Automark

Consumers eye cut in taxes and duties on cars in Budget FY21

Punjab has been taking the lead in opening various sectors including textile export oriented units and different trade and business as compared to Sindh in a bid to ease locked down.

Perhaps the cases of corona virus in Punjab have never been more alarming than Sindh. Experts attribute it low testing in densely populated province otherwise corona patients would have crossed Sindh.

Irrespective of this belief, Punjab also took an edge in opening the auto sector first while Sindh adopted a go slow approach and gave green signal after Punjab to auto players in Karachi to start their operations. Some assemblers informed Pakistan Stock Exchange on May 19 regarding opening of units while others intimated starting units from May 20, 2,020.

Industries in Punjab might have rolled out some vehicles and completed their pending works while units in Sindh had only few days left to gear up production which would come to an end for Eid holidays starting from May 22 to 27, 2,020. As Eid falls either on May 24 or 25, assemblers may call upon workers and staffers for working two days on overtime ahead of Eid if they are serious in assembling vehicles. Otherwise, the real production activities will kick start after Eid.

Prior to this, authorized showrooms of car assemblers in Karachi were allowed to resume their businesses from May 11 but few days after their start, the owners of showrooms were not happy over lack of response from the consumers towards fresh booking of cars.

Even the advance booking situation on opening of units on May 19 also remained almost same. A showroom owner said he had been receiving just basic inquiries but consumers are more specific whether prices would come down or not in Budget FY21.

He said news are swirling in the markets regarding cut in general sales tax and import duties on parts and accessories to give a breathing space in future for the industrial sector which had faced one of the worst periods of no sales and production in April till second week of May, 2,020 especially in Karachi.

He said people have set their eyes on the Budget 2020-2021 regarding price cut in cars and this expectation might have slowed down fresh booking further from the consumers.

The dealer claimed that even banks are not receiving sizable number of applications for auto loans at the moment.

He recalls hustle and bustle at the showrooms in previous years ahead of Eid when buyers preferred to have new car at any cost either by booking the vehicles months ahead to get timely delivery before Eid or paying “heavy on or premium money” on spot buying at showrooms. However, COVID-19 has taken away these kinds of trading activities.

Neither online booking is attracting buyers nor are customers visiting dealerships in larger numbers after easing the locked down, a dealer said after few days when showrooms were opened on May 11, 2,020.

Only workshop activities are gaining momentum which is understandable after two months of locked down.

By observing standard operating procedures (SoPs), the dealerships are neither calling their full staff nor taking vehicles for repairs in large numbers, he said.

Only corona virus and locked down cannot be blamed for slowdown in sales. Car sales have remained under pressure from July 2019 on wards after soaring prices by the assemblers on rupee-dollar parity, high incidence of import duties and local taxes, high interest rates etc.

The dealer said cut in interest rate to eight per cent from over 13 per cent may lure customers but so far buyers had yet to show any extra interest.

The only solution to bring out car segment from corona led crisis and to boost demand is to bring down imports duties and taxes coupled with removal of federal excise duty ranging from 2.5 per cent to 7.5 per cent depending on engine power in upcoming budget. These benefits would at least generate new demand besides resulting in higher revenue collection on rising sales volumes.

The need of the hour for the assemblers is also to negotiate with their principals to lower the prices of completely knocked down kits to bring down domestic prices, he said.

One should appreciate car assemblers and showroom owners for keeping strength of staffers and workers intact amid massive production losses. Even salaries have not been cut.

Indus Motor Company (IMC) has approved a short term interest free emergency loan to improve vendors’ liquidity in the current locked down period. The emergency loan will be disbursed in May. However, other assemblers have not come out with such help for the vendors so far.

However, Pakistan Association of Automotive Parts and Accessories Manufacturers Association (PAAPAM) had run a campaign in print media recently regarding government’s industrial support package announced by the government for small and medium enterprises (SME) sector in response to COVID-19.

PAAPAM said sadly, SME auto parts manufacturers or its workers cannot tap into the above packages as the banks are adamant and the utility companies are non-committed.
The Association had already warned off massive lay off of workers and inability of vendors to pay the salaries as well as cut in salaries.

PAAPAM has urged the government to enhance no collateral condition to Rs 10 million per month. The utility support package covers commercial connections but not industrial connections used by SMEs. PAAPAM asked the government to enhance load factor to 400kv connections to cover SME industries.

However, at IMC showrooms, people, who had booked Toyota Yaris on line or through advance booking at showrooms prior to locked down, are trying to get details of their delivery.

Those customers, who are booking vehicles right now, are getting delivery time of August, a dealer said.

