Automark Magazine - September 2010

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Government - IMF talksTrade, industry circles opposefurther borrowing

Editorial

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The Magazine for Pakistan Automotive Sector

September 2010 Vol 3, Issue 9

Editor :

Sub Editor :

Contribution Writers :

Advisor :

Circulation Manager :

Designed By :

M. Hanif Memon

Dr. Raja Irfan Sabir

Mohammad Owais KhanSamiullah KhanShahzad Tabish

J. PereiraAbdul Majeed Sheikh

Abdul Khaliq

Mustafa Hanif

MONTHLY

Trade and industry circles have expressed dismayover the outcome of Pakistan's negotiations withInternational Monetary Fund (IMF) and WorldBank and termed it extremely hopeless.Industrialists, Business groups and associationsof different Trade and Industries saying saidthat this is not the time to further burden thenation with another loan as Pakistan is not ina position to pay off huge loans, already piledup by history's biggest natural catastrophe whichhas not only displaced over 25 million people,but also incurred monetary losses to the tuneof billion of dollars.

"Pakistan needs grants and moratorium onprecious loans as the exchequer is not in positionto pay off huge loans amounting to about $54billion over the years". Demanded of thegovernment to categorically express its inabilityto pay the debts and demand all loans to bewritten off.

The industry leader said that government shouldsimply convey its decision to the world thatPakistan is in dire strait, and rehabilitation ofthe IDPs and covering losses of destroyed cropswill take months if not years and the nationalexchequer can not afford huge debt servicing."The loans acquired or given to the previousgovernments were not spent on developmentor in national interest but mostly usurped bycorrupt rulers. This happened due to absence ofa monitoring system by donors and thus, nationis not liable to pay these loans.The country could not be able to bear anyadditional burden of taxes and the simplest andeasiest way to come out of this mammoth crisisis to seek writing-off of loans from the donors....


The Monthly Magazine for Pakistan Automotive Sector

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CONTENTS

Chinese bike makers expect level playing 9-10 field from new EDB CEOIExclusive Article on Motorcycle sector

SME of Pakistan Confers Membership on Imtiaz Rastgar 11

Mir Hazar Khan Bijarani visits Hinopak 12Corporate event at Hinopak

Car sales in August as compared to July 13-14Exclusive Article in Car sector

Auto vendors seek enforcement of development plan 15

ABS (Anti-lock Braking System) 25Exclusive Article by by Omar Rashdi

An Exclusive Report on Lubricants 27-28by Automark team (from previous issue)

Thar Coal Gasification Project shelved 35

Hero Honda - News 42

Corporate Event at Thal Engineering 45

Pakistan needs low-priced cars 46-47Exclusive Article by Automark

Local assembled car price list 43

Used car prices 44

The common man’s 70cc of recent times 48-49An Exclusive Article by Shahzad Tabish from NED

Motorcycle price list 50-51

www.automark.pk


11AUTOMARK | September-2010

The Chartered Institute of Logistics andTransport (CILT) Pakistan, whose headquarter is based at London, UK held its19th AnnualJ. Pereira, Deputy General Manager,Customer Services and Training of theProduct Support Division of HinopakMotors Limited was elected unopposedMember of the Counci l ExecutiveCommittee of the Chartered Institute ofLogistics and Transport, Pakistan (RoadTransport Sector) for the year 2010-2011.Brig. (Retd) S.S.A. Qasim, HonorarySecretary General of the CharteredInstitute of Logistics and Transport,Pakistan whilst presenting his AnnualReport to the Members of the CILT,thanked Hinopak Motors Limited and

other private sector organizations forsupporting the CILT. Brig. (Retd) S.S.A.Qasim appreciated the contribution ofPereira in various activities of the CILT.On June 11, 2010 a special meeting ofthe Council Executive Committee heldat the PIA Training Centre during whichPereira was also elected Member of theEducation and Training Sub Committee.J. Pereira is a Life, Chartered Memberof the CILT and is also a member of theCILT faculty, where he gives lectures onTranspor tation Man agement. Hedelivers lectures at the Diploma Coursein Logistics and Transport and theDiploma Course in Supply ChainManagement (SCM) and covers all thefour modes of transportation namelyAir, Rail, Road and Sea. These courses

are held at the PIATraining Centre nearthe Star Gate, OldKar achi Air p or tTerminal. Pereira isalso the Member oft h e S t a n d i n gC o mm i tt e e o nScience, Technologyan d Te chnica l Education of theFederation of Pakistan Chambers ofCommerce and Industry (FPCCI).He is a Member of the CatholicBu si nessme n an d Profe ss iona lsAssociation (CBPA) and Head of theTechnical Education Committee (TEC)of the CBPA, which recently organizeda programme on Career Counseling forthe youth of Karachi....

J. Pereira elected by CILT

In recognition of his services to the causeof the engineering profession as welladvancements in the manufacture ofengineered products in Pakistan, theSociety of Mechanical Engineersconferred Honorary Membership of theSociety on Imtiaz Rastgar, ex CEO ofthe Engineering Development Board.Mechanical Engineering plays a vitalrole in almost every field of life rangingfrom power generation to health care.One finds mechanical engineeringplaying vital role in running of fields asdiverse as software firms, heavyelectrical goods manufacturing, financialinstitutions, defense installations, oiland gas development an d so on.This is because of wide applicability ofknowledge, which is intrinsic to the fieldof mechanical engineering. For the samevery reason, Mechanical Engineeringhas been called the “Mother of allEngineering Science’s.The Society of Mechanical Engineers ofPakistan is formed with the aim ofproviding a platform to the MechanicalEngineers in Pakistan. According tosome estimates there are more than17000 mechanical engineers activelyinvolved in various fields ranging frommanufacturing to services.A need to unite the mechanical engineers

serving in Pakistan was long felt thiswas needed to increase professional’scompetence, introduce standardizations,improve quality of education, providebetter gr owth op portuni ties f ormechanical engineering professionaland above all provide the mechanicalengineers serving in all of their diverseareas of interests a platform so theirvoice can be heard. With these expressed

and declared ai ms. The Society ofMechanical Engineers of Pakistan(SMEP) was formed.Imtiaz Rastgar has served on theGoverning Bodies of several technicaluniversities in Pakistan as well as aDirector on eminent engineering sectorenterprises. - PR

Society of Mechanical Engineers of PakistanConfers Membership

on Imtiaz Rastgar

Corporate Events - Update



Recently Mir Hazar Khan Bijarani,Federal Minister for Industries &Production visits Hinopak MotorsLimited. The agenda of his visit was todiscuss the automobile industry ofPakistan in general. During the meetingValue Added Tax (VAT), Governmentpolicies & future pla ns for thebetterment of industry and productionsector, issues on import of used vehiclesand other related issues were discussed.Speaking on the occasion, the FederalMinister briefed that the Governmentof Pakistan recognizes the role of theautomobile industry of Pakistan as amajor growth driver and its contributionfor the economy of Pakistan and willsupport this industry to enable it todevelop and play an important roleglobally. He told that today he observedthe modern manufacturing facilities ofHinopak and was highly impressed tosee the state of the art processes and in-house manuf actur ing pr ocesses.Mr. Kunwar Idris, Chairman, Hinopak

thanked the federal Minister for his visitto Hinopak. He expressed his views thatHinopak strongly believes that this visitwill provide new opportunities that willhelp to meet the challenges being facedby the local industries.On this occasion Mr. Hideya Iijima,Managing Director & CEO, Hinopak saidthat however the industry had declinedin sales due to unfavorable economicconditions till the end of last year. Headded that it is heartening that due toaggressive government policies, sales ofautomobile started growing sinceJanuary this year. He also informed thatHinopak has made huge investmentsand technology transfer for the industrydevelopment.Mr. Muhammad Irfan Shaikh, DirectorSales & Marketing, Hinopak said thatPakistan Automobile Industry isfacilitating the common people of thecountry by providing jobs. He addedthat increase in duties & taxes directlyimpacting the pockets of common

people and disturbing daily routine life.He also briefed the federal ministerabout the export activities, and said thatby successfully meeting internationalstandards in export quality, Hinopak incollaboration with its principals iscontinuously striving to tap otherprospective markets such as SaudiArabia, Qatar, Oman, Kuwait, Egypt,Bahrain, UAE, Jordan as well as manyinquiries are in pipeline from Panama,Mozambique, Cost Rica and Sub Saharacountries. He mentioned that Hinopakhas invested huge amount of money torenovate its body operation plant bykeeping in view the expected orders ofexport from different parts of the world.In the end he again congratulatedHinopak Management and workers forthe continuous success by setting upmilestones and benchmarks in Pakistanautomotive industry, and hope thatHinopak wi ll continue its journeytowa rds it s p rosp erity an d forbetterment of Pakistan as a whole...

Mir Hazar Khan Bijarani,Honorable Minister for Industries &

Production visits Hinopak

Corporate Event - Update


Local auto vendors ha ve soughtintervention of Ministry of Industriesfor practical implementation of AutoIndustry Development Plan (AIDP).Pakistan Association of AutomotiveParts and Access ories (PAA PAM)Chairman Tariq Nazir in a letter toSecretary Ministry of Industries andProduction Dr. Abdul Ghaffar Soomrosaid the Economic Coordina tionCommittee (ECC) in one of its meetingsal so endorsed the intent of thegovernment to follow consistent policyfor the local industry and this highlightsthe importance to ensure completeimplementation of the five-year AIDP.He said unfortunately, due to unknownreasons , none of the st ep s o fimplementation of AIDP that wereenvisaged to be enforced from July 2010were incorporated in the Federal Budget2010-11. “This has left the auto industrydirectionless and unsure of the fate ofAIDP,” he added.He urged the industries secretary torefresh this issue with Ministry ofFinance and Federal Board of Revenue(FBR) so that the implementation of theAIDP can be done in letter and spirit.He also asked the ministry to ensuretr ans p ar ency in util isat ion o fconcessionary SROs by the industry.The ministry should draft the ‘rules ofmanufacturing’ and notify them as aguiding document for approval of anypermission of concessionary imports by

the Engineering Development Board(EDB).

