Automark

The Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) has termed the decision to dissolve the Engineering Development Board (EDB) as a recipe for disaster for the country’s industry.

The above measure, if implemented, would gravely affect the industrialization targets set by Prime Minister Muhammad Nawaz Sharif and Finance Minister Muhammad Ishaq Dar, and set back the progress achieved by PML(N) government in the industrial base in general and auto industry development in particular.

Mashood Ali Khan, Chairman PAAPAM, flanked by former Chairmans Mr. Shariq Suhail, Mr. Munir K Bana and Mr. Aamir Allawal of the Association, expressed their shock on the discussion held in a recent meeting of the Cabinet Committee on Energy (CCoE) during which EDB was criticized for delaying approvals of CPEC power projects and supposedly involved in rampant corruption. This led to a directive from the Prime Minister to dissolve the organization since it was no longer able to serve any useful purpose

Interestingly, through an amendment made in the Finance Bill 2016-17, the requirement of EDB’s verification for availing duty exemption has already been removed for IPP projects above 25MW. Therefore, apparently,  the CCoE may have been wrongly briefed about ‘so called’ delay in processing of power project proposals by EDB. In fact, EDB’s role for processing cases of power projects over 25MW has been handed over to the Ministry of Water & Power. In the light of this scenario, the CCoE needs to review its uncalled for criticism and unjust position taken on EDB’s performance.

PAAPAM is a representative body of 400 auto parts manufacturers & vendors located all over Pakistan and provides direct & indirect employment to almost 3 million Pakistanis; it is also one of the largest “fully documented” sectors in the country. PAAPAM members have invested heavily for manufacture of automobile parts for global auto assemblers operating in Pakistan. Resultantly, localization of automobile components has touched a record high in the country with 55%~70% of parts used in passenger cars being manufactured locally

At a press briefing held at a local hotel in Karachi on 6^th July 2017, Chairman PAAPAM, Mashood Ali Khan said that the auto industry has been engaging with EDB ever since its inception in 1995. Over these 20 years, there has never been a single scandal of corruption or malpractice at the EDB. On the contrary, the organization has played a major role in nurturing the domestic auto industry and promoting the growth in localization of auto parts in Pakistan (and saving valuable foreign exchange for the country).

In 1995, hardly 10%~15% of parts for passenger cars were produced locally. Today this figure has touched 70%. Similar trends were witnessed in case of motorcycles, trucks, buses & tractors. The industry was able to achieve these milestones only due to diligent implementation of deletion programs and tariff based systems by the EDB

The areas for which EDB needs to be complimented include strict implementation of deletion programs in the 1990s, preparation of a WTO-compliant Tariff Based System & formulation of the first auto policy in 2007, ensuring continuous growth in localization of automobile components, diligently monitoring that locally produced parts are not  imported at concessionary rates of duty, revival of trucks/buses manufacturing by controlling smuggling/misdeclaration, preparation of the second auto policy in 2016 and efficient management of auto sector regulations (including SROs 655, 656 & 693)

Chairman PAAPAM pointed out that unfortunately, since 2010, the Government has failed to give due importance to EDB or the engineering sector. EDB operated without a CEO for almost 3 years between 2012~2015. Finally, once again, EDB is without a permanent CEO since March 2017. How can one expect any organization to remain functional without a full-time & competent Chief Executive Officer

Mashood commented that since 2010, the Government did not take any steps for building capacity of this institution to serve the engineering sector. Instead, EDB was kept under-staffed and under constant pressure to operate with limited resources

PAAPAM officials assured the Prime Minister that there is no merit in the corruption allegations being levelled against EDB officials. Our members can vouch that they have not experienced any instances of corruption at any level in EDB, although all of them have an ongoing working relationship with the organization ever since its inception

Therefore, it would be an unwise step for a pro-industry Government, led by Prime Minister Mian Muhammad Nawaz Sharif, to move towards dissolving an organization on the basis of hearsay spread by groups with vested interests. Instead, considering that Pakistan’s economy is at a take-off stage, it would be prudent to appoint a professional CEO at EDB and provide it with the necessary resources to ensure its role as a catalyst for growth of the domestic Engineering Industry.

PAAPAM Chairman particularly pointed out that the auto industry is  passing through a critical phase, where the industry has bounced back and new entrants have entered the field. EDB is fully geared to assist the new entrants in meeting the government’s auto policy framework and also monitor and report to the federal government on their achievements from time to time.