By doing a good job for not showing exit doors to the employees during closure and no pay cut, Indus Motor Company (IMC) took the lead in giving a jerk to its customers by raising prices by Rs 110,000-500,000 amid no sales and production in April.

By following the suit, Honda Atlas Cars Limited (HACL) made price jump Rs 60,000-120,000 on negative exchange rate despite low transportation cost on account of persistent drop in diesel price and stability in exchange rate.

A new player – Hyndai Nishat – also raised prices of Porter H-100 models by Rs 50,000, citing weakening of Pak Rupee against international currencies especially US Dollar.
Many vendors are unhappy over the increase in car prices by the manufacturers when everything was shut down and no sales were recorded, terming it unjustified move on which the government or Competition Commission of Pakistan should take notice.

Assemblers made a clever move to raise prices ahead of Budget FY21 as any duty and tax cut in new budget would force assemblers to bring down prices.
Before officially opening their factories as per provincial governments order, sources in the markets said that some assemblers had already started their factories and were operating their units and shipping vehicles from production plant to other parts of the country.

A heavy vehicle assembler had been rolling out vehicles since April 24 and the staffers and workers had been marking their attendance regularly.
There are also reports that a Korean automobile manufacturer had been working in nights during locked down and kept the plants closed in daylight. Sources said that the company had actually been transferring its vehicles’ stocks to different parts of the country.

A Japanese assembler expressed surprise that assemblers in same vicinity were closed but the Korean assembler had been working without any fear, which was unjustified.
Another Chinese vehicle assembler was also working normally in the locked down.
The provincial government had not bothered to check whether the car units were following standard operating procedures or not.

However, the real picture of production and sales will arrive in May figures but dealers and assemblers said that May will end on a depressing note due to Eid holidays and late permission to open industries.

The July-June 2019-2020 will end with marked decline in car sales as July-April sales had already posted over 50 per cent drop.

by Awais Khan – This exclusive article has been published in #Automark printed edition of June-2020 in Pakistan

A meeting of the Cabinet Committee on Energy (CCOE) has approved in principle, the import of Euro-V compliant diesel and petrol products.

The meeting was held here on Thursday under the chairmanship of Federal Minister for Planning, Development and Special Initiatives.

The CCOE approved the proposals of the Ministry of Energy (Petroleum Division) to make imports of diesel and petrol compliant with Euro-V standard.

These products will have a reduced environmental impact due to lesser sulphur content as well as lower emissions.

This decision would help reduce the pollution levels, especially the smog problem faced in country’s plain areas in winters.

The Petroleum Division would also work with the inland refineries to make them compliant with the Euro-V standard by the end of this year.

The CCOE decided to set 1st of August 2020 as the deadline by which all the OMCs will be required to ensure import of Euro-V compliant petrol only.

The CCOE also agreed to make all imports of diesel compliant with Euro-V specification w.e.f. January 2021 based on availability of supplies.

The Ogra and OCAD would work together to work out a detailed mechanism in this regard.

The CCOE also approved the minimum efficiency benchmarks for captive power plants.

The Petroleum Division in its summary submitted proposals to set minimum efficiency benchmarks for captive power units whether in single cycle or combined cycle using natural gas as a primary fuel.

The CCOE approved the proposals with a direction that the effect of Covid-19 situation may also be taken into account, while setting the deadlines for modernization/upgradation of units.

The CCOE also took an overview of the possible supply and demand situation of electricity in Karachi and measures to address any shortfall in future.

The CCOE directed the Power Division to maintain regular liaison with K-Electric with regard to Karachi’s future power requirements.

The meeting was attended by Federal Minister for Information and Broadcasting Shibli Faraz, Minister for Energy Omar Ayub Khan, Minister for Railways Sheikh Rasheed, Minister for Maritime Affairs Ali Zaidi, Advisor Finance Hafeez Sheikh, SAPM on Petroleum Nadeem Babar, SAPM on Mineral Resources Shahzad Qasim, and officials of various divisions, the NEPRA, and the NTDC.

World Environment Day 2020 would be celebrated on Friday, June 5th, 2020 in Colombia. World Environment Day 2020: theme will be on “Biodiversity.” UN Environment Programme (UNEP) announced that Colombia will be hosting World Environment Day 2020 in partnership with Germany. The main focus of World Environment Day 2020 would be on Biodiversity.

World Environment Day 2020 is widely celebrated in more than 143 countries. It is popularly being called “People’s Day” to show their care and support for the Earth and their environment. Knowing the ways to protect the environment is really important, let us look in detail about the objectives, themes, and history of World Environment Day.