A car part vendor said thatpresently less than 40 per

cent parts weremanufactured locally by

auto vending industry, thebalance and the most

technological and high-techparts like engine,

transmission parts, fuelfilters etc., were imported

through concessionaryregime of SROs supported

by the five-year planapproved by the ECC in

2006.In case of cars, all the

technological parts in majorengine were imported fromthe parent companies of

local car assemblers.

He said auto venders who favour thecontinuation of AIDP were confrontingwith the resistance from car assemblersto further indigenise the technologicaland high-tech parts.The car assemblers allege the venders

of having no capacity to develop thetechnological parts as such for thepractical purpose no engine and notransmission parts and others high-tech parts ha ve been indigenised.AIDP through associated SRO 693levies a 15 per cent regulatory duty onthe locally developed parts accordingto the list of parts mentioned in thewhole programme.The engine andtransmission parts were supposed tobe locally manufactured during budget2009-10.The car assemblers having influence inthe power corridor managed to get thelocalis ation of 10 most importanttechnological parts including engine andtrans mis si on p arts def erred forlocalisation. As such the additional dutyof 15 per cent could not be levied yet onthe imports to force the imp ortsubstitution.The car assemblers gave undertaking tothe Engineering Development Board toindigenise these parts during 2010-11along with the deferred parts during theyear 2009-10.The automotive parts manufacturersraised various issues with the ministryof industries including localisation ofparts of cars may also be done as wasdone in motorcycles, rickshaws andtractors where deletion level rangesbetween 80-90 per cent while in car itwas still 50 per cent....


Auto vendors seek enforcementof development plan

Due to unknown reasons, none of the steps of implementation of AIDPthat were envisaged to be enforced from July 2010 were

incorporated in the Federal Budget 2010-11.

Automotive Sector - Update



The draft of the National IndustrialPolicy 2010 “Rebuilding Pakistan’sManufacturing Base” has said thatdeletion programme in the car industrycould not be as successful as one wouldhave hoped.With a few exceptions majorcar assemblers have achieved less than40 per cent local contents.The draft on the auto sector said thatuntil 2006, a deletion programme wasfollowed in the auto industry. Due tosome structural reasons as well as poorgovernance leading to smuggling andunde r- invoicing, the de le t ionprogramme remained unsuccessful.Moreover transfer pricing, where itoccurs, acts as a disincentive to producelocally. Where the auto industry haslocalized, it has produced thousands ofjobs and an extensive vendor industry.Several parts are being produced locallybut a few barriers continue to preventthis industry from going further.The draft recommended for strictlyenforcing Tariff Based System (TBS)which is officially in use but effectivelyin abeyance. This is absolutely crucial.In the absence of effective monitoringthe progress of local auto industry willbe severely impeded.There is a need for revising the indicesthat are still quoted for parts deletion.These are not based on internationalprices and are misleading. New indicesneed to be based on international pricesof respective components and the TBS

needs to be brought in line with these.Transfer pricing severely impedes thedevelopment of local market andbenefits only parent companies (originalequipment manufacturers) OEMs.The draft said that granting of Pakistanspecific licences for assembly restrictsexport potential of car makers in partsof the industry where high levels ofdeletion have been ach ieved. Thegovernment needs to take remedial stepsto eliminate this constraint. In thisregard priority will be given to threesectors: twowheeler, three-wheelers andtractor industry where most deletion orindigenisation has been achi eved.The draft said that any firms completingfull deletion and operating under localbrands should get a subsidy on mark-up. In order to facilitate deletion anddevelop local parts based on globalstandards, the draft said that an AutoDesign Institute wil l be set up in

conjunct ion with a Karachi-basedUniversi ty. The government shouldsponsor foreign consultants for stayingat the institute for next two years.The industrial policy draft covering allthe sectors has been circulated to all themi nistri es , t r ade b odie s andstakeholders for seeking further inputbefore presenting to the cabinet forapproval.Au to ana ly sts b elieve that thegover nme nt has fa iled to f or cecarmakers to bring down prices. As themajor engine and high-tech parts arestill in the import lists for assemblywhich due to yen and rupee disturbingparity gives a reason to car assemblersto increase prices.They said the answer is localisationwhich for many reasons given by carassemblers is held in abeyance. Thereasons of car assemblers do not limitto any extent but they allege that thereis no local technology base tomanufacture the high-tech parts locallyand moreover the vending industry isunpredictable as to the delivery andsupply commitments.They also justify the deferment of high-tech parts localisation by giving reasonsthat economy of scale is not sufficient,forgetting that same brand of car inThailand is manufactured less thannumber of cars in Pakistan but thelocalisation level is far ahead ofPakistan....

Auto sector localisationIndustrial policy

stresses strict adherence to TBSAuto analysts believe that the government has failed to force carmakersto bring down prices. As the major engine and high-tech parts are stillin the import lists for assembly which due to yen and rupee disturbing

parity gives a reason to car assemblers to increase prices.




The Board of Directors of Indus MotorCompany Ltd., met to review theCompany’s financial and operatingperformance for the year ended June30, 2010.The combined sales of Indus Motor’sToyota and Daihatsu brands of bothCKD and CBU for the year ended June30, 2010 registered an impressivegrowth of 48% to 52,063 units comparedto 35,276 units sold for the same periodlast year. Continuous improvement inall areas of man ufacturing andproduction planning enabled the plantto operate efficiently and at ful lmaximum capacity to meet the marketdemand. The production of IndusMotor’s Passenger Cars (PC) and LightCommercial Vehicles (LCV) for the yearincreased by 47% to 50,557 units asagainst 34,298 units produced in thesame period in 2009. Both the sales andproduction numbers are an all time newrecord for the Company. The Companyoutperformed the industry and themarke t at large und er se ve re

circumstances and was able to increaseits market share from 32% to 34.5%.The Company’s sales revenue increasedto Rs 60.1 billion, up 59% over Rs. 37.9billion; with pre tax profit of Rs 5.2billion, as compared to Rs 2.0 billionachieved during the year ended June30, 2009. Earnings per share increasedto Rs 43.81, as compared to Rs 17.62 inthe previous year.The domestic auto industry that hadwitnessed a 67% drop in volume overlast couple of years bounced back in2009-10, the industry demand for thelocally manufactured Passenger Cars(PC) and Light Commercial Vehicles(LCV) grew by 43% to 141,654 units ascompared to 99,310 units in 2008-09.

The overall production increased by 37%to 138,587 units versus 101,400 unitsproduced in the corresponding periodof 2008-09.The sharp rebound in demand is mainlyattributable to the combined effect ofhealthy agricultural income in thefarming community and margi nalincrease in auto financing coming ontop of the low volume base in thecomparable period of 2008-09, whichsuffered from the dampened demanddue to the extraordinary difficulteconomic conditions in the country andthe absence of Corolla which was onlypartially present on account of run outof the old model last year.The Board of Directors appreciated theCompany’s performance and declareda final cash dividend of Rs 10 per share,making for a total of Rs 15 per shareduring the year. The total dividend paidfor the same period last year was Rs 10per share....

Indus Motor announcesfinancial results for FY 09-10

Automotive Sector - Update Press Release

The domestic auto industry that had witnessed a 67% drop involume over last couple of years bounced back in 2009-10,

the industry demand for the locally manufactured PassengerCars (PC) and Light Commercial Vehicles (LCV) grew by 43%

to 141,654 units as compared to 99,310 units in 2008-09.

Pakistan Association of AutomotiveParts & Accessories Manufactures(PAAPAM) will take part in threeinternational automobile exhibitions inGermany, United States and Italy thisyear to get export orders for theirp roducts , de velop and e xp an dengineering base in Pakistan as well asintegrate it with the world markets.Former PAAPAM Chairman, MalikMoha mmad As la m told tha t 22PAAPAM members will take part in AutoMechanika show in Frankfurt from 14to 19 September 2010. 10 Pakistani

engineering companies will exhibit theirauto parts an d other engineeri ngproducts in AAPEX, Los Vegas, USAfrom 2 to 4 November. Pakistanimanufacturers of auto parts, casting,forging parts and metal sheets will alsoparticipate in Eima Auto Show inBolgna, Italy from 10 to 14 Novemberthis year.Aslam said the automobile industry hassuffered great financial losses due tounprecedented floods in the country.“Transport infrastructure has beendestroyed and the manufactures had to

pay exorbitant inland freight chargesfor transportation of their raw materialand manufactured engineering goods”,he said. He regretted that governmenthas not implemented its decision to payrebate to the manufacturers on inlandfreight charges of manufactured goodsfor export purposes. He added thatPAAPAM members are assessing theirlosses during July-August due to superfloods, which are still wreaking havocin lower Sindh.—Agencies

PAAPAM to take part in 3 internationalauto expositions



A foreign bank has said Pakistan wouldrequest the IMF for further assistanceafter the conclusion of the current loanprogram.“Pakistan is expected to enter into a newIMF loan at the end of the current stand-by arrangemen t (SBA) faci lit y inDecember, giving balance of paymentsupport in the medium term,” saidStandard Chartered Bank in its halfyearly 2010 report.Pakistan had requested the IMF foremergency assistance in November2008 on worst economic conditionsfollowing political instability, energycrisis, deteriorating security situationand global recession.IMF approved $7.6 billion for 23-monthSBA as si stan ce, which wa s laterenhanced to $11.3 billion in August2009.The report said reconstruction andrehabilitation of flood affected areas and

communities will be the key challengeahead for policy makers.“Significant fiscal reforms are expectedto be carried out, including tax reformsand power sector reforms, to limit thebuild-up in public debt and create fiscalspace for reconstruction spending,” the

report added.The bank said large external supportfrom the IMF and other internationalfinancial institutions will be critical tocushion the impact of floods.The IMF recently announced a $450million emergency loan program forPakistan to help flood victims andrehabilitate economic life in flood-hitareas.The report pointed out that large foreignaid commitments from the World Bankand Asian Development Bank wouldprovide further support to the nationaleconomy.“Pakistan is a key partner of the US andNATO forces in Afghanistan and willcontinue to benefit from large aid flows,including the $7.5 billion aid plana n no u n ce d b y t h e O b a maadministration for Pakistan over thenext five years, ” the report said.Pakistan’s economy has gone through aphase of difficult political and economicreforms over the last two years. Aimedat bringing greater stability to theeconomy, significant progress has beenmade under the $11.3 billion IMF loanand successful implementation of keyreforms has helped to tackle inflation,build up forex reserves and restoreinvestor confidence. The economy isshowing signs of recovery, growing at4.1 percent in FY10, the fastest pace inthe last three years, the report said.“However, recent floods have causedmas sive damage to the economy,threatening to derai l the growthmomentum,” Stan dard CharteredBank’s report said.The scale of devastation is large, with20 million people displaced. Theimmense damage sustained by roads,power infrastructure and houses isexpected to be close to $15 billion.The report said inflation is anticipatedto rise sharply due to the loss of sugarand rice crops, and also because of abreakdown in transport infrastructuredisrupting the supply of essential foodcommodities.

