Automark

Tough competition starts in Auto Sector cars and motorcycles specially in Karachi city after the re-launch of Pakistan’s second biggest brand “UNITED” said Chairman Association of Pakistan Motorcycle Assemblers, Muhammad Sabir Shaikh, UNIQUE & SUPER POWER brands also working hard for the better position of sales in Karachi City. The more important point is that if we check the registration data of excise and taxation department Sindh, the registration of two wheelers in the month of Jan- 2016 is the highest figure in the history of Pakistan. In cars TOYOTA & HONDA’s sales are also highest in the country in the month of Jan.-2016. Delivery period of cars for booking is 04 to 05 months, for current delivery the dealers are charging highest own money in the history of Pakistan.

The second important issue in the Auto Sector is the policy matter, Sabir Shaikh also added that the alarming feature in the auto sector is the length of time that the problem has been pending, having been under discussion since 2006-07. This is similar to many other policy decisions that we have investigated in the auto sector: the AIDP, the valuation issue, smuggling, standards and export clearances have all been under discussion for years, with an inability of the government to take swift, decisive action. Some of this has to do with coordination between government departments, in this case the Ministry of Commerce and FBR. Other times it has to do with the limited capacity of the government, which comes under pressure from various interest groups who have an incentive to maintain the status quo. These include not just industry stakeholders but also customs and clearance officials. Developing a capacity to set and implement standards is crucial both for consumer protection and for industrial development.

Two Japanese bike assemblers have introduced special schemes to entice customers, while the third one, a market leader, has increased the price and its dealers are demanding premium for immediate delivery as demand outstrips supply by a big margin. Suzuki and Yamaha are offering free bike registration to buyers but those who aspire to own Honda CG-125cc had to pay over and above already higher price.

A random market survey at Akbar Road, the hub of new and used bikes, revealed that authorised dealers of Atlas Honda Limited (AHL) do not have CG-125 model even for display at their showrooms. However, some dealers while assuring buyers that the 125cc model will be available for spot delivery, were demanding an additional Rs 3,000-4,000 as ‘on money’. The dealers said CG-125 is in short supply while the demand is high.

These dealers are also readily booking for CG-125, assuring buyers of deliver after 15 days. The dealers claim the situation is same in interior Sindh and Punjab for the popular Honda model. However, the same dealers of Honda were seen offering discount of Rs500 on the retail price on other Honda models.

Chairman Association of Pakistan Motor Cycle Assemblers (APMA), Mohammad Sabir Shaikh said AHL had raised the price of CG-125 by Rs 1,000 from November 2015 to Rs 103,900 while the prices of other Honda bikes remained the same due to competition with Chinese assemblers.

Interestingly most bike assemblers have kept the prices unchanged despite one per cent increase in import duty on parts from December 1, 2015 under the Mini Budget.

Shaikh said due to depressed sales, Pak Suzuki Motor Company Limited and the maker of Yamaha bikes are selling the bikes without taking any registration fee which ranges between Rs.4,000-5,000 per bike. These assemblers have kept the retail prices unchanged so far.

The maker of Yamaha bikes has been offering free registration from December 25 and the scheme would in the end of January 2016.

“Chinese bike assemblers too have not passed on the impact of 1pc hike in import duty to buyers owing to tight market conditions,” said Shaikh. He added that only AHL sales were going strong while two other Japanese bike assemblers were facing problems.

AHL had been producing over 70,000 units per month since Oct 2015. During July-Nov, the company sold 328,763 units as compared to 247,149 units in the same period last year. AHL sales in 2014-15 rose to 653,193 units as compared to 639,499 units in 2013-14.

According to figures of Engineering Development Board – EDB, sales of Suzuki bikes had plunged to 7,080 units in July-November 2015 as compared to 9,265 units in the corresponding period 2014. Suzuki sales in 2014-15 dropped to 22,703 units from 24,356 units in 2013-14. Yamaha arrived in the Pakistani market in July 2015 and went on to sell 7,601 units in July-Nov 2015.

Pakistan’s Motorcycle assemblers have a total installed capacity of 4 million motorcycles per annum, the production for the last two fiscal years has reached to 1.7 million bikes per year, some assemblers are in a precarious position owing to which they are failing to pay the outstanding amount on received parts for production from their vendors.

Consumers have failed to get any benefit from the huge lot of assemblers as they have been producing more than three decades old 70cc models mainly and due to competition they are decreasing the quality of products.

Chairman Association of Pakistan Motorcycle Assemblers (APMA) Mohammad Sabir Shaikh said around 13 units in Karachi and Hyderabad have closed down or stopped production followed by same situation with around 26 units in Punjab, three in Khyber Pakhtunkhaw and two in Azad Jammu Kashmir. He said there was no need to allow more bike assemblers as most of the existing Chinese assemblers are already facing stiff competition and only 10 units are enjoying relatively good sales as compared to their competitors.