PAAPAM appealed to the Honorable Prime Minister that, inspite of his hectic schedule, he may kindly grant a hearing to the Association and allow them an opportunity of explaining and clarifying the grave issues involved, so that he may be fully apprised of the facts and figures. We assure the Prime Minister that, we have full faith in him that he will not take any decision which could be detrimental to the interest of this nation, specially without granting a hearing to all the affected parties.

We look forward to an earliest meeting with the Prime Minister.

Mashood Ali Khan, Chairman of the Pakistan Association of Auto Parts and Accessories Manufacturers (PAAPAM), met with the Chairman of Pakistan Industrial Development Corporation (PIDS), Iqbal Tabish, to discuss the extortionate prices of land in the Bin Qasim special economic zone. He mentioned about how automotive manufacturers are present in the region, but there are no auto part assemblers and manufacturers there. In addition to that, according to the NIP, Bin Qasim Association of Trade and Industry is to allocate 20-25 acres of land for Small and Medium Enterprises (SMEs) of the automotive industry, but due to the extremely high prices (of almost 18 Million Rupees), many SMEs cannot afford to make such high capital investments.
PAAPAM has urged the PIDC to reduce these land prices, so that new producers may come in and set up their manufacturing plants, while already-present assemblers can make use of the opportunity to make this zone an area where all functions of the auto industry are present. The PIDC Chairman has assured that the subject would be considered in the corporation’s next board meeting.
Additionally, PIDC has requested a proposal from the PAAPAM on how the association would like to run the Automotive Testing and Training Centre, which has been present as a ghost facility for a long time, having been left abandoned soon after construction. PIDC wishes that members of PAAPAM take ownership of the facility, and use it to improve the skill set of labor and quality of products associated with the automotive industry of the land.
by AutoMark Magazine

After a hiatus of almost two and half years, the economic co-ordination committee of the cabinet gave the go ahead to the automotive development policy 2016 – 21 in the month of March 2016. Now almost one year has been passed but no material / significant result or achievement can be seen after implementation of this policy on the horizon of automobile industry of Pakistan.

The Twenty Fourth meeting of the Auto Industry Development Committee was held on 13th April 2017 and its minutes were confirmed on May 05, 2017, by EDB, the issue discussed and decision made during this meeting is also indicate the incapability of new auto policy in delivering solutions for the challenges being faced by the automobile industry of Pakistan.

Primary objective of the policy was to bring new investment which could boost the competition among the players, resultantly consumer shall get due benefits.The Government was hopeful that new policy will attract the European Car maker. However definition of medium knocked – down unit – MKD was not included into the policy so leading European Cars maker i.e. Fiat, Audi and Volkswagen scrapped their plan to enter in this market. French Car makers Renault was the first to announce its plans to invest USD$100 million in Ghandhara Nissan Plant to bring its brand into the country’s market but reliable source disclosed that Renault has stopped all activities in relation to Pakistan ventures due to some unknown reasons.

Under automobile development policy 2016-21 the following applications were submitted for approval.

1. Request of M/s. Regal Automobile Industries Limited for Green Field Investment.
2. Request of M/s. Dewan Farooque Motors Ltd for Brown Field Investment.
3. Request of M/s. Al Haj Faw Motors (Pvt) Ltd for Green Field Investment.

M/s. Regal Automobiles Industries Ltd (RAIL) applied for the Greenfield Investment incentives under New Investment Policy of ADP 2016-21 for establishing auto assembly plant in Lahore for the production / assembly of light commercial vehicle (LCV’s) and Mini Van / Bus under Technology Transfer Agreement with DFSK Motor Co. Ltd, a subsidiary of Dongfeng Motors Corporation, China.

Further, it was informed that M/s. Tayyaba Motors (Pvt.) Limited, approached EDB claiming that their and M/s. RAIL’s principal is same i.e. DongfengSokon and DFSK, even their factory address and vehicles offered by both of them are physically same with the only difference of label / logo. The firm therefore claimed that M/s. Regal Automobile Industries Ltd., cannot avail the concessions of Greenfield Investment under ADP 2016-21. However, M/s. Regal Automobiles denied. The committees decide that both the firms shall provide information of design patents from their principals and other related information facilitating EDB to evaluate and decide, accordingly.

The Engineering Development Board (EDB) is the apex government body under Ministry of Industries & Production entrusted to strengthen engineering base in Pakistan. EDB focuses primarily on the development of engineering goods and services sector on modern lines enabling it to become technologically sound and globally integrated. On the other hand committee decision is purely of commercial nature. In my point view EDB is not capable to take such type of decision independently.