Pakistan likely toenter new IMFprogramme:report

Economic Update



Oil and Gas Regulatory Authority (Ogra)anticipates that the government wouldnot increase the prices of gas forcommercial as well as domesticconsumers till June 2011.Ogra Chairman Tariq Sadiq informedthe National Assembly's StandingCommittee that the authority sees nochange in gas prices in the country tillthe end of 2010-2011. "According to ourcalculations there will be no gas pricerise unless there is surge in crude oilprices up to $145 per barrel," he said.He briefed the committee that duringcurrent year, consumers will have toface acute gas loadshedding especiallyin winter.During this period the demand willincrease by 6266 mmcfd whi leindigenous supplies would remain 4984mmcfd. This shows a shortfall of around1300 mmcfd in coming winter. "Thedeficit may be reduced to 1182 mmcfdif LNG and gas is imported from theIran," he added.It has also been learnt that major portionof gas is consumed by energy sector(31.8 percent), general industry secondon list (25.1 percent) and domesticconsumer stand third (16.9 percent).It has been further stated that the costof gas has increased by 136 percent ascompared to fiscal year 2001-02, since

it is an uncontrollable factor. It has beenlinked with international prices of crudeoil and HSFO, determined as per GPAsexecuted between gas producers and thefederal government.The committee criticised Ogra for givingdual charge of office to Member Finance.With sor ting out the finan cialim plications, he has a lso beenauthorised to determine CNG prices inthe market.Committee member Pervaiz Khanalleged that it violation of the OgraOrdinance as it did not allow a MemberFinance to determine CNG prices.He further criticised Ogra for violatingthe natural justice. Oil and Gas Authorityhas assigned the task of listening tocomplaints and appellant authority tosame person.The committee was also informed thatin the prices of high speed diesel (HSD)56 percent surge has been observedsince January 1, 2007. Similarly, motorgasoline (MS) prices have gone up by60 per cent in the same pe riod.The prices of high octane blendedcomponent (HOBC) rose by 59 percent.Fuel for poor (kerosene oil) also showsa surge of 60 percent in the same period.Light Diesel Oil (LDO) prices have alsowitnessed 59 percent rise.

Ogra sees no gasprice hike till June 2011

Despite setting new Liquefied PetroleumGas (LPG) consumer price, Oil and GasRegulatory Authority seems reluctantto take any act ion agains t LPGmarketing companies, which haveallegedly stopped LPG supply and forcedthe consumers to buy it on sky-scrapingrates.Market sources have informed thatOGRA seems helpless in front of LPGmark et ing c omp anie s fo r theimplementat ion of its new LPGconsumer price, as LPG marketingcompanies have refused to provide LPGon OGRA consumer price from last threedays so consumers are forced to buyLPG on previous high-ceilinged ratesduring the holy month of Ramazan.In a press release , LPG Zonal StandingCommittee’s Chairman MuhammadIrfan Khokar said that people are

de s p er a te ly wai t ing fo r theimplementation of OGRA’s new LPGconsumer price. He blamed the LPGmarketing companies that have illegallyearned more than four hundred rupeesextra from one cylinder of LPG and havesuccessfully grabbed Rs 76.5 million ina day so Rs 22.95 billion during onemonth through improper profiteering.He was of the opinion that ‘gas mafia’has successfully snatched three hundredbillion rupees during last four yearswhich needs suo moto action from theChief Justice of Pakistan. He furtherappealed to the President Asif Al iZardari, Prime Minister Syed YousufRaza Gilani and Chief Justice of PakistanIftikhar Muhammad Chaudhry to getback this improper profiteering of Rs 4billion and use this weighty amount onflood affected areas.

OGRA reluctant to take action againstmarketing companies

The Punjab government has declined togrant exemption of excise duty and allow

procurement of denatured fuel ethanol

on zero duty to Pakistan State Oil (PSO)for producing E-10 gasoline, . "We had

requested Punjab government on behalf

of ethanol producers to grant exemptionin duties for producing E-10 gasoline,"

PSO Managing Director Irfan Qureshi

said while talking to press media.The government of Sindh has given

exemption of excise duty and allowed

procurement of denatured fuel ethanolon zero duty to produce E-10 gasoline

to make it economically affordable for

consumers. PSO said that the blendingof E-10 gasoline in Sindh and selling it

in Punjab would increase the Inland

Freight Equalization Margin (IFEM),resulting in higher price differential

claims (PDC).

Director General Excise and Taxation,Punjab had considered and examined

request of waiver of excise licence and

other legal/procedural formalities forprocurement of denatured spirit of

blending into motor gasoline but

rejected it. "Provincial excise lawsneither allows issuance of denatured

spirit without prescribed permit nor do

provides for exemption from paymentof duty except for education, research

and defence purposes only," DG Excise

said, adding that the department hadno objection to the issuance of permits

according to the provincial excise laws

on payment of prescribed fee and duties.

Producing E-10 gasolinePunjab denies excise

duty exemptionto PSO

Oil & Gas Sector - Update



Car makers may increase their prices tocover the rising costs of imported CKDkits on account of an appreciating yenagainst the rupee.“The car prices may be raised by up toRs50,000 a unit to offset the impact ofa rising yen and protect our margins,”a director of one of the country’s threeJapanese car assemblers media lastmonth.The yen has gained almost 10 per centagainst the rupee to rise to Rs1.0037 inthree months and 46 per cent in twoyears making imports from Japandearer.“The imported CKD kits are almost 35per cent of the total cost of a car. So youcan imagine the impact of the 10 percent increase in the import costs on ourprices and margins,” the executive said.He further said the taxes on imports hadalso increased in line with the rise in theimport costs of the kits.Another car assembler contended thatthe raw materials of the auto industryhad also spiked steeply in the past fewmonths putting immense pressure onauto makers worldwide.The price of steel sheet has gone up to$1,050 per ton from $701 at the

beginning of 2010. Similarly, the priceof aluminium primary ing ot hasincreased from $68 per pound to $108.On the other hand, however, thegovernment is bringing pressure on thecar assemblers to cut their prices tomake them affordable for more people.In order to build more pressure on thecar makers, the government is believedto be considering a proposal to relaxrestrictions on the import of used carsunder the trans fer of residence (T/R)scheme.“We are in a fix because the governmentwants us to reduce our car prices at atime when imports are becomingcostlier, prices of raw materials are goingup and our capacity utilisation is downto 55 per cent,” the assembler lamented.The industry sources claim that thegovernment has, in recent times, putpressure on the car makers by givingadditional concessions to new entrantsin violation of the Auto Indust ryDevelopment Policy formulated withthe consent of all the stakeholders.According to a proposal by the federalindustries ministry, the governmentcould double the rate of depreciationper month to two per cent on import ofused cars. Apart from that, it is alsoconsidering to allow import of up to five-year old cars instead of three years.“The government is fully aware of thefact that the economic slowdown andhigh inflation have resulted in anincrease in prices of every commodityand product, including the prices of theimported used cars.But the car prices have not beenincreased in line with their rising costs.

In fact, the prices of some brands havedeclined,” he claimed.It may be noted that Suzuki operatedon less that 50 per cent of its installedcapacity of 150,000 units during the lastfinanci al year, while Honda with acapacity of 40,000 units could roll outonly 13,500 units.Dewan worked at only 12.18 per cent ofits 10,000 cars’ capacity. Only IndusMotor could utilise above 77 per cent ofits installed capacity of 65,000 units.

Atlas Enginee-ring Limited posted Rs36.144 million profit after tax in the yearended on June 30, 2010 (FY10) ascompared to after tax loss of Rs 47.467million recorded in FY09. The board ofdirectors of the company in its meetingheld her e on Tuesday declare dcompany's earning per share of Rs 1.46in the period under review against lossper share of Rs 3.33 a year back.According to the financial results sentto Karachi Stock Exchange (KSE), thecompany's sales increased to Rs 1.529billion in FY10 against Rs 1.135 billionin FY09. The cost of goods soldincreased to Rs 1.341 billion against Rs1.070 billion. The company posted Rs58.062 million as profit before tax inFY10 against before tax loss of Rs 59.274million in FY09.

Atlas Engineeringposts Rs 36.144

million aftertax profit

Rising yen to impactcar prices

“The government is fully aware of the fact that the economicslowdown and high inflation have resulted in an increase in prices

of every commodity and product, including the prices of theimported used cars.

But the car prices have not been increased in line with theirrising costs. In fact, the prices of some

brands have declined,” he claimed.




Because ABS has been popular since themid-80s, I suppose most of you havealready known its theory. Anyway, forthe sake of those new joining carenthusiasts, I think it would be betterto describe it briefly here.Behind every new technology, there aretwo main things. Safety & Power. Whenany company discussing about newfeatures in vehicle, they keep these twothings in their mind that they are goingto make it safer and more powerful.All new technolog ies invented byBOSCH German, then they apply firstin Mercedes then it will taken by othersautomotive companies. BOSCH is theworld's largest supplier of automobilecomponents, an d has businessrel ationshi ps with virtual ly everyautomotive company in the world.Basic theoryYou might think that optimal braking isimplemented by completely locking allthe wheels. No, law of physics tells usthat the coefficient of friction betweenthe ground surface and a static object isalways greater than a moving object. Ifthe tyres are sliding on the road surface,the friction between road and wheel willnot be maximum. Therefore, themaximum braking occurs when thewheels are braked up to the level thatthe wheels just do not slide.To ensure the shortest stopping distance,ABS applies intermittent braking in veryhigh frequency. This avoid complete lockup of wheels, thus gives the name "Anti-Lock Braking System".