Objectives and History
World Environment Day (WED) is celebrated every year on 5 June. It is the ‘United Nations’ prime vehicle for encouraging awareness and action to protect our environment. World Environment Day has become a global platform for public outreach, with more than 143 countries participating annually. First organized in 1974, it has been a major campaign for environmental issues ranging from marine pollution, human overgrowth, and raising awareness about global warming, sustainable consumption, and wildlife crime.

World Environment Day can be celebrated in many ways; activities such as campaign clarification, sensitizing the locals about the growing environmental conditions and suggesting ways to prevent them, organizing plays, quizzes, tree plantations, lectures and kids poster competition, etc. are quite popular.

The theme of World Environment Day 2019: Beating Air Pollution
Every year, WED has a new theme that major corporations, non-governmental organizations, communities, governments and all over the world advocate for environmental causes.

The theme of World Environment Day 2019 was “Air Pollution”
Air pollution is increasing day by day and it seems complicated to control it. Nothing seems impossible with continuous and dedicated efforts being put up by people like us. We must come together to combat it. And for this, it is necessary to understand the different types of pollution, how it affects our health and the environment, how we could move towards improving the air around us, etc.

We cannot stop breathing but there is something we can do to improve the quality of the air we breathe. About 7 million people in the world die due to air pollution and 4 million people out of the 7 million are in the Asia-Pacific region.

Courtesy: https://www.themightyearth.com/world-environment-day-2020/

The recall includes 136,000 vehicles in the U.S. It’s part of a larger recall of fuel pumps made by parts supplier Denso.

Honda is recalling nearly 1.4 million vehicles worldwide because their fuel pumps could fail and cause engines to stall or lose power.

The recall includes 136,000 vehicles in the U.S. It’s part of a larger recall of fuel pumps made by parts supplier Denso.

Honda said in a statement Tuesday that it has no reports of crashes or injuries. Owners will get notification letters in late July. Dealers will replace the fuel pumps at no cost to owners.

The U.S. recall includes the 2018 and 2019 Honda Accord, Civic Hatchback, Civic Type R and HR-V as well as the 2019 Fit and 2019 and 2020 Insight. Also covered are the 2019 Acura RDX, RLX and RLX Sport Hybrid and the 2018 and 2019 NSX.

Polestar, the premium electric vehicle maker owned by China’s Geely, plans to open 20 showrooms in the mainland, as it prepares for delivery of its Polestar 2 electric sedans to compete with Tesla Inc’s locally made Model 3.

Polestar, which currently has only one showroom in Beijing, plans to have 20 in 17 Chinese cities, the automaker said in a statement on Wednesday. The Gothenburg, Sweden-based company is manufacturing cars in China’s eastern city of Taizhou.

Showroom strength is becoming an important differentiator for electric vehicle (EV) makers in the world’s biggest auto and EV market, as they line up model launches.

The automaker plans to export Polestar 2 sedans to Europe and the United States, and will open showrooms first in Shanghai and then expand to coastal Ningbo and southern Guangzhou. The showrooms will be mostly in shopping malls.

Reuters had reported Polestar’s China showroom network expansion plan on Tuesday, citing people familiar with the matter.

It’s also only front-wheel drive

In Japan where it used to be called Vitz until the new-gen model arrived, the Toyota Yaris lineup is ridiculously complex. We’ve counted nearly 20 different versions of the regular model, plus the performance GR model with its own set of three trim levels. The hot hatch comes with a turbocharged 1.6-liter engine developing 268 horsepower and 370 Newton-meters (273 pound-feet) of torque if you go for the RZ or RC model. These two are all-wheel drive and come with a six-speed manual gearbox as well as front and rear limited-slip differentials.

The full-fat GR Yaris model will be sold outside of Japan as well, but only the Land of the Rising Sun is getting the newly announced entry-level RS variant. It was previewed in concept guise at the Tokyo Auto Salon back in January where it was overshadowed by the actual performance version. While it may look virtually the same on the outside, there are some major changes underneath the skin.

For starters, the Toyota GR Yaris RS is front-wheel-drive only. Another major change is the switch from a three-pedal setup to a continuously variable transmission featuring what Toyota refers to as a 10-speed Sequential Shiftmatic paddle system providing “a manual-like experience.” It boasts the launch gear introduced a couple of years ago, making the transmission quicker at low speeds compared to a conventional CVT.

The GR Yaris RS also gets a three-cylinder unit, but it’s a smaller 1.5-liter naturally aspirated engine producing only 118 horsepower and 145 Nm (107 lb-ft). The only advantage this base version has over the actual hot hatches is the lower weight as it tips the scales at 1,130 kilograms (2,491 pounds). The midrange GR Yaris RC is 120 kg (265 lbs) heavier after adding the AWD-related hardware, while the range-topping GR Yaris RZ with its extra kit adds another 30 kg (66 lbs).

