipment (Bundesverband der Hersteller und Importeure von Automobil-Service Ausrüstungen ASA e.V.), who said, “Although visitors from South Europe had scarcity value, there was a very large number from Germany, the Benelux countries and East Europe.” As was to be expected, German exhibitors and visitors see the current economic climate in a more positive light than their colleagues from other nations. The results of the exhibitor poll indicate that the quality of visitors to the fair has risen further in comparison to Automechanika 2010. 70 percent of all exhibitors were satisfied to extremely satisfied with the quality of visitors to the fair compared to 64 percent at the last Automechanika. In particular, German exhibitors reported being able to make more new contacts than in 2010 (from 62 to 67 percent). Elke Benner, Divisional Manager, Automotive, Adolf Würth GmbH & Co. KG: “Thanks to the large proportion of CEOs and decision makers, we were able to hold good discussions and thus improve our customer relationships and contacts.” In terms of content, this year’s Automechanika, which covered 305,000 m² at the fully-booked-up Exhibition Centre, struck the right notes with three main themes: ‘Truck Competence’, e-mobility and basic and advanced training. “The idea of spotlighting ‘Truck Competence’ at the fair was a great success among both visitors and exhibitors because many of our body-repair shops and garages work on both cars and trucks. Promoting young people is also important for us and, with its workshops and training events, the fair was spot on in this respect, too. Both concepts are capable of expansion – and represent a significant additional benefit for visitors”, said Peter Börner, President of the German Federation of Body and AutomotiveEngineering......
Mr. Cor Dieleman, CBI Program Director inspecting working of a Pakistani Exporting Company.
A German visitor at a Pakistani Stand at Automechanika12 www.automark.pk | Oct-2012 | Page 47
Monthly AutoMark Magazine
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PAKISTANI BRAND MOTORCYCLES
70cc Motorcycle
Sr./ No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.
Product & Model Name Aan AI-70 Asia Hero AH-70 Bionic AS-70 Crown Lifan CRLF-70 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 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 Pak Hero PH-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. 43,000/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 42,500/= Rs. 44,800/= Rs. 41,500/= Rs. 42,500/=
Sr./ No. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44.
Product & Model Name 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 | Oct-2012 | Page 48
Retail Price 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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WITH CHINA MADE ENGINE
100cc Motorcycle No. 1. 2. 3. 4. 5. 6. 7.
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/=
125cc Motorcycle No. Brand & Model Name 1. Habib HB-125 2. Sitara ST-125 3. Super Star SS-125 4. Super Star SS-125 DLX 5. Hero RF-125 6. Honda CG-125 std Euro II 7. Honda CG-125 DX 8. Metro MR-125 9. 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/=
Suzuki Motorcycle Product & Sr./ Model Name No. 1. Suzuki Sprinter ECO 2. Suzuki Sprinter STD. 3. Suzuki GS-150
Retail Price Rs. 77,400/= Rs. 80,400/= Rs. 1,01500=
Chinese Motorcycles in Pakistan Pakistan is a large producer of small-displacement motorcycles but there is no thriving local development by motorcycle industries especially the Pak- Chinese motorcycle assemblers as they simply doing trading of Chinese motorcycle parts with their Chinese counter part instead to invite them for local manufacturing of crucial parts here in Pakistan. "The Pak-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 than the present cost of manufacture units 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� because of accessibility of smuggling of motorcycle spare parts particularly engines in ckd condition on massive scale from China through Sust Border and Afghan Transit Trade, a flood of commercially imported / smuggled Chinese parts in the parts markets for replacement which acutely never replaced but imported for assemblers and also imports by Vendors under SRO 655. 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. Over two million motorcycle assembling Pakistani companies should do the joint venture in public private partnership with their foreign counter part to manufacture the key parts of motorcycles such as the complete engine, carburetor, Drive Chain, hundreads of engine separate components.
www.automark.pk | Oct-2012 | Page 49
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