Another advantage of ABS is letting thedriver to keep controlling the car duringbraking. Before ABS appeared, cars lockup during braking, thus unable to besteered to avoid collision. With ABS,while slowing down the car, the drivercan simultaneously try to steer awayfrom the obstacle in front.To implement anti-lock braking, ABSsystem employs speed sensors forindividual wheels. If the wheel speeddetected differs from the vehicle speed,that means the wheel is sliding, thus thecomputer will signal the correspondingbrake to loose until sliding disappear.The computer will also compare thespeed of all wheels, if one or more ofthem run considerably faster thanothers, that means the car is losingcontrol, it will apply more brake to thatwheel to correct the driving path.

A Brief HistoryLet me share with you the little bitinformat ion I gathered. ABS wasorigi nated in aeroplanes. It wasdeveloped in order to shorten thedistance necessary for landing. It didnot appeared in road cars until 1966,when Jensen FF (the first 4WD roadcar) installed a system developed byDunlop. That system, called Maxaret,did not employ computer as well aswheel speed sensors. It just employedelectronic sensors to avoid locking thedisc brakes. Anyway, road testersimmediately found its superiority overconventional brakes.What's next. Sorry, my informationbecomes incomplete since then. Thefollowing is the information bits I got :

o BMW applied ABS to its road cars in1979. Then motorcycle in 1987.o Bosch launche d the mode rncomputerised ABS in the early 80s.Mercedes and BMW included it as option of their top of the range.o In 1985, Ford Granada Scorpio tookit as standard equip ment, whileChevrolet Corvette made it a verycommon option. As production scaleincreased, ABS became cheaper andpopular.o In the mid-80s, Lucas Girling and AP

also developed theirlow price ABS forcars like Ford Escortand Fiat Uno. Bothserved only the frontwheels.mini cars offer ABSas standard.Significance of ABSNot only enhance braking, ABS sensors,computer and hydraulic pump also serveas the hardwares for Traction Control,Electronic Stability Control and ArtificialLSD. If not ABS is so popular, these newtechnology might not have appeared.Technical DescriptionThese are some useful points of ABS.STOMP: Firmly depress the brake pedal.STAY: Stay on the brakes. Don’t pumpthe brakes!STEER: Steer where you want to go.It is designed to protect passenger inaccident. It wouldn’t be nice to a boythat accident in a first place, ABS canhelp you do just back. It is 4wheel anti-lock brake system is accident avoidancehappen in drive it to brake and steerwhere he wants to go in a hard brakingsituation. Its also called anti-skid brakesystem. In normal brake system whenyou apply brake, doesn’t allow to turnyour vehicle quickly but ABS has thissolution. It helps you in any type ofweather condition. It applies all wheelsto brake to eliminate wheel lockup andoptimize control.Remember that just because yourvehicle has ABS Doesn’t give a licenseto drive more aggressively, always keepa safe distance in front of you andmaintain a speed consistence with worldconditions and always

“Always Wear Your Safety Belt.”Please don’t forget…

Safety is a standard, not anoption

ABS(Anti-lock Braking System)

Exclusive Article by Omar Rashdi

About writer:

Omar Rashdi

D.A.E. (Cont.)

St. Patrick’s Technical Institute



The Board of Directors of the WorldBank has endorsed $115.8 millionKarachi Port Improvement Project, thefinancing will help reconstruct thecountry’s largest port to relieve thecapacity constraints and strengthenshipping revenues.Port improvement is a key componentof the Nat ional Trad e CorridorImprovement Programme (NTCIP),which was initiated by the governmentin 2005.The financing is an IBRD flexible loanwith fixedspread, commitment-linkedrepayment schedule, level repayments,and 28 years maturity including a graceperiod of 7.5 years.The World Bank has said that a numberof operations have been initiated at theKarachi p ort to improve overal lefficiency but several areas still requiringreform.“Improving the efficiency of Pakistan’strade corridors is a key element of thebank’s support to trade facilitation inthe country,” said Rachid Benmessaoud,World Bank Country Director forPakistan.“Karachi Port, as the main internationalgatewa y, provides a key l ink tointernational markets and throughefficient and cost-effective operationscan significantly reduce the cost of doingbusi ness in Paki stan ,” he added.This operation will support both theprovision of infrastructure capable ofhandling modern bulk cargo vessels and

the institutional support required topromote international best practice inthe management of port facilities.” TheKarachi Port Trust (KPT) currently hasa substantial development programme,but needs additional financial assistanceto improve utilisation of its availableresources.Aspects of the development programmeinclude, deepening the channel andharbour to accommodate mother ships,reconstructing old and shallow berths,and investing in cross harbour bridgesand cargo villages.

Fina nce f rom the Karachi PortImprovement Project will be used forthe reconstruction of old and shallowberths which will reduce ship waitingtimes and provide the necessary capacityat the Port for long term growth.Continued focus on the operationalaspects of the port will ensure its longterm sustainability and competitivenessboth within Pakistan and regionally.The World Bank said that Karachi porthas witnessed growth in cargo volumes,and in the fiscal year 2008-09, thelimitation in KPT’s general and bulkcargo capacity delayed wheat importswhich had serious economic and socialr epe rcussions for the count ry .“The berths at the Karachi port are tooshallow and illequipped to handle heavycargo,” said Simon David Ellis, WorldBank Task Team Leader and SeniorTransport Economist.“Reconstruction of the failed berths isnecessary to increase the effectivenessand efficiency of port operations, as wellas to enhance its environmentalsustainability.”The bank has been activein the port of Karachi since 1955. It hassupported six projects to date with thelast be ing the K ar achi P or tModernisation project during 1991-1998.With approval of the Karachi PortImprovement Project, the World Bankhopes to achieve both short and longterm goals to ensure a stronger transportsystem for Pakistan.

WB sanctions $115mKarachi port project

With approval of the Karachi Port Improvement Project, the WorldBank hopes to achieve both short and long term goals to ensure

a stronger transport system for Pakistan

Economic Update

–Approximately 5.1 million yen to becontributed to help victims–To ky o (S e pte mb e r 1 , 20 10)—Bridgestone Corporation announcedtoday that it will donate 2 million yenthrough the Japanese Red Cross Societyto assist with relief efforts following theJuly flood in Pakistan.Additionally, Bridgestone Asia Pacific

Pte. Ltd., a subsidiary of the BridgestoneCorporation, wi ll donate 50, 000Singapore dollars, equivalent to 3.1million yen, through the Singapore RedCross Society.On behalf of the global BridgestoneGroup, we would like to express oursincere condolences to those who havelost loved ones as a result of this tragedy,

and offer our wishes for a rapid recoveryin the areas devastated by this disaster.* Bridgestone has conducted tire salesbusiness for more than 50 years inPakistan.Source:http://www.bridgestone.com/corporate/news/2010090102.html- Press Release

Bridgestone Group SupportsFlood Relief Efforts in Pakistan


by Automark research team

The local markets are now flooded withhuge presence of various foreignlubricants and even many varieties likeloose and motorcycle oil are being soldon the footpaths by a number of people.A consumer is more interested in theprices rather than knowing the sourceof lubricants’ arrival either through legalor illegal channels. The prices of locallyproduced lubricants are definitelyslightly higher than the imported orsmuggled lubricants. However, thedevaluation of the rupee against thedollar has made imports costlier in thelast one year as one dollar is now equalto over Rs 84 as compared to Rs 63 lastyear. Besides rising crude oil prices havealso made an impact of locally producedoil products.As far as quality of locally produced andforeign lubricants are concerned, theremight be a slight or big difference butsurging cost of living in view of highprices of food items and burgeoningincrease in the tariff of gas andelectricity, many people prefer lowpriced lubricants irrespective of their

quality and damage to their machineries.For example, a lubricant pack of 700mlof two-wheeler is priced between Rs160-210 while imported or smuggledvarieties can be purchased at with a cutof Rs 10-20 per pack.Caltex Havoline Formula petrol engineoil (four litre and three litre) are nowpriced at Rs 1,542 and Rs 1,156 ascompared to Rs 1,480 and Rs 1,110 inDecember 2008.Havoline CNG oil four and three litreare now selling at Rs 1,254 and Rs 940as compared to Rs 1,212 and Rs 909 in

December 2008 respectively. Delo dieseloil 10 litre pack now sells at Rs 3,420 ascompared to Rs3,320 a year back.Prices of car and heavy vehicle lubricantshave also surged sharply in the last oneand a half years.Smuggled, fake an d low quali tylubricants severely damage the enginelife besides depriving the government’sfrom getting revenues.The prices of locally produced lubricantshave gone up in the last two years whichforce many people to buy low priced andquality lubricants.The local lube industry is facingproblems like huge inflow of Iraniansmuggled lubricants, illegal blendingand glut of sub-standard lubricants inthe markets. The lubricating oil andgrease demand in the count ry isestimated at 392,000 tons and 20,000tons per annum.The local lubr icant ind ustry iscontributing an estimated sum of Rs sixbillion in the heads of federal excise dutyand general sales tax. Other direct taxesby the individual units are additional

Lubricant Industry hit by Iraniansmuggled lubricant, illegal blendingand glut of sub-standard lubricantsLube base oil (LBO), a main raw material used in the making of

lubricating oils/greases, is solely produced by the NRL having maximumLBO production capacity of 190,000 tons per annum.

This quantity of LBO is only sufficient for producing 200,000 tonsto finished lubricating oils and greases

On the recommendation of the Association the FBR had increased the customsduty on the commercial import of carbon oil but the same is still being imported

through mis-declaration which should be controlled by the FBR.Similarly, import of LBO as well as used lubricating oil should only be allowedto registered lubricant manufacturing industry and it should not be importable

for commercial purpose.


