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Trucking sector of Pakistan auto industry rides high

Time will tell how the new Chinese players will grab the share from the already existing players in light and heavy commercial trucks but one

thing is certain the new players will definitely try to roll out latest engine technology as per European standards.

Economic conditions and import/export trade are considered as the life line for the production of light and heavy trucks as import and export

trade is the barometer of country’s economy

 

The heavy commercial vehicle scenario in Pakistan has surely witnessed drastic changes in the last few years. As many Chinese and foreign brands have tested their luck in the hot-blooded Pakistani market.

The new players are already dominated by Hinopak Motors, Ghandara Nissan, Ghandara Industries and Master Motors which cumulatively enjoy sizable market share. It can be said that the new players have proven themselves to enjoy the profit fairly.The aim to cut a slice from the old players’ share seems a gigantic task but the price difference may lure the price conscious people associated with goods’ carrier business.

After experiencing the Japanese joint venture, a number of seasoned and organized players in the auto assembling business are now with ink agreements Dysin working with leading Chinese truck makers (Sinotruk truck) and Ghandara Industries is working with Dongfeng trucks .Volvo also plans to unveil high quality trucks in Pakistan. One of the leading Japanese companies along with one Swedish heavy vehicle player are collaborating with Chinese DongFeng which is the world’s largest producer of heavy duty trucks. These workings together direct us to a pretty well road which surely is bright for Pakistan.

The expansion of the premises of MAN Diesel and Turbo Pakistan is owing to the increase of capacities to realize the sizeable maintenance contracts the company has undertaken. Furthermore, the premises are extended and customized in such way that MAN Truck and Bus can start its business in Pakistan and develop its sales and after sales services for the region, showcasing trucks, buses and high speed engines in Lahore.

In December 2015, Karakoram Motors signed a contract assembly agreement with M/s Dysin Automobiles Limited for the assembly of their 220 and 290 hp Prime Movers SINO TRUCKS of China.

All assembling arrangements are now completed and commercial production of these trucks will start in the first week of May  2016.

The plant initially assembled 300 units of Euro compliant trucks and prime movers of various categories and was scalable for production output as per market demand. The Joint Venture Agreement was signed by Quarter Master General which is also Officer Incharge NLC Lieutenant General Sajjad Ghani, Chairman HIT Lieutenant General Syed WajidHussain and Senior Vice President NORINCO Wang Lee, said an ISPR press release.

Some of the existing companies in Pakistan are Hinopak, Ghandara, Al-Haj Faw, Afzal Motors (Jac,King & Long van), PM Autos (Faw) Power brand light vehicle etc. Master Motors is a truck manufacturer based in Port Qasim, Karachi as a part of the Master Group of Industries.

Although the present transport system is not up to standards but it can be safely said that it has considerably improved compared to previous years. It is true that economy cannot grow without appropriate modernization of trucking sector. Worthy exports and imports travel on such low standards vehicles turning out to be a major risk.

Time will tell how the new Chinese players will grab the share from the already existing players in light and heavy commercial trucks but one thing is certain the new players will definitely try to roll out latest engine technology as per European standards.

Economic conditions and import/export trade are considered as the life line for the production of light and heavy trucks as import and export trade is the barometer of country’s economy.

The existing players had a nail biting experience from 2009-2010 onwards till 2012-2013. As per figures of Pakistan Automotive Manufacturers Association (PAMA), the overall sales of trucks plunged to 1,948 units in 2012-2013 from 2,394 units in 2011-2012, 2,942 units in 2010-2011 and 3,620 units in 2009-2010.

High truck prices of existing players can be blamed for low sales from 2009-2010 to 2012-2013 besides investors’ shift towards used trucks and Chinese light commercial vehicles.  Even investors in goods carrier businesses also lifted only 10,734 units of Suzuki Ravi in 2012-2013 as compared to 17,015 units in 2011-2012. Hyundai Shehzore (Korean made) remained out of production from 2011-2012 to 2012-2013.

However, the PAMA figures for July-October 2013-2014 proved a bit relief for the truck makers as Hino sales stood at 263 units followed by Nissan’s 95 units, Master’s 125 units and Isuzu’s 90 units as compared to 264 units of Hino, 61 units of Nissan, 99 units of Master and 98 units of Isuzu in July-October 2012-2013.

In light commercial segment, Suzuki Ravi’s sales rose to 3,692 units in July-October 2013-2014 as compared to 3,030 in same period last fiscal year. Buyers of Hyundai Shehzorereceiveda good news with start of its production from September 2013 with 150 units, swelling to 300 units in October 2013 and still increasing till date.

One of the leading local truck manufacturers was not satisfied as cheaper Chinese trucks wereposing serious challenge to costly and big truck assemblers while arrival of used trucks continued to haunt the local industry.