It was learnt by reliable source that ministry if industry is not convinced with the contention of DFML that their plant was operational beyond the cutoff date of July 2013, exactly DFML plant was operational during September 2013 to February 2014. So the approval for brown field investment category cannot given. It is only possible through amendment in the policy, since it is mentioned in the policy that it can only be reviewed after two years, while it is only in its first year of implementation so ministry could not support any change in the policy.

The request of M/s. Al Haj Faw Motors for the green field category was also turned down with the same reason. Furthermore some more new companies are establishing their assembly plants and some only announced their intention to enter in automobile assembly business under ADP 2016-21, keeping in view the disputed case of DFML and RAIL, we feel that responsibilities of EDB are increased.

Procedure for approval under ADP 2016-21 may be strengthen. Stringent documentation for application process may be adopted. Questions / details of commercial nature may be asked by the new entrant. It may be noted that RAIL assembly plant is near completion and DFML has already imported CKD kits for Shahzore assembly from Dehan Laos. It seems that both companies could not start their assembly operations due to these confusions / delays.

According to our information one of the new entrant from Lahore is planning to assemble Chinese Alto which is the carbon copy of Pakistani Suzuki Mehran. We feel that its application shall also be challenged by Pak Suzuki Motors on the same ground and reasons, claimed by Tayyaba Motors in case of RAIL application.

In view of the above scenario we suggest that EDB may call an emergent meeting of AIDC also request to State Bank, SECP, Trade Mark Authorities, Intellectual Property Organization of Pakistanetcetc for the participation in this meeting. This meeting should have one point agenda i.e to chalk out detailed and foolproof procedure for the approval of application under ADP 2016-21 for the new investment in automobile sector.

This exclusive article, published in Monthly AutoMark Magazine’s June-2017 printed edition
by Anwar Iqbal

Scooty…A word that has become one of the “buzz words” in Pakistan. Scooty in Pakistani market does not merely refer to a 2-wheeled vehicle but also possesses an empowering perception of its own. Scooties are especially meant for female transportation and with this initiative of commercialization of scooties, an invisible barrier of societal pressure on females would be broken. Although this perception is a taboo for many since there are women drivers in Pakistan who drive cars, even for a living. Nevertheless, with such an initiative, women of Pakistan would feel more empowered and equivalent to men.

Students, teachers and young professional are already much fond of this new initiative and are supporting this cause that would empower the female population of Pakistan. With the development of society, females are getting education on same grounds as men and marking their roles towards the betterment of Pakistan. Whether its education, health, welfare or social sector, women are striving hard to make themselves empowered. One of the biggest advantages that will happen on the society would be shift of male mentality, if such a movement penetrates.

There are different countries around the globe that have commercialized scooties for their female population. Even our neighboring country India has passed anti-harassment law for women who travel via public transports or on scooties. But will the same conditions be applicable in Pakistan?

It has become a disputed topic of what future does the scooty really hold? Majority of the female population belonging to the urban areas of Pakistan believe that it is a good alternative vehicle introduction for those who can’t really handle the hassle of a car. Many of the people also think that the effects of introduction of scooty in the society would be inappropriate and misleading.

Having viewed the statistics, I think that scooty DOES NOT hold a bright future for the long run until few changes are done on the roads of Pakistan. Having said that, the major factor that justifies this eerie statement as stated above is bad road conditions. Let alone rural but the roads of the urban areas of Pakistan are poorly structured which leads to many accidents daily. Although, the introduction of scooty would be a positive step towards facilitating 51% of the population BUT the roads need to be smooth, clean and safe for the common people, not just for the localities of DHA or other elite housing societies.

Having said that, I come forward with my second factor, that is safety. Belonging to the state of Pakistan, the mentality of men here has come out to be more dominant. To compete and excel in this technological era, boys and girls are brought up in the same environment but with different social values. Hence, the acceptance in this society by men to allow their homely females on the roads would be a tad bit unacceptable. This again takes my ground on the fact that our culture has many barriers that although our religion does not impose but is imposed by this culture that we belong to.

Within this culture, a third factor resides within that relates with the psychological state of mind of the people from this culture.  The human mind in general holds the property of differentiating between the good and the bad yet becoming biased, at times. This means that people of this culture majorly have strong roots and circulate the same among their younger generations. Hence, unacceptability/ intolerance to this new wave of culture will take time to settle. This opposition would be strong in the rural areas of Pakistan whereas the urban areas might accept it partially. The commercialization would although be a chain-breaking movement by the automobile industry for the female population but it is the mindset that needs rectification primarily.

by Zeenat Anjum, A.M Development, Ghandhara Nissan Limited.