Exclusive Report

continued on next page


source of national exchequer besidesproviding jobs to 0.3 million people.Lube base oil (LBO), a main raw materialused in the maki ng of lubricatingoils/greases, is solely produced by theNational Refinery Limited (NRL) havingmaximum LBO production capacity of190,000 tons per annum. This quantityof LBO is only sufficient for producing200,000 tons to finished lubricating oilsand greases. Around 5,000-10,000 tonsof reclaimed oil is also produced byregistered reclamation plants. As suchthe deficit 182,000 tons has to be metthrough imports of LBO, finishedlubricating oils, greases and reclamationof used lubricating oil up to optimumlevel.It is estimated that regular imports ofLBO, finished lubricating oils andgreases are around 30,000-40,000 tonsper annum whereas the rest of some140,000 tons is being from thesmuggling via Iran, fake lubricants inthe shape of carbon oil, synthetic rubberand l ig ht diesel oil cont raption,substandard refined lubricating oil beingmade in Karachi and fake and substandard grease.Chairman Al l Pakistan LubricantsManufacturing Association (APLMA),Mian Zahid Hussain said that the abovesituation is a threat to lubricant makersand fake lubricants are damaging theprecious automotive and industrialmachineries. The above mentionedmenace has two reasons which areshortage of raw material i.e. LBO andused lubricating oil which is requiredfor reclamation plants for reclamationand monetary benefit vested in illegalbusiness.He said the menace could be tackled byeliminating the shortage of raw materiali.e. LBO and used lubricant oil to theregistered blending/reclamation plantsand curtailing the monetary benefitsvested in illegal business.To eradicate the shortage of raw material, the Association has suggested followingsteps like abolishing the customs dutyon the import of LBO which at presentis 25 per cent. Due to impact of customsduty the imported LBO costs expensiveat Rs six to seven per litre as compared

to National Refinery’s price. As a result,the import of LBO is not practical.To eliminate 25 per cent customs dutyand FED at Rs 7.15 per litre from theimp ort of used lubr icating oil .In order to curb the nuisance of fake,and ill-refined lubricating oil/greases,Mian Zahid suggested monetary stepsas in this way the national industrywould be able to compete with cheapersmuggled and fake lubricating oil.The monetary steps are: FED of Rs 7.15per litre on the import of LBO shouldbe abolished. FED of Rs 7.15 pr litre onthe NRL produced LBO should also beabolished. FED of Rs 2.00 per litre fromreclaimed lubricating should be totallyabolished. FED on finished product i.e.lubricating oil should be aboli shedinstead of 10 per cent of retail price.Lube additives/chemicals are main rawmaterial and not produced in Pakistantherefore five per cent customs duty onthe import of these should be abolished.FED on locally manufactured greasesas well as FED and customs duty on theimport of grease sh ould a lso beabolished. Withholding tax chargeableat 3.5 per cent under section 153 of theIncome Tax Ordinance 2001 on thesupplies may also be abolished as thisis an element of increasing the cost ofpacking material etc which ultimatelyresults into higher prices of lubricants.To control the menace of sub standardlubricating oils and greases someadministrative measures are requiredsuch as: Sales tax registrations tolubricant manufacturing units shouldbe subjected to prior registration fromthe OGRA. This is also a mandatoryrequirement under Pakistan PetroleumRefinery Rules 1971, which is not beingimplemented.Sales tax registrations issued already tothe lubricating units should be revokedimmediately from those who do notposses valid registration under PakistanPetroleum Refiner y Rules 1971 .Another prime source of sub-standardlubricants is carbon oil which is mixedwith synthetic rubber , LDO and otheroils. Carbon oil is a basic raw materialfor producing carbon black and this isonly one industry which is converting

carbon oil into carbon black i.e. NationalPetrocarbon Limited. Hence the importof carbon oil for commercial purposeshould not be allowed rather it can onlybe importable by the relevant user forb ona-f ide industr ia l p urp ose .On the recommendat ion of theAssociation the FBR had increased thecustoms duty on the commercial importof carbon oil but the same is still beingimported through mis-declaration whichshould be controlled by the FBR.Similarly, import of LBO as well as usedlubricating oil should only be allowedto registered lubricant manufacturingindustry and it should not be importablefor commercial purpose. By doing so,illegal lubricant manufacturers will bediscouraged and there are 50 factoriesduly sanctioned/regi stered by theMinistry of Petroleum and NaturalResources which is the only authorityto grant permission for production oflubricants under Pakistan Petroleumand Refining Rules 1971. However, thereare number of illegal producers who hadsucceeded to obtain L-1 license fromC entral Excise an d S al e s TaxDepartment by taking advantage oflacunae in the law and do not haveregi stration/permis sion from thePetroleum Ministry.Mian Zahid said that by adopting abovementioned fiscal and administrativemeasures the national industry couldflourish and also be able to fill the gapof demand and supply by providingquality lubricant. The industry could beable to export the finished lubricants inthe world markets just like UAE wherelube industry is exporting finishedproducts to around 60 countries. UAEhas no lube refinery rather it importsbase oil from international market.He said suggesting above proposals, theAs sociation has kept in mind therevenue of the government which shouldnot be r educed. Revenue lossapprehended due to elimination ofcustom duties and federal excise dutyas suggested above will be recoverablethrough sales tax as the aforesaid out of140,000 tons per annum would be soldthrough channel.....

Ministry of Petroleum and Natural Resources which is the only authority to grantpermission for production of lubricants under Pakistan Petroleum and Refining

Rules 1971. However, there are number of illegal producers who had succeededto obtain L-1 license from Central Excise and Sales Tax Department by takingadvantage of lacunae in the law and do not have registration/permission from

the Petroleum Ministry.


Exclusive Report



Increasing lending facilities supportgrowth as car loans account for up to 70per cent of car salesAutomotive sales in the Kingdom ofSaudi Arabia (KSA) is expected to reachover SAR 69.4 billion in 2010, whilethere will be a 30 per cent growth in thenumber of vehicles sold from 676,000to 880,000 within the next three years,according to a recent BMI report. Afactor in the robust market growth isincreas ed av ailabili ty of lendingfacilities, with car loans expected toaccount for up to 70 per cent of car sales,up from 50 per cent.Taking advantage of the industry'srobust growth forecast, Riyadh MotorShow 2010 - The 28th InternationalExhibition for Motor Vehicles, and SaudiAutoshop 2010 - The 14th InternationalExhibition for Auto Repair Equipment,Tools, Parts and Accessories, wil lshowcase the latest models, accessoriesand specialised automotive services fromleading international brands. RiyadhMotor Show and Saudi Autoshop willbe concurrently held from December 5to 9, 2010 (29 Dhu al Hijjah 1431 till 3Muharram 14 32) at the RiyadhInternational Convention & ExhibitionCentre, expecting to attract over 85,000visi tors from al l over the world.Kamil Al Jawhari, Project Manager ofRiyadh Motor Show at Riyad hExh ibit ions Compa ny, said: "Thefavourable economic conditions havehelped consolidate Saudi Arabia'sreputation as a hi ghly att ract iveautomotive market. Moreover, therewere sever al other fact ors tha t

contributed to the encouraging autosales growth in 2010, including theimposed restrictions on the age ofimported used vehicles an d thepopulation growth in the country, whichhas helped spark the increase in demandfor vehicles and auto parts and services.In addition, the local weather condition,which can be harsh on vehicles, has alsobeen a factor in the steady demand forauto maintenance services."Industry pundits expect Saudi Arabiato remain generally impervious to theeffects of the global downturn as a rangeof demographic factors and the country'sfinancial stability help cushion anynegative impact on the automotivesector. Factors such as strong populationgrowth of up to 3 per cent annually, highdisposable income, low tariffs onimported cars and low fuel cost are

boosting the automotive sector's growthprospects, even as up to 60 per cent ofthe country's population comprise the16 to 64 age bracket, which is within theindustry's market range.Riyadh Motor Show 2010 will showcasethe latest models of passenger cars,station wagons, Sports Utility Vehicles(SUV), pick-up trucks, motorcycles,Special Purpose Vehicles, and 4x4vehicles. It will also include automobilefinancing and insurance services.Saudi Autoshop 2010, which is heldconcurrently, will feature the latestautomobile accessories an d repairserv ice equip ment; gas st at ionequipment; automobile parts; tires,exhausts and batteries; and automobilecare products.....

International Automotive Sector

Automotive sales in Saudi Arabiato hit over SAR 69 billion in 2010

Riyadh Motor Show 2010 will showcase the latest models of passengercars, station wagons, Sports Utility Vehicles (SUV), pick-up trucks,

motorcycles, Special Purpose Vehicles, and 4x4 vehicles.

It will also include automobile financing and insurance services.

Industry pundits expect Saudi Arabia to remain generally impervious to the

effects of the global downturn as a range of demographic factors and the

country's financial stability help cushion any negative impact

on the automotive sector.