One reason was Pak Rupee’s devaluation against major currencies which pushed up the cost of import of parts and accessories thus pushing up cost of production in the last five years especially from July 2013 onwards when one Dollar was equal to Rs 98.50. The peak was when one Dollar was 108. Although the cost is still up as the current Dollar to PKR is 104.8 which still is a major reason for costs going up and competition to weaken.

Chinese truck and commercial vehicle assemblers can sustain the currency parity impact due to cheap parts’ quality and low price of Chinese parts and accessories. Not only the dollar rate but the rising oil prices have had a countable impact on the demand and production.

As the Japanese assemblers are worried over the current heavy vehicle situation, the existing Chinese and Korean investors and upcoming new players must also be alarmed. The import policy permits import of used dump trucks, spraying lorries, waste disposal trucks and prime movers etc which find their way into the market for use as normal trucks. Others avenues also exist for import of used vehicles  besides the baggage scheme for overseas Pakistanis which continue to be relaxed for heavy commercial vehicles with the age limit is five years and depreciation limit is two per cent.

Smuggled and under invoiced heavy vehicles are also available in the market. With the above negative conditions, the government has imposed sales tax at the standard rate on locally produced heavy vehicles which has further hit the market.

The assemblers under PAMA feel that the revival of heavy vehicle sector is not possible unless measures are taken to curb the import of used vehicles for which age limit of used trucks being imported under baggage schemes are brought down to three from five years besides cut in depreciation limit to one from two per cent. PAMA feels that there is a need to comprehensively review all the schemes and appropriately pruning the same in the light of their misuse.

The China Pak Economic corridor is going to enhance the heavy duty truck and busses sale. This is because the latest highway is going increase the demand for travelling and people would want to travel in much more luxury and a comfortable manner. It is a great opportunity for Pakistan to attain utmost benefit out of CPEC. The auto industry of Pakistan is surely going to increase if educated steps are taking by related authorities and stake holders. The latest truck launched by Hinopak named Kazay is a new step taken towards the evolution of heavy duty vehicles in Pakistan. It has been noted that the latest technology sales have increased and travelling has become much easier. Not only this heavy duty trucks will be needed to transport goods and services between the two country therefore latest technology trucks will be needed. PAMA has to create favorable policies so that the industry can boom and new investors can enter. With the entry of new manufacturers and assemblers the quality is going to increase and the prices are going to fall because of competition. The Chinese manufacturers which entered the industry have also given a tough time to the local ones which further has moved the auto sector one step ahead. Government should look up into this matter by giving further subsidies to local manufacturers so that the Pakistani heavy duty truck industry also sustains and can compete in the international market.

This exclusive article on commercial vehicles, published in Monthly AutoMark Magazine’s March-2016 edition.

#automotive #automark #magazine #march2016

Why Do We Have Leap Year?

Every leap year we welcome February 29 into our calendar – and with good reason. The humble leap day comes and goes every four years without much fuss – but it saves us a lot of trouble and is the one day women are encouraged to propose to their man.

Professor of Applied Physics at the University of Liverpool Ken Durose told the ECHO: “Leap years are a way to avoid a good deal of confusion – and some inconvenient party times.

“Without leap year we would only celebrate New Year on the stroke of midnight once every four years. The next year we’d have to celebrate at 6am, and after that at midday then the year after at tea time.

“I’ve spoken to some of the people in the lab and they weren’t too keen on having a 6am New Year ’s Eve, you’d run out of steam by then.”

We need an extra day every fourth February because a solar year is 365.25 days – not 365, so an extra day is added to keep the calendar and solar years in sync.

Without February 29 every four years the seasons would, in time, fall out of sync with the calendar.

Dr Steve Barrett from the Department of Physics at the University of Liverpool said: “If we adopt a calendar which is always exactly 365 days long then over a long period of time the calendar will slowly slip out of step with the Earth moving around the Sun. And so the seasons will occur at different times of the calendar year.

“After 100 years the seasons will have shifted by 25 days and after 400 years the shift will have amounted to 100 days. The middle of winter would then be in April and the middle of summer in October.

“To stop this happening we add a leap day into February in every fourth year. This year is exactly divisible by four and so 2016 is a leap year. This keeps the calendar in step with Earth’s motion and so the seasons come and go at the same time every year.” – Originally published on liverpoolecho.co.uk

Bike Assemblers Enjoying Famous Brands, Instead of Releasing Quality New Models

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

Luxury buses for intercity routes in Pakistan

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.

www.automark.pk

United Motorcycle – Becomes a Strong competitor for Karachi market

United Auto Industry is the 2nd 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.