Contact: [email protected]

About the writer:

The author is an engineer by profession but writes out of passion. She is a striving young MBA graduate who has an entrepreneurial venture of her own. Apart from that, she trains young individuals and “youth” about the digital world and its relation with tech industry. The author has her own personal blogs and you can view some of her write-ups on LinkedIn.

Yamaha has come Pakistan to test itself for second time. But there is a major difference in both situations. In first case Dawood group and Yamaha were jointly manufacturing and marketing the Yamaha motorcycles. But second chance is a better option for Yamaha. Yamaha Pakistan is single entity and has full control of steering of the car. Moreover, it has been also heard that the Government of Pakistan has supported Yamaha Pakistan well for their re-entry to Pakistan.

Now while I am writing this article, decent time has been gone, since the launch of Yamaha Bikes in Pakistan. So, let’s discuss whatsapp there.

Yamaha YBR-125 VS Honda CG-125:

Yamaha YBR-125’s one on one competitor is Honda CG-125. Now, do you think that this competition was won by YBR? Taking views of users, CG-125 can’t be compared with YBR-125 due to its pick-up, sound, easy handling (due to size), price, resale, spare parts & service availability. Above all, the huge network all over Pakistan. After all this, let me share a simple & short story. Many riders went to YBR as it was dashing bike in looks and was a good change in the market. Above all, it was Yamaha Brand name. Ultimately, this movement of riders resulted in betterment in sales graph.

One more factor which played important role is that as it was new thing, so no one had experience of riding YBR, so all of them assumed that it will be a better option in all respects.

Then we noticed the upward graph of accessories sellers. Do you know why? The users of YBR were feeling the lack of something that was an important part of their riding life i.e., the thrilling sound of Honda CG-125. Though they did changes to YBR bikes in order to fill their thirst but the bike, even with many additions was unable to meet the target. So, we witnessed many used Yamaha YBRs on sale at local markets and also online. This is one important reason that Atlas Honda has seen very good sales of heir CG-125 model in recent times.

Bike priced @ PKR.1,30,000/- but still incomplete:

The Yamaha YBR & YBR-G have been priced at highest level in 125cc category of Pakistani market. With this price it should have been a bike with EVERYTHING. But Engine Off button that was available in 1990 model Kawasaki GTO 110 & 125, 2008 model Piaggio Storm 125, 2006-17 Suzuki GS 150 is absent in Yamaha YBR. Pass-On light option is available in 2008-12 Piaggio Storm, 2015-17 Suzuki GD-110 but absent in Yamaha YBR.

YBR is believed to be a sporty design street bike in Pakistan but they did not offer a real sporty fuel tank cap. Whereas 2008-12 model Piaggio Storm has offered this in Pakistan.

Product should justify price:

Famous 150cc bike of Japanese brand is between PKR.135000 to PKR.140000. This bike is liked because of its biggest Pakistani made engine, giant looks, comfortable ride and brand name. This is GS-150 from Suzuki. A very famous and favorite bike that has turned into a cult, a 125cc bike of a Japanese brand is between PKR 105000 to PKR 110000. This very famous machine is known for its acceleration (aka Pick-Up), DurDur sound, easy handling, good resale, 3S country wide facility and brand name. This is CG-125 from Honda. Honda CG-125 has highest sales in its category, so we can say that it is justifying the price well. Moreover, once a bike has crossed One Lack mark, it must have guts to justify this Price Tag.

Considering both above, how one would justify YBR-125 (125cc) from Yamaha at price range of PKR.1,25,000 to PKR.1,30,000?

Did Yamaha Pakistan brought new techniques of business in Pakistan?

Can 70cc/100cc class thinking handle such products? Sometimes, the teams who have been working in a specific environment and with a specific style cannot change themselves easily. As per our information, the Yamaha Pakistan team has many members that have worked for Dawood Yamaha. As they have been managing Yamaha Royale 100cc for many years and then DYL 70cc bikes for quite some time, so it might be difficult for them to adjust themselves as per requirements of an international model(s).

What do you want? Conversation between Mr. CG, Mr. GS and Mr. YBR:

Mr. CG: Hello

Mr. GS: Nice to see you

Mr. YBR: Hello all, thanks for welcome

Mr. CG: What is your price Tag?

Mr. YBR: Around PKR.1,30,000

Mr. GS: I think you are 125cc

Mr. YBR: Yes, why?

Mr. GS: I am 150cc and priced at PKR.1,35,000

Mr. YBR: Mr. CG, why are you silent? What is your price?