The federal government has shelved'Thar Coal Gasification Project,' termingit technically unfeasible, which had alsosparked controversy between federalan d S ind h gover nments. " Theexperiences of coal gasification in Indiaas well as China have already failed andtherefore it is not technically feasible,"Saleem Mandviwalla, Chairman, Boardof Investment (BoI), said while talkingto press.He said that Pakistan is yet at miningstage where coal gasification is notpo ssib le this t ime. P lanningCommission, which is not an executingagency, had conceived a pilot project of'Thar Coal Gasification', which createddifferences between federal and Sindhgovernments.Sources said that Sindh government hadstrongly resisted and warned PlanningCommission not to table it again on theage nda of Cent ral Develop mentWorking Party (CDWP) of PlanningCommission for consideration. Theysaid that after resistance by Sindhgovernment, the Planning Commissionhad said that the scope of the project

had been broadened to include othercoal deposit areas of the economy andthere was a need to modify the title andscope of the project.Subsequently, the Planning Commissionchanged the title of the project andrenamed it as 'Cr eation of NewProcessing Facilities (for handling andpurification of Coal Gas (HPCG)produced by und erground C oalGasifica tion in an y Coal field inPakistan'.In the modified PC-1 of the project, it

was proposed that the scope of theproject would not be limited to districtTharparkar and be broadened to covercoal deposits in other areas so that othercoal deposits of Punjab, NWFP,Balochistan, FATA, NA and AJK can beexplored. Sindh had also questioned therole of the Planning Commission asexecu ting agency of the project.The project, titled 'Creation of NewProcessing Facilities (for handling andpurification of Coal Gas (HPCG)produced b y under gr ound coalgasification' was approved in the CDWPmeeting held on April 30, 2009. Theaim of the project was to create newprocessing facility for handling andpurification of coal gas produced byunderground coal gasification locatedin Tharparkar Sindh. The proposedmodif icat ions in the tit le andlocation/scope of the project wereapproved and PC-1 would be modifiedaccordingly. Total cost of the project isRs 490.480 million including foreignexchange component of Rs 79.700million…

Thar Coal GasificationProject shelved

Pakistan’s Thar Coal

Reserves Are More

Than Oil Reserves Of

Saudia & Iran

Alternative Energy - Update



Japan’s Honda is believed to be in talksto sell its 26% stake in Hero HondaMotors, the enormously successful, 26-year-old joint venture responsible fortrans forming the local motorcycleindustr y an d spurring an ent iregeneration of Indians to take to biking.A person close to the development saidHonda and its Indian partner, the BMMunjal-own ed He ro group , arediscussing a formula that would enablethe Japanese firm to sell its shares at adiscount. A Munjal family company willpurchase most of the shares with somehelp from private equity firms, he added.The news, broken first by ET NOW, thisnewspaper’s business channel, drovedown the shares of Hero Honda in themarket on Tuesday as investors worriedover the impact the separation will haveon India’s largest motorcycle maker.The management of both the companies,though, strongly denied it. A HondaMotors spokesman told BloombergNews that the company had no plans tosell. A statement issued by the Herogroup said it has enjoyed very cordialand fruitful relations’ with Honda andthere is no change in the relationship inany manner. A top Hero Hondaexecutive said ‘stake sale was not evenon the table’, though he added thatdiscussions between the two partnerscentred around securing the future ofthe joint venture.Hero Honda shares slumped 6.8%before the denials triggered a pull-back.The shares ended down just 0.11% at Rs1,790. But the person with the directknowledge of the situation said talks areon and the Munjal-owned companyincorporated overseas will buy theshares from Honda and take the Herogroup’s stake in the motorcycle firm to52%.At current market price, the 26% stakeis being valued at Rs 9,293 crore, or $2billion, but this person said the Hero

group, which has the right of first refusalover Honda’s shares, is likely to pay ata discount as part of an amicablesettlement.He added that the Hero group will raisemoney from private equity investors inthe new company after the first leg ofthe transaction, giving them an indirectstake in Hero Honda. Discussions areon with three private equity firms andthis new holding company will be valuedon the basis of its 26% in Hero Honda,the person added. Other combinations,such as a direct sale by Honda to aprivate equity firm, are also beingdiscussed, but no details were available.A senior auto industry veteran, however,said Honda and the Hero group havebeen sparring over some key issues suchas royalty and spare parts purchases forsome time now.Honda wants to increase its royalty fromthe sales of the joint venture but hasbeen unable to do so because bulk of thesales, about 60%, are contributed bySplendor and Passion, two old bikes.Honda also wants the Hero group toroute all spare part purchases throughHonda Motorcycles and Scooters India,(HMSI), which the Hero group has beenresisting for a long time. “This could beHonda’s way of getting the Hero groupto the negotiating table,” he added.The Hero group and Honda cametogether in 1984 to buil d and sellmotorbikes in the country and their

venture was an instant hit. A consumerboom trig gered by former primeminister Rajiv Gandhi ’s economicreforms and the success of another Indo-Japanese joint venture, Maruti Suzuki,quickly propelled Hero Honda to thetop of the sales charts.Its cleverly-worded, catchy slogan, Fillit, Shut it, Forget it’ focused on theIndian consumer’s concern for mileageand r eliabil ity , helping shut outcompetition completely. Very soon,Honda was selling more bikes than BajajAuto’s scooters, despite the latter’sdecades-old headstart. A separation atIndia’s largest motorcycle maker, if true,wil l have large implications for thecompany and it s sha reholder s.Hero Honda has spent the last fewmonths trying to stare down the threatfrom a resurgent Bajaj Auto, and ashareholder squabble and split willdivert attention at a very crucial time.The second issue relates to access totechnology. Honda has shoulderedmuch of the burden, though the Herogroup’s market ing acu men andknowledge of the consumer has alsoplayed a big role in the company’ssuccess.“For the next three years, Hero Hondawill not have any problem as it will havetechnology commitment. But what willhappen after that is yet to be seen,”Ramdeo Agarwal, managing director ofbrokerage firm Motilal Oswal Securities,said. The current technology agreementbetween the two companies is due toexpire in 2014.“This development can have two majorimpacts. What will happen to HeroHonda’s new product line after threeyears when the current technologycontract ends? Second, it will result ina far more aggressive HMSI,” said aseni or auto analyst wi th a foreignsecurities firm.....

Honda in talks to sellHero stake to Munjals

A person close to the development said Honda and its Indianpartner, the BM Munjal-owned Hero group, are discussing a

formula that would enable the Japanese firm to sell itsshares at a discount

International Automotive - Update


AUTOMARK | July-2010 37

To own a flashy brand-new car is thedream of millions in this developing

country, but to opt for a career in

automobile industry is a different thingaltogether. Professionals who want to

pursue a career in auto industry must

have an aptitude towards this field sinceit takes an inborn understanding and

interest towards vehicles to be an

automotive engineer.Automotive and related industries are

the biggest investors after chemical

industries in the international trade.Pakistan also witnessed tremendous

growth in automotive industry in recent

y ears s ince the p rivat e se ct orinvestments are facilitated by supportive

policies of government. Unfortunately,

the educat ional se ctor in thisdepartment is in its developing phase,

and will take a while before it finds its

feet.“NED University of Engineering and

Technology is the only university

p roviding bachelor-level degreeprogramme in automotive engineering,”

said chairman, automotive and marine

e ng inee ring dep artment , NED.NED started this programme two years

ago and their first batch will graduate

in 2010, said Hamid, adding that the

National University of Science andTechnology (NUST) is also planning to

develop an automotive engineering

department in the coming years. Whilediscussing the admission criteria for the

newly-established department, Hamid

explained, “At present there are 50 seatsin automotive engineering section.

Students who have completed HSC in

pre-engineering or those with foreigndegrees are allowed to apply for the

programme.”

Regarding the career prospects forautomotive engineers in Pakistan,

Ham id is not ver y op t im ist ic.

“Automotive engineering is a sub-fieldof mechanical engineering and not fully

developed at academic level in our

country.” No surprise then, that reputedfirms p refer to hir e mecha nica l

engineers. In fact, Hamid is not very

confident if the very first batch ofautomotive engineers will be able to

replace mechanical engineers in this

industry. However, he added that thereputed auto-manufacturing companies

like Suzuki, Toyota, Honda, Nissan as

well as auto-parts manufacturing firmscan offer a huge scope for auto-engineers

in future, where at present mechanical

engineers are working.

However, if for some reason, autoprofessionals do not find a suitable

career in automobile industry, they can

always switch to other industries thatinclude machinery-related tasks, such

as textile industry, sugar mills, etc.

While talking about career possibilitiesof auto-engineers abroad, He added that

there is a huge scope for auto-related

careers in Middle East for Pakistanis,but not in Europe and America since

the employers there do not accept

Pakistani degrees.But if a Pakistani graduate holding a BE

degree in automotive engineering gets

enrolled in a masters programme in anyEuropean or American university, he

will find it easy to start a career there.

For automotive engineers, a special one-year course is also designed by foreign

employers. If our engineers pass this

course, they can be hired by employersin the West. But the place where auto

ind ust ry really val ues Pakistan i

professionals is Middle East where onecan see many Pakistanis working in auto

manufacturing firms.

Auto industry provides a variety ofcareer options from designing to

manufacturing and quality assurance to

mar ket ing an d man age ment . .. .

For sheer driveCareer in automotivesFor automotive engineers, a special one-year course is also designed by

foreign employers. If our engineers pass this course, they can be hired byemployers in the West. But the place where auto industry really values

Pakistani professionals is Middle East where one can see many Pakistanisworking in auto manufacturing firms.

Automotive - Article


September-2010

www.automark.pk

[email protected]



Clean EnergyResear chers at NASA Ames areconducting cutting-edge research in thede velo pme nt of c lean ene rgytechnologies for NASA mission needsin the Exploration Systems MissionDirectorate and the Science MissionDirectorate. Our renewable energy focusis on advancing biofuels, solar, and windtechnologies that also help reduce ournation’s dependence on petroleum-based fuels. By advancing clean energytechnologies, NASA Ames hopes to helpour nation reduce its generation ofgre enh ouse gas es and cre ate asustainable future here on Earth.

BiofuelsBiofuels may provide a means togenerate and store energy for NASA’slong-term human ha bitation andexploration missions. NASA Ames isconducting research on biofuels fromboth algae and waste biomass. Algae canbe grown as a crop that is very high inoil content; waste biomass is envisionedas a elegant means of extracting energyfrom waste materials. Biofuels alsobenefit us here on Earth as atransportation fuel that reduces ourdependence on foreign oil and mitigatesthe generation of greenhouse gasemissions.

The Algal Biofuels Team is centeredaround expertise in algal strain selection,gr owth, characte rizat io n, an dmonitoring, including photobioreactor

r e se ar c h an d de ve l o p me n t ,microsatellites with algae in space, algaefrom extreme environments, and algaecommunities research.

The Cellulosic Biofuels Team isfocused on bioengineering techniquesthat can improve the efficiency ofdigestion enzymes, investigating lipidextr ac ti on and analy ses, androsettazymes research to improve thecellulose-to-glucose-to-fuels process.The team issued a press release on July31, 2009 describing their currentresearch.