Atlas Honda Limited (AHL) has the installed capacity of 750,000 units per annum and despite its higher price than Chinese bike, the company produced 639,506 units in 2013-2014 and 653,193 units in 2014-2015.

Assemblers are producing lower number of bikes as per their installed capacity. The second highest bike producer is Lahore based United Auto Industries of United Bikes whose yearly installed capacity is 288,000 units while it assembled 215,897 in 2013-2014 and 230,837 in 2014-2015.

N .J. Auto Industries (maker of Super Power bikes) produced 114,158 units in 2013-2014 as compared to 124,250 units in 2014-2015 as against its annual installed capacity of 205,000 units.

The maker of Road Prince Bikes Omega Industries of Lahore made 134,612 units in 2014-2015 as compared to 117,108 units in 2013-2014 while its installed capacity is 150,000 units per annum.

D.S. Motors Hyderabad, maker of Unique bike, produced 115,731 units in 2014-2015 as compared to 107,619 units in 2013-2014 as against its installed capacity of 157,000 units per year.

In order to revive the production of closed units, Sabir said the current government has to fix sale and production quota of every assembler keeping in view last five years production and sales. Otherwise the government must close approval of new units for assembling 70cc bikes.

If the government did not experiment the above, the industry would fail to produce quality two wheelers. Atlas Honda despite being its high price and producing same 70cc as Chinese are producing is enjoying good sales due to high quality.

Pakistan produces around 1.6 to 1.7 million motorcycles every year (since last 5 years) out of which 1 million units are assembled with Chinese technology. Three Japanese motorcycle makers fill the remaining market share.

The imported used cars sales in the end of 2015 and in the month of January 2016 is also very notable. These 660 cc imported cars are famous in big cites of Pakistan due to good fuel consumption. The low prices of petroleum products are also the reason for good market of new, used cars and bikes.

This exclusive article published in Monthly AutoMark Magazine’s February-2016 printed edition

Imagine travelling in a bus where you can’t find a proper place to sit, where your head hits the roof and you sweat because the air conditions don’t work properly. Yes, a major proportion of Pakistani population faces such issues and the rest lucky ones are unaware of them. The intercity transport system of the country is not up to the standards. Transport system which takes passenger from one place to another within a city is not even worth for a comment.

Although the intercity is not up to mark but continuous efforts are done by investors to revolutionize the system with introducing latest models buses with highly advanced technological features along with damaging the environment least.Previously it was only Daewoo as the only assembler of luxury buses in Pakistan and it enjoyed being the only one for a long time.

Lately the number of assemblers has increased three including Hino and Master to the list. Master entered the market in 2002 and improved the played a significant role in improving the transport system. With selling more than 10,000 vehicles it gave them a good image which further helped them having contracts with other local transporters to purchase buses from them. The luxury buses offered by Master are no less than a comfort zone.

Hinopak also figured the increasing demand in safe and comfortable travelling, therefore came up with their luxury busses too. Recently Hinopak introduced their new product Kazay, which is witnessing good response and the sales are expected to increase in future too.

With all this we come to the fact that passengers are willing to pay a higher price if they are given better services. It is noted that if the travelling is safe and secure along with good atmosphere and hygienic food, the intercity transport industry is going to account for a major proportion for the country’s income.

Daewoo was not cooperating before as they were still making profits because of their established image and also people somehow had no other option. It is highly needed that people get deserved comfort level for the amount they pay. With pressure from different group it was seen that Daewoo introduced their new luxury bus BH120 which received a very good response.

The authorized distributor of Volvo in Pakistan also launched their new ultimate luxury bus tagged B11R. The latest B11R is highly fuel efficient which reduces the cost along with less carbon emission which means it has fewer negative impacts. VPL is surely going to set new, higher and better intercity travelling. Daewoo Express, the biggest bus operator of the country has booked 10 B11R which are expected to hit the streets in the mid of March.

Using latest and luxury buses is not only going to increase the profits of the bus operators but also many people who tend to use their own cars for travelling just because the services are not up to standards will also start using the services, which is going to help using less scarce oil resources and have a healthy environment because of low carbon emission.

This exclusive article written by M. Hanif Memon, published in Monthly AutoMark Magazine’s February-2016 printed edition.

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United Auto Industry is the 2^nd largest brand in the market, are becoming a strong competitor for Karachi market. In presence of already established brands in local market United has launched its special modified model of 70cc which is getting popular in dealer and buyers.