Mr. CG: I am just wondering about you. What do you want? If you don’t know me well, then I must tell you that I am top selling Brand of Pakistan in 125cc category, infact I challenge Mr. GS(which is 150cc) too and feel proud because in most of times I am the winner. I am best in Power To Weight Ratio, my parts are available all over Pakistan at reasonable rates, mechanics play with me, riders enjoy with me. Though I am small in size but easy to handle, rider can do many stunts using a CG-125.

Mr. GS: I must tell you Mr. YBR, I am biggest bike of Pakistan with biggest engine, comfortable seat and suspension and I am here since 2006. Please tell us why are you here and what do you want?

Mr. YBR: Dear both let me be very clear. Actually I am here to compete with Mr. CG as both of us are from same category i.e., 125cc. I can say I want to defeat Mr. CG.

Considering my legacy, Yamaha Pakistan team priced me at PKR.1,30,000. They might have a belief that I could defeat Mr. CG. I am not the top selling brand here and don’t have even second highest sales but Yamaha Pakistan team might have thought that I can defeat you Mr. CG. Neither I can challenge GS nor I am good at Power to weight ratio, but Yamaha Pakistan team priced me at PKR.1,30,000.

I am beautiful, I am good looking, I am hot, I have alloy rims, disc brake, fuel gauge, and gear indicator. And I know both of you lack these facilities. Yamaha Pakistan team might have thought that these qualities would be enough to justify my price. Yamaha Pakistan team might have in mind that today, the customer wants these things, you know show-off.

Mr. GS: Oh really, I didn’t know that. I will talk to Pak Suzuki Team about all this. Bye guys.

Mr. CG: Considering everything you have, considering all models your company will bring against me alone, I want to make one thing clear that I am not a bike today, I have become a cult. You might feel good for the time being with the help of your brothers (YBR-G 125 & YB125Z) but ultimately I will rule. If you want to defeat me, you will have to capture the mind & heart of Pakistani customer who loves my sound and enjoys the Pick-Up I offer. I am not a bike only, I am a culture today.

Technically speaking, Yamaha can offer economical pricing options? Yes because of few things, I believe. Those few items that are common in their three models. Copying views of riders from different cities, I would share that the Engine, Chassis, Rear Cowling, Meter, etc are common in three models (YBR, YBR-G, YB125Z). Fuel tank, seat, handle grips etc are common in YBR and YBR-G. So, economies of scale philosophy should help Yamaha to offer better prices. This will really help Yamaha.

Lesson Learnt:

Now, considering all what has happened so far, has Yamaha learnt any lesson? It must be visible in their new project of YB125Z.

Let me quote a simple example of Mr. X@LHR. A boy Mr. X@LHR was impressed by Yamaha YBR-125 because of it’s stylish designing, so purchased the YBR after selling his CG-125. As the bike was new, he completed Running Period carefully. But, his feelings were pushing him for something. So, he changed the silencer with one that could give more sound. Later, when running period was complete, he started riding his bike faster. At that particular time, he was able to use the YBR at higher speed. But soon he realized that after buying a bike of around PKR.1,30,000 and then spending PKR.15,000 to PKR.20,000 on it, his thirst of riding a powerful two wheeler is still there. He tried his best to compromise but he could not, so he went out to the market and sold his YBR-125. And yes, he had to face bigger loss than he faced in case of CG-125. Mr. X@LHR sold a bike (CG-125) of around PKR.1,00,000 plus and invested around PKR.1,50,000 (or little less) for a new bike (YBR-125), but his thirst was filled by his first choice(CG-125).

Mr. X@LHRcould not be attracted by the features YBR has. Moreover, he spend PKR.50,000 more on YBR-125 to satisfy his heart but could not.

Has Yamaha Pakistan Team learnt something from past? Are the sales figures of Honda CG-125 coming down and YBR-125 going up? Do try to find out.

The lesson learnt is clear from the launch of YB125Z by Yamaha at a price of PKR.1,15,000 (which is again more than CG-125).

When a bike with alloy rims, disc brake, sporty style, Yamaha brand name could not find success against CG-125 (Honda), then has someone tried to find the main cause (of problem faced)? I being a rider and considering views of riders from all over Pakistan must share that there are few issues that need to be reconsidered. I know that it will be difficult to make changes for enhanced and faster acceleration but price can be an option to discuss for better results. I think Yamaha Pakistan Team can take YBR-125 as case study for expecting better results from YB125Z.

Exclusive article for Monthly AutoMark Magazine, published in May-2017 printed edition

Written by: Mr. Muhammad Zahid Iqbal Malik, Founder & Head of Safe Riding – Road Safety Dept. of Pakistan Bikers Club (Since 2007)