The Systems Engineering groupdevelops and analyzes requirements forcomp lex syste ms wi th uniq uecapabilities to technically integratecomponent processes into a singlesy stem an d asse ss p o ten t ia lsustainability and ecosystem impacts.

Solar EnergySolar energy is the primary source ofpower for today’s NASA missions. Newsolar technologies can improve space-based energy systems for human androbotic spacecraft missions. NASA solartechnologies demand that deployed solarenergy systems be as efficient and aslightweight as possible. Researchers at

NASA Ames are pushing the limits ofsolar energy efficiency and weight bycreating new materials that enhancesolar energy system performance. Ourtec hnolo gie s fo r spac e -b as edapplications also provide Earth-basedbenefits, helping to drive down the costof solar energy with more efficientsystems.

Wind EnergyAeronautics research, including theaerodynamics of air flow over turbines,is one of the signature areas of researchfor NASA Ames. NASA Ames maintainsseveral different wind tunnels of varyingsizes used to predict the performanceof new prototype designs of rotocraftand o the r e q uip me nt whe reaerodynamics is a critical component.With deep skills in modeling and design,our researchers can apply their expertiseand facilities to wind power applicationsto create more efficient wind powersystems.

• Wind Tunnels• R o t o r c r a f tAco us t ics / A er oa c ous t ic s• C om put a t io n a l F lu idDynamics• Fluid Mechanics

GreenspaceLeveraging NASA far a Greener Earth

Alternative Energy update



The government’s plan toimpose a five per cent floodrelief surcharge has beenstrongly opposed by importersand economists, who say thetax will not only hurt all majorsectors of the economy but willalso increase prices of essentialitems.The government is considering levyinga special surcharge, endorsed by theInternational Monetary Fund, on alldutiable items, including essential ones,at a rate of five per cent. According to astudy carried out by the ministry offinance, if the surcharge on dutiableimports is levied from October 1onwards, it would generate an additionalRs74.1 billion till June 30 next year.“The most worrisome aspect of the fiveper cent additional tax on dutiableimports is its significant inflationaryimpact ,” sai d Dr Hafeez Pasha,Chairman Revenue Advisory Counciland former minist er of f inance.According to calculations conducted bythe ministry of finance, inflation mayshoot to 25 per cent in coming monthsdue to disruptions in the supply chainof necessities and soaring demand forconstruction material. This study doesnot include the impact of five per centsurcharge.“The economy does not have thestrength to bear the burden of anothersurcharge. It would be very bad for theeconomy,” added Dr Pasha.“What the government should do is toexempt essential items like fertiliser,wheat, pulses, petroleum products,edible oil and medic ines from thissp ecia l su r cha r ge ,” he added.Dr Pasha also said that the surchargewould adversely impact importers ofraw material. However, it will provideprotection to an industry that sellsfinished products as the surcharge willmake imports expensive and provide anedge to the local industry.Presently, the average import duty rateis 11 per cent which would increase to16 per cent after the surcharge and mayseverely affect inflation. The governmentwould collect an additional $500 million

on only petroleum products as theannual import bill hovers around $10billion.The flood surcharge would immediatelyincrease petroleum product prices by atleast 10 per cent as the price will becalculated by taking into account allpayable duties.Dr Pasha criticised the governmentpolicy of collecting money by levying anadditional surcharge. “The federal andprovincial governments should cut theirdevelopment budgets by 25 per cent asthis move alone could save over Rs150billion, which is much more than theexpected revenue from the flood reliefsurcharge.”In addition to importing advancedmachinery, Paki stan also importsvarious raw materials, reprocesses themin local industries and then exportsfinished products.The raw materials which Pakistanimports, utilises and then exports mainlyinclude raw cotton, synthetic fibre, silkyarn, fertiliser, insecticide, plasticmaterial, iron and steel, scrap and otherchemical products. The range of rawmater ia ls sh ows how broadly asurcharge would affect consumers acrossdifferent sectors.“Any move to slap a special floodsurcharge will negatively affect thetextile and engineering industries themost,” says Sultan Burk, an individualwho imports zinc as raw material. Burksaid that if the government levies thissurcharge, it would become very difficultfor him to run his factory.He added that in such a case he wouldprefer to import the finished productsfrom China, as those would be cheaperthan producin g the goods locally.The business community wants to helpthe flood victims but has shied awayfrom giving money through the

government. It is sceptical of thetransparent use of money and worriedabout any negative impact of thesurcharge on the industry.Islamabad Chamber of Commerce andIndustry Chairman Zahid Maqbool alsoopposed the idea of levying any form offlood surcharge on imports. “Any suchmove would fuel inflation and above allno one was sure about the fair use ofmoney,” he said.Instead, he suggested the idea that thegovernment could levy a fixed surchargeof up to Rs2,000 on services renderedby the state. “In order to ensuretransparency the amount should bepooled in a flood relief fund so that itcan be duly audit ed,” he sa id .All Pakistan Car Dealers Chairman HMShahzad is currently operating a reliefcamp in a remote Sindh town but he isreluctant to donate money through thegovernment. In addition to transparencyissues, he was also apprehensive aboutthe fallout of the surcharge on the importof used cars.“Since 2008, import duties on cars haveincreased dramatically by 265 per centand the likely imposition of 5 per centflood surcharge would actually result ina 25 per cent increase in prices of carsas the price would be charged aftercalculating al l imp ort dutie s. ”Shahzad said that the surcharge wouldalso result in shrinking car imports andwould also strengthen the position oflocal car manufacturers who will findmore avenues to exploit consumers.“The government is not working in areaswhere it can actually get more money,”he said, adding that instead of slappingthe surcharge at the import stage thegovernment should think of increasingroad vehicle tax and registration fee fornew cars.However, Planning Commission DeputyChairman Dr Nadeem ul Haq remaineda strong proponent of the floodsurcharge. He sa id that people,irrespective of their affiliations, shouldcome out to help their countrymen. Hesaid that the surcharge would not affectthe industry much.

Economists,importers oppose flood tax

Focus on Flood Tax



Rep re se nt at ive s fr om six localautomotive companies and developmentteams came together at the Center forAutomot ive Research at Stan ford(CARS) last month to show off theirprototype vehicles at the annual VehicleConcept Showcase. In a question-and-answer session led by CARS directorSven Beiker, a lecturer in mechanicalengineering, the teams discussed theinnovative technology that makes theircars unique and said they hope to inspiremajor car manufacturers to take notice.The center invited four teams in itsextended network, as well as two of itsown student-run projects, to speak inthe hope of giving visibility to alternativevehi cles that mig ht otherwise gounnoticed. The five vehicles that madean ap pear an ce at the showcasedemonstrated technology ranging fromthe standard combustion engine to fullyelectric and solar-powered systems.Silicon Valley may not call to mind thesame images of car manufacturing thatDetroit does, but according to the teamsthat have made their home here, thevalley has benefits that Motown doesnot offer. As the industry moves furtheraway from gasoline-powered vehiclesand toward electric cars, it is more usefulf or them to be closer to themanufacturers of the chips that gave thevalley its name.“The Silicon Valley has a lot to offer interms of innovation and self-startersand just a can-do at titude,” saidChristopher Heiser, the co-founder of alocal automotive start-up. “But there’sa lot to learn, and this is really anopportunity for all of us to really work

together and innovate.”The move to Silicon Valley has alsohelped these businesses reach out toStanford students and alumni. Stanfordstudents contributed not only to the twoall-student teams, but to other projectsat the showcase, too. Dante Zeviar, thechief technology officer of KleenSpeed,whose racecar placed first this year atthe Refresh race for electric vehicles,said that having students on the teamis one of their priorities.“[We] are about knowledge and learning,so in that spirit, I like to bring in internsand people from universities,” Zeviarsaid. “My objective in life is to bring inyoung people, the next generation. Theworld is full of young people, and I’mstarting to get a little old. So the purposeis to bring in very smart individuals andget them involved.”Although some of those who presented

hope to commercialize their productswithin the next year, others, such asKleenSpeed and Optimotive, hope touse the data they’ve collected and thenew techniques they’ve produced as aspringboard for the future. KleenSpeedeven hopes to take what it has learnedfrom race cars and apply it to a morefamiliar car, the Mazda Miata, so thecompany can further its knowledge ofhow electric vehicles might function indifferent scenarios.One goal of the event is for suchknowledge to filter back to Motor City,where the big car manufacturers wouldbe able ensure much more widespreaduse.“We want to reach out to the start-upsin the area to give them visibility theywon’t get otherwise, but we also wantto get the incumbents inspired,” Beikersaid...

Car start-upstalk technology

The five vehicles that made an appearance at the showcase demonstratedtechnology ranging from the standard combustion engine to fully electric

and solar-powered systems.

Automotive Technology - Update

Visit our new websitewww.automark.pk



Honda Motorcycle & Scooter India Pvt.Ltd. (HMSI), the 100% owned 2-wheelersubsid ia ry of the Honda MotorCompany Japan launched the longawaited new Sport Touring motorcycle,the VFR1200F, on Aug. 10th, 2010.Mr. Shinji Aoyama (President & CEO,Honda Motorcycle & Scooter India Pvt.Ltd) says: "VFR1200F is a combinationof sports and touring capabilities topremium Indian customers who areactively on a look out for brands thathave a high ‘FUN' quotient.""This fun bike is manufactured at theHonda's most advanced facility &mother plant of global motorcycles - TheKumamoto factory Japan. VFR1200F isa concept driven by extensive customerneeds & adoption of state-of-the-arttechnologies."A truly international design team on theVFR1200F aimed at creating an excitingsports bike with long distance touringcapabilit ies. There starting pointaccording to Honda: "imagine deciding,impulsively, to ride 300 km, devouringhighways and twisty canyon roads, justto enjoy lunch at a perfect location andthen head back home."