As a final note, it’s worth mentioning the GR Yaris sold in Europe is slightly less powerful than the turbocharged JDM-spec model, offering 257 hp and 360 Nm (266 lb-ft) or 11 hp and 10 Nm (7 lb-ft) less than its Japanese counterpart.

Source: Toyota

• Partnership marries Sony Pictures IP with Hyundai Motor’s leading technology and visually innovative design
• Hyundai Motor to offer substantial marketing support for upcoming Sony Pictures tentpoles featuring the automaker’s new models and technologies
• The companies will collaborate on a wide range of multi-platform content rooted in Sony Pictures IP

Dubai, May 31, 2020 – Hyundai Motor Company and Sony Pictures Entertainment today announced they have entered into a unique and unprecedented multi-picture promotional partnership that will feature the automaker’s new models and technologies in upcoming Sony Pictures productions. Under the deal Hyundai Motor will also offer substantial marketing support and the companies will collaborate on a wide range of ancillary content-creation.

The partnership will marry Sony Pictures IP with Hyundai Motor’s technology and designs, building on the cinematic quality of the studio’s big-screen fare and bringing to life the automaker’s human-centered future mobility vision dedicated to revitalizing cities and galvanizing urban air mobility. The partnership will offer a wide range of opportunities to leverage Sony Pictures IP for marketing content and immersive entertainment, collaborate on infrastructure and vehicular concepts for Sony Pictures movies, co-create virtual reality and gaming experiences, and co-produce events, among other opportunities.

Hyundai Motor’s new models and technologies will be featured in five upcoming Sony Pictures films including Uncharted (July 2021); the sequel to Spider-Man™: Far From Home (November 2021); the sequel to Spider-Man: Into the Spider-Verse (October 2022); and other tentpoles to be determined.

“This strategic partnership with Sony Pictures will allow customers to understand and experience our human-centered future mobility vision through innovative vehicles and technologies, illuminating a way forward for transforming how we move, interact, and design our lives for optimal benefits. We will offer various ways to inspire our customers and movie fans around the globe,” said Wonhong Cho, Executive Vice President and Chief Marketing Officer of Hyundai Motor.

“This deal embodies the true definition of the word partnership,” said Jeffrey Godsick, EVP of Global Partnerships and Brand Management, and Head of Location Based Entertainment at Sony Pictures Entertainment. “The deal has many layers, including substantial marketing support, but its real potential and impact come from groundbreaking content that we will develop together.”

At CES 2020, Hyundai Motor Company unveiled its innovative vision for urban mobility to help revitalize human-centered future cities. The three-pronged approach to realize the vision includes A) Urban Air Mobility (UAM), a new form of mobility utilizing air space to drastically reduce transit time B) Purpose Built Vehicle (PBV), an eco-friendly urban mobility device allowing customization for diverse lifestyles and C) Hub, a space for mobility transfer and community activities.

Courtesy: Hyundai Pakistan FB page

JW SEZ group have introduced the European brand SUVs in Pakistan. A Morris Garages (MG) car was previously owned by Quaid-e- Azam Muhammad Ali Jinnah.
The MG HS Model was spotted in Kalam, Sawat (Khyber Pakhtunkhwa). The SUV is being used for test drive, as per our sources.

Jawed Afridi, has share pictures of the variant on his social media pages.
These variant are imported from China in CBU condition. The bookings of SUV in CBU will commence from June 2020 in Pakistan. Company is willing to assemble these brand of variants in Pakistan by next year under Auto Policy.

The MG HS back in March, 2020 was named the ‘Car of the Year’ in Middle East by a panel which comprised of the region’s leading automotive experts. Following that title, MG HS was also awarded to be the ‘‘Best Sub-compact Crossover’.

The SUV will be giving a tough competition to the current market favorite Korean brands. MG HS has a 2.0L high efficiency turbo petrol engine and is proficient in creating a thrilling 231PS and maximum torque of 360NM. The front wheel has a comfortable and an intelligent ALL Wheel Drive (AWD) system.

It provides the top speed of 210 km/h and combines it seamlessly with the six-speed dual clutch transmission gearbox. It is equipped with Eco, Normal, comfort and Sports driving style – the sports style will have adrenaline rushing through you. It has a sports response system that will release the maximum torque for the best acceleration you have ever experienced.

MG HS will have European standard car features owing to its British roots. For instance, the car as a 10.1 inch touchscreen which can connect to Apple car play, Android Auto, GPs, Navigation in an instant. It has a premium audio system along with Air quality management system which purifies air in less than 3 minutes!
When it comes to safety, you can be assured of MG HS with a 5 Star Euro NCAP safety standards.