 

124 BRANDS ARE PRODUCING SAME 70CC DECADES OLD MODEL IN PAKISTAN

Pakistan’s Motorcycle assemblers have a total installed capacity of 4 million motorcycles per annum but the production for the last two fiscal years has remained low at 1.7 million bikes per year.

Relatively a small country with population of 200 million, the country has 124 bike assemblers including three Japanese giants. In Pakistan Two Japanese assemblers Yamaha and Suzuki are not producing 70CC Bikes, but all other approx 122 assemblers are producing same CD-70 cc bike with only brand name change, these 122 brands are Bionic, Racer, Laser, Safari, Aan, Royal Star, Mehran, Honda, BML, Blue Star, Grace, Crown, Star, Eagle, Hero, Ravi, Habib, Raftar, King Hero, Leader, Super Star, Metro, Hunza, Moon Star, Super Powr, New Asia, Osaka, Pak Star, Sohrab, Hi Speed, Royal, Rohi, Diamond, Union Star, Jinan, Guangta, Star Asia, Geo, Supreme, Toyo, United, Zxmco, Guru, Tez Raftar, Saszgar, Super Asia, Unique, SKM, Ghani, Qingqui, Aiwa, Sakai, Shaheen, City Super, Unipak, Asia Hero, Super Speed, Treet, Buraq, Pal Style, Sonica, Master, Road Prince, Excel, Hawk, Aerolite, Sky Wing, Captain, Rockey, Super Shahbaz, Champion, Stahlco, ST-70, Jan Power, Challenger, Crown, King Rider, Josh, Laser, Long Life, Pak Hero, Super Hero, DHL, Hi-Deluxe, Shahcar, Rebon, Eagle Star, Sutlej, Lucky, Vicky, Shine Star, Gold Star, Hi-Metto, Fara, Imperial, Pak Speed, NXG, Stalion, Classic, Express, Jaguar, Metro, Elite, Akai, Royal Metro,  DYL Dhoom, My Hondo and Power.

The government is reported to have given go ahead signal to around 20 assemblers in the last two years without realizing that existing assemblers have failed in rolling out bikes as per their plant capacity.

Surprisingly, the previous governments gave permission to many assemblers whose annual installed capacity was ranging between 1,200-8,000 units.  It means that parties associated with other kind of business had invested in bike assembling business without having any technical expertise. As a result most of them had either closed down or slowed down their production due to intense competition, lowering profit margins and heavy production losses, but experts of motorcycle industry and marketing are also fail in bike assembling due to corrupt system of taxation and TBS by the government of Pakistan.

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.

Sources said the ministry of industries has compiled a data of number of bike assemblers in the country coupled with their products, installed capacity and their production during 2013-2014 and 2014-2015 to ascertain the actual situation. The Ministry is also searching as to how many units are now struggling for their survival.

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.

He said closure of units or slow down in production have already led to massive unemployment in the sector. Many of the units are on the verge of collapse while others are heading towards the dead end.

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.

Anticipating a big bike market in coming years, AHL has decided to invest $100 million.

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.

Memon Motors of Super Star bikes have the capacity to produce 126,500 units per annum but it assembled 75,181 units in 2013-2014 and 35,836 units in 2014-2015.

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.

Plum Qingqi Motors has a installed capacity of 100,000 units but it only produced 26,141 bikes in 2013-2014 and 30,155 units in 2014-2015.

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.

The difference in valuation of the import of motorcycle parts between commercial importers and assemblers – valuation for assemblers is mostly higher – is leading to an increase in the  smuggling of motorcycle parts from China, industry officials said.

Customs department increased valuation on motorcycle items or parts for local assemblers, which commercial importers import from China on lower valuations. Thus, smuggling increased manifold with 124 assemblers out of which 80 assemblers are active  in the country now using smuggled parts in the motorcycle assembling industry.

Commercial importers are those who import motorcycle parts for approximately 20 million motorcycles that are plying on the country’s roads. On the other hand, motorcycle assemblers import parts from China and then use them in the assembling industry.

Industry officials say the increase in smuggling is denting the national exchequer, and can possibly reach up to Rs5 billion on an annual basis. With the rise in valuation for assemblers, industry officials estimate that the cost of a Chinese assembled motorcycled has risen by Rs3,000 to Rs6,000. This is why motorcycle assemblers are now shielding themselves by using smuggled parts in assembling.

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. Branded Japanese motorcycle makers fill the remaining market share.

This exclusive article published in Monthly AutoMark Magazine’s December-2015 printed edition. Written by AM team

 

Al-Haj Faw Motors are expanding in Pakistan

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.

PAAPAM & CBI returned from AGRITECNICA 2015 with glorious export results

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.