With an increase in local production and subsequent drop in prices, two-wheelers are becoming a preferred mode of transportation for people who have suffered the most amid the fast deteriorating public transport system.

What’s special attached to the Karachi buyers is that the company gives a one year warranty on every motorcycle regardless of the mileage of the bike. While other motorcycle assemblers offer 6 months or 6000 km warranty, whichever comes first.

United Auto Industry had already started to win this page, dealers and customers have shown very high interest in the bike and offers. In a very short span of time, since launching of the bike last month in Karachi, they have sold a very good number of motorcycles with customer’s confidence.

Company has already established 30 service centers to facilitate and provide utmost customer service and satisfaction. United Auto Industry understands the needs of the market and they work accordingly. Keeping prices lower along with making parts available everywhere will make them win the market. Not to forget the quality should not be compromised as scrap material is not preferred by anyone.

United Auto Industry currently has production capacity of 360,000 units per annum and is planning to increase its production too. With a deep range of product offering the company has seen good response. Currently the company has an offering of in total 8 products which include 150cc auto cargo loader, US 125cc Euro 2, united US 100cc, united US 70cc, 70cc motorcycle for disable person, 100cc motorcycle loader, 200cc auto rickshaw and last but not the least 100cc motorcycle rickshaw.

First Automobile Works is a global contributor in the automotive industry with a 50 year history of innovation. The company FAW was established in 1953 and the name was changed to China FAW Group Corporation in 1992.

It has been noticed that FAW has recently started doing great in the Pakistani market. Automobile market of Pakistan is very complex and it is not easy for a new investor to compete against the current established players of the market. Along with local production done, the market is also filled with imported cars which further increase the competition.

Al-Haj FAW Motors was incorporated in July 2006 and launched first product in October 2006. Started with two variants of heavy duty trucks. They had signed a distribution license agreement with FAW in July 2006, which allowed them to import, distribute and sell FAW products in Pakistan.

The joint venture between FAW group, China and Al-Haj group Pakistan, the automaker was able to launch their successful 1.3 L hatchback. FAW V2 is a good car with all the basic and some additional features which surely are lacking in our local cars. It is safe to say that the car is better than Suzuki Cultus, Suzuki Wagon R and even Toyota Passo.

Receiving positive response Al-Haj FAW has finally decided to inject 600 million into their plant. The investment is focused for a new paint shop, extended warehouse facilities and modern assembly line. As per plan and government policy company keep on the way of localization of the parts and now they are ahead to bring CKD’s for the other vehicles which are now import CBU condition.

In the past, when Chinese automakers came to Pakistan, they unfortunately partnered with weak groups or those who did not have a long term plan. This is what left a bad image on Chinese vehicles. It is not necessarily about the product being inferior in quality; it is just the image that created problems. But after bad experiences, Chinese companies are now smarter in picking partners.

3S dealership is where Al-Haj FAW management thinks that they are different from others and they can overcome that image in the public of being a Chinese firm. There core remains 3S dealership. In the beginning their sales suffered, but by sticking to their policy of 3S network, the results have started to bear fruits.

Although this particular automotive group faced a lot of difficulties by the government along with the current position of Pakistani automotive world, still the group has delivered progress and is consistent with it. Many out there think that the group is just producing V2 due to the intense publicity done but the group has heavy and light vehicles both in the menu. The group under light vehicles has FAW Carrier which is 1000cc with a standard grade price of PKR 724,000; the automaker has V2 which is a 1300cc vehicle with a price tag of PKR 1,050,000; then comes FAW XPV which is again a 1000cc vehicle with a price tag of PKR 875,000 and Sirius S80 1.5L and 1.3L with PKR 1,885,000 and PKR 1,705,000 respectively.

The automaker has many different offerings in the heavy duty vehicles which include J5M 220 HP 4×2, J5M 280 HP 6×4, J5P 330HP 6×4, J5P 420HP 6×4 and FAW Tiger V. FAW Tiger V was recently launched in Pakistan and success is on its way.

The company started its operation here in Pakistan with 7 acres land and now is proud to have an operating land of 27 acres. While talking to the Marketing Manager, Farhan Hafiz, he informed that the automaker is planning to introduce new passenger models in the year 2019. The introduction of newer models can be a turning point in the automobile industry of Pakistan if measures are taken properly and quality is continued to be provided.

Results Give Confidence to Pakistani Participants

Hannover, Germany: AGRITECHNICA – The world’s largest trade fair for agricultural machinery and equipment ended with good prospects for the Pakistani manufacturers of tractor parts and agricultural machinery.