The SUV is also expected to be quite reasonably priced given the taxation benefits, hence further fueling up the competition against the Korean SUV in Pakistan. Sources confirmed to Automark.

About JW Auto Park
Their plant was launched in 2018 in November and they are the first Pakistani company which has a 50% partnership with a Chinese company which is Changsha Foton Vehicle Technology Co. Ltd. The venture Foton JW Auto Park (Pvt.) Ltd. is the biggest private venture of electric car manufacturing in Pakistan.

The Futon JW Auto Park will be inaugurated by Chinese President Xi Jinping in his visit to Pakistan in June. JW Auto is also going to sign the MOU with Morris Garages electric vehicles.

MG Motor UK Limited (MG Motor) is a British automotive company headquartered in Longbridge, Birmingham, England, and a subsidiary of SAIC Motor UK, which in turn is owned by the Shanghai-based Chinese state-owned automotive SAIC Motor.
The initial investment was 150 million by both companies and the joint venture established an assembly plant after receiving Greenfield status.

Both parties plan to further expand the plant capacity to 100,000 units per year with 100 acres of land to increase its product range in the future.

This will not bring jobs to local Pakistanis but also help push the economy upwards. A silver lining Pakistani Auto Industry desperately needs in the recent phase of recession.
JW has been the silent leader in the Auto Industry and quiet the newsmaker. In its plans for the next 5 years, Foton JW Auto Park also aims to become the leading commercial vehicle manufacturer in Pakistan.

With news like these coming they might not be too far from their goal.

The Indus Motor Company has decided to recommence its production plants and offices following the preventive measures that would stop the spread of Covid-19. The company informed the Pakistan Stock Exchange (PSX) in a notice on Tuesday.

The notice further said that the company would be resuming operation following the lockdown relaxation announced by the Sindh government.

As per our sources, the IMC higher management, dealers and Vendors met with the Government of Sindh at Commissioner Karachi’s office, where it was decided that they will start operation from May 19, 2020. The production of the vehicles will be start after EID holidays; says sources.

The notice said that the company would be enforcing the SOPs given by the government rigorously to ensure everyone’s safety. The Indus Motor Company (IMC) announced its closure on 23rd March following the government announced lockdown.

A memo was released in which they informed that the delivery of cars would be delayed, and due to the fluctuations of the FOREX index, the prices of products and vehicles are being revised.

Lastly, on 29th April, they announced a support package for the vendors. In this, they gave out short term liquidity emergency loan to the vendors so that they can get some liquidity in the lockdown period.

It has been reported that Honda Atlas will also be reopening from May 18, 2020, while their production will begin after Eid holidays.

Amongst all the industries in Pakistan, the Auto Industry has been hit hard. The already struggling industry has now to face further challenges in this year. We may start to see the effects of the lockdown as the industries reopen after a 3-month lockdown.

Due to difficult conditions resulting from the corona pandemic and measures taken to stem its spread, including event bans and travel restrictions that are regularly being extended, Messe Frankfurt and its customers, partners and supporting associations have agreed to postpone the Automechanika Frankfurt event that was originally scheduled to take place from 8 to 12 September 2020.

Automechanika Frankfurt, the international industry gathering for the automotive aftermarket, is being postponed until 14 to 18 September 2021 in response to local and global measures implemented to stop the spread of COVID 19. It simply would not have been possible for many of the exhibitors and visitors from over 180 countries to take part in the event under the conditions currently prevailing or those expected at that time. In agreement with exhibitors, representatives from industry, workshops and retail, associations and partners, Messe Frankfurt has rescheduled the event for autumn 2021.

Automechanika Frankfurt will then resume its biennial rotation – the event will now be taking place in odd-numbered years.

Detlef Braun, Member of the Executive Board of Messe Frankfurt, explains: “Our top priority is ensuring the health and safety of everyone – exhibitors and visitors alike – taking part in the event. With waves of the pandemic moving around the globe and many countries not expecting it to peak until the summer, I am certain that the decision to postpone Automechanika until September 2021 is the right one. Over the past two weeks in particular, we have been engaged in intensive discussions with our customers, partners and supporting associations, and they sent us a clear signal. By holding the event in 2021, we are responding to our customers’ wishes.”

Online training in autumn 2020

‘By and for automotive professionals’: A number of online events are planned for this autumn that focus on training and professional development for German workshops in particular. Automechanika is collaborating with various trade media organisations, influencers, multipliers and associations to plan these events.

• Press Release