Thanks to CBI, the Dutch Government’s department forpreparing Pakistani Engineering Sector Companies for EU market entry with CBI’s Export Coaching Programmes
Ambitious entrepreneurs in Pakistan were prepared through CBI’s Export Coaching Programme(ECP) to
• Adapt their company and products to EU market requirements and standards;
• Become familiar with EU markets and business practice;
• Develop an export marketing strategy;
• Export to the EU market;
• Consolidate export position in the EU.

With good home work and preparation carried out under the guidance of CBI Experts, five Pakistani Companies exhibited their products at Agritechnica 2015. To help these companies with their export efforts and give on the spot guidance, CBI Experts Imtiaz Rastgar and Jan Oude Elferink were present at the CBI Stand. AMI Gears, GMS Forging (Pvt) Ltd., Landi Engine Work (Pvt) Ltd., Mehran Commercial Enterprises, Power Vision and Quality Vision
Innovations in agricultural machinery and equipment and the latest solutions and concepts for the future of plant production are presented every two years at AGRITECHNICA in Hanover, Germany.

TDAP STAND AT AGRITECHNICA 2015
The importance of this fair has been realised by Pakistani manufacturers of Agri tractor parts. Somehow the other opportunities which Agritechnica offers are still out of sight of Pakistani industry.
Most of the Pakistani participants at the TDAP Stand displayed focused product lines. Several were previous CBI ECP participants, while the effect of CBI training workshops could be observed on others.
SPEL displayed an expanded product line which has gone beyond Steering Wheels to modern looking steering columns. They have made a lose collaboration with a Czech hydraulic pump manufacturer, whose pumps are used to power steering systems.
Kortech was resent with Mr. Usman Malik, who was seen busy with his aftermarket customers from UK,Ireland and Europe.
MGA industries was present with there usual products.
Infinity Engineering, Mr. Razzaq Gohar was displaying parts for MF and CNH Agri tractors.
SB Gears displayed their line of gears for Agri Tractors.
Darsons was present with their rubber products.
AgriPak , Dr. Saqib). http://www.agripak.com.pk/showed posters of their line of backhoe, diggers, planters and a range of small tractors. This company is already exporting tractors and farm machinery and intend to display actual machines at the EIMA next year.
According the Senior Vice Chairman, PAAPAM Mr. Mashood Ali Khan who attended the exhibition as a CBI ECP participant, most of Pakistani exhibitors received good response and had leads from buyers across Europe , inspire of the fact that there were exhibitors from many other countries like China, India, Italy and Turkey displaying similar products.
This year Trade Development Authority of Pakistan (TDAP) had play it’s role well for the AGRITECHNICA from the stand booking till the end of event.
Pakistan Association of Automotive Parts & Accessories (PAAPAM) in cooperation with CBI, is providing in-house facilities for the technical training and skill development of the members companies with a reasonable cost at its Skill Development Centres at Karachi and Lahore. Exporting Skills are being imparted at PSDC for preparing Pakistani manufacturers for for export markets. During training participants are coached and mentored by Experts to make them stable exporters and lead their companies to export led growth.
Well trained experts are available for other coaching program, during whole year at above locations. Any PAAPAM member company can participate in the training and attend the workshops and other seminars organised by PSDC.
AGRITECHNICA is the innovations forum for the entire agricultural sector. The leading technologies and new developments shown make the exhibition a unique information platform helping to solve all problems encountered in farming and questions related to agricultural equipment and machinery.
Known as the melting pot where people, technology, and innovation come together Agritechnica spans seven days and is spread over 23 halls. Held in Hanover, Germany, this biennial event draws 2,800 exhibitors and more than 400,000 visitors from 88 countries.
One of the goals of this event is to take a futuristic look at innovations that have the potential to impact agricultural practices in the not-so-distant future.
In the Smart Farming exhibition area, attendees will have the opportunity to rate the ideas presented at Digital Cropping. Farmers are asked to give their opinion on whether a development is viable enough to prove itself in day-to-day farm work. Does it reduce the number of passes or operations? Does it make life easier? Does it save critical resources?
Fourteen exhibitors showcasing soil sensors, satellite signals, soil sampling, prognosis models, yield mapping, field mapping, application maps, yield potential maps, soil maps, drones and crop sensors will be critiqued by farmers.
AGRITECHNICA will be held again from 12 to 18 November 2017 and Senior Vice Chairman Mashood ALi Khan hope that during these two years the Private Sector SME companies will prepare themselves to Export Marketing Plan as well as training on Cultural Sensitiveness needed for export sales, Buyer Behavior, This regional Trade Fair for sub contracting and networking will prepare the group participants for their entry to European trade Fairs.
Senior Vice Chairman Mashood Ali Khan also invited European and Turkish Tractors OEMs to come and join our PAPS 2016, Pakistan have potential to invest and make your brands here.