With this inspiration came forward thefirst sketches of this dream fun bike.Many a refinement and passionateexchanges later, VFR1200F translatedfrom a dreamy sketch to its fascinatingself that made a big splash in the moremature USA and European motorcyclemarkets.The Indian market will now get toexperience the VFR 1237cc fuel injected,l iquid cooled, compact V4 engine.Famous for its unique pulse feel, the V4engine offers manageability, strongtorque delivery and produces more than9 0% of it s max i mum tor q ue(129Nm/8,75 0 rpm) at 4000 rpm.The Honda VFR1200F is a bike of manytechnological firsts. Successor to thelege ndar y VFR800 and Honda' sCBR1100XX Super Blackbird in India,this is the first motorcycle with Honda'srevolutionary Dual Clutch Transmission(DCT) technology.The rad ical engi neering of theremarkably narrow cylinder heads andcylinder spacing lend more masscentralization and rider comfort; whilethe ergonomically designed layeredfairing technology claims to provide

extra stability to VFR1200F.The unique throttle-by-wire system inthis motorcycle ensures outstandingresponse & seamless acceleration acrossthe engine's rev range.While aiding control under intense de-acceleration is the slipper clutch, whichallows the rider to stay firmly in place.The radical combination of CBS withABS, link the benefits of ABS with themeasured application of front brakeswhen the rear brake lever is used.This truely international motorcycleplatform utilizes the UNICAM singleoverhead camshaft cylinder head designand the sealed crankcase system fromt he wo r ld- cla ss Hon da C R Fmotocrossers. Never before used on aroad bike, these technologies provideexcellent throttle response and improvedfuel consumption.The 2010 Honda VFR1200F makes itsstylish Indian debut in the same twostunning hues- Candy Prominence Redand Seal Silver Metallic. The showroomprice in Delhi for the VFR1200F is1,75 0,000 Rupees or an estimated$37,600.00 USD.

Honda MotorcycleIndia Gets VFR1200F

International Automotive - Update


CHEVROLETModel Price

Rs. 569,000CHEVROLET JOY CNG

Rs. 539,000CHEVROLET JOY Petrol

Price updated July’ 2010

MEHRAN VX 800ccMEHRAN VX (CNG) 800cc

MEHRAN VXR (CNG)MEHRAN VXR

ALTO VX 1000cc

ALTO VX (CNG)

ALTO VXR

ALTO VXR (CNG)

Rs. 433,000Rs. 479,000

Rs. 488,000Rs. 532,000

Rs. 556,000

Rs. 614,000

Rs. 635,000

Rs. 684,000

SUZUKIModel Price

TOYOTA COROLLAModel Price

ALTIS 1.8 VVTi M/T

2.OD SALOON

GLI 1.3 VVTi Rs. 1,426,000XLi 1.3 VVTi Rs. 1,300,000

2.OD SAL SUNROOF Rs. 1,799,000

2.OD Rs. 1,358,000Rs. 1,713,500

Rs. 1,713,500

ALTIS 1.8 VVTi A/T Rs. 1,799,000

LIANA 1.3L RXI MT PETROL

CULTUS VXRCULTUS VXR (CNG)

CULTUS VXL

CULTUS VXL (CNG)

LIANA 1.3L RXI MT (CNG)

LIANA 1.3L LXI MT PETROL

LIANA 1.6L Eminent AT

RAVI PICKUP ST308R VX

RAVI PICKUP ST308R VX CNG

BOLAN VAN Petrol VX

BOLAN VAN VX CNG

SUZUKI VAN CARGO

BOLAN VAN VXR

BOLAN VAN VXR CNG

LIANA 1.3L LXI (CNG)

Rs. 816,000

Rs. 857,000

Rs. 865,000

Rs. 912,000

Rs. 1,114,00Rs. 1,184,000

Rs. 1,165,000

Rs. 1,230,000

Rs. 512,000Rs. 564,000

Rs. 578,000Rs. 631,000Rs. 478,000

Rs. 1,229,000

Rs. 453,000

Rs. 504,000

SUZUKI SWIFT 1.3L PETROL Rs. 1058,000

NISSAN CARSModel Price

Sunny Ex-Saloon 1.6L M/T Rs. 1,225,000Sunny Ex-Saloon 1.6L CNG Rs. 1,305,000

S. Super Saloon 1.6L M/T Rs. 1,370,000S. Super Saloon 1.6L CNG Rs. 1,450,000

DAIHATSUModel Price

Rs. 7,15,000

Rs. 7,49,000

CX ECO (CNG)

CX AUTOMATIC

Rs. 6,70,000CUORE CX

NISSANS. Super Saloon 1.6L A/TS. S. Saloon 1.6L A/T CNG

Rs. 1,470,000Rs. 1,550,000

NISSAN DIESEL TRUCKSDiesel Truck PKB 211Diesel Truck PKD 411HDiesel Truck PKD 411EDiesel Truck PKD CD 411Diesel Prim e Mover CWM 454

Rs. 3,000,000Rs. 4,150,000Rs. 4,260,000Rs. 4,600,000Rs. 5,500,000

MASTERModel Price

Master Highland M-260 (1,5T) Rs. 625,000

Master Forland Super M-330 (3T) Rs. 699,000

Master Econg M-390 (3.5T) Rs. 930,000Master Grande M-410 (4.5T)

Master Rocket Faw (7.5T)

Rs. 11,30,000Rs. 12,60,000

Master Feng EQ 1061 Strip Chassis Rs. 832,000

Master Feng EQ 1032 Strip Chassis Rs. 832,000

CIVIC VTI Pt Oriel

HYUNDAI

Model PriceACCORD Rs. 5,866,000

CITY I-VETC AT Rs. 1,389,000

CITY I-VETC MT Rs. 1,259,000

CIVIC VTI Mt

CIVIC VTI Mt Oriel

Rs. 1,629,000

Rs. 1,804,000

ACCORD CR-V Rs. 5,316,000

CIVIC VTI Pt Rs. 1,749,000

Rs. 1,879,000

HONDA

Model Price

CHERY QQ

CHERY QQ Petrol Rs. 588,000CHERY QQ CNG Rs. 628,000

LAND ROVERModel Price

Rs. 2,269,431Rs. 2,545,000

Rs. 2,150,260

DEFENDER

(90 S/WJEEP STD)(110 S/W A/C)

(90 Soft Top)

Car / Light Vehicle Price ListCar / Light Vehicle Price List


AUTOMARK | August-2010 4428


Mr. Niazi takes over Charge of CEO, EDB


Thal Engineering celebrated5th Millions

Air-conditioner ceremony

On 1 5 July 201 0 Thai Engineeringcelebrated 5th Millions Air-conditionerceremony andthe Chief Cuest was Mr Hikaru SugiManaging Director Denso Corporationof Japan.

Thai EngineeringThai Engineering is a division of ThaiLimited. Thai was incorporated in 1966as a public listed company and is quotedon all the major stock exchanges ofPakistan.

ProductsAuto Air Conditioners and partsAuto Wiring HarnessesAuto Heater / BlowersAuto Heat Exchangers

Technical CollaborationsDenso Corporation Japan for Car Air-conditioners and Heater / BlowersFurukawa Electric Japan for WiringHarnesses

Mr. Aitazaz A. Niazi, chief ExecutiveOfficer, Engineering DevelopmentBoard (EDB) has underlined the needof foreign investment in the country forcreation of jobs. He was addressingsenior officers of the Board on August17, after assuming charge of the post.He add ed that the f o r e ignmanu facturing units should beencouraged to set up their industries inPakistan as it will reduce their cost ofdoing business due to cheap labouravailable in the country. Another benefitto local industry would be transfer oftechnology and trained manpower, CEOsaid. He directed that problems andissues should be resolved and requiredsteps suggested so that these could be

solved. CEO viewed that the industrycould reduce their cost of productionfor growth in export. He said that thepublic sector agencies have not reachedthe skilled workers in far flung areas ofcountry. With proper guidance they canbe linked with global supply link, headded.Dr. Mohammad Zubair, GeneralManager (Tariff & HR) gave a detailedbriefing to the CEO, on history,achievements, current projects in handsand future programmes of the Board.Mr. M. Farooq Khan, General Manager(Policy) briefed about various policiesdrafted EDB and are under submissionfor consideration / approval.CEO showed keen interest in the current

projects of the Boardand asked searchingquestions.Mr. Niazi has earnedhi s de g r e e i nC h e m i c a lEng ineering fromUnite d S tat es ofAmerica (USA). Hedid his F. Sc fromCadet College hasan Abdal. He hasalmost decades exp er ience ofautomobile business. His appointmenthas been made on contract basis for twoyears, as per notification issued byEstablishment Division on August 16.

Corporate Event - Update

Aitazaz A. NiaziNew CEO, EDB


The dream of Indian people to own thecheapest car is likely to be fulfilled whenthey wil l drive away $2,000 or Rs100,000 Tata’s Nano from July this yearon the most congested and chockedstreets and roads of their country.Can our local assemblers, or any otherprivate entrepreneur or the governmenteither really ponder or feel ashamed onthi s milest one achi eved by ourneighboring country. Will Pakistanisever be able to have a low priced car inyears to come or they will continue torely upon Pak Suzuki Motor Company(PSMCL) for providing so called lowpriced 800cc car which in real terms isno longer cheaper after massive increasein prices in the last one year.The main a im of Tata Motors oflaunching the cheap car for the hugeurban middle class population is tocreate an alternative of two wheelersand a more safer and affordable vehicle.The launch of car was also aimed atshifting those people who can afford tohave Rs 100,000 cars despite the factthat bikes in India are very cheaper ascompared to Pakistan.Irrespective of some demerits of Nanocar like lack of air conditioning, plasticseat covers, no air vents etc in a countrywhere scorching heat takes its toll insummer but one can surely praise theefforts of Tata Motors of rolling outsomething attractive in terms of pricefor their countrymen.

Currently, petrol producers and themarketing companies in India have alsoinitiated hectic media campaign to savepetrol and diesel for the future younggeneration. In one of the electronicmedia advertisements, a boy sitting withhis father next to driving seat stuck in ahuge traffic jam on a main streetwatching all the car engines in startposition, suddenly cautions his dad thathe is thi nking of opening a cyclerepairing shop in future as the boy feelsthat the way the people are wasting fuelthe young generation cannot haveenough petrol to run their vehicles. Thenhis father switches off the engine vehicle.In another media campaign, a petroldealer while filling fuel in a car suddenlysurprises a family by saying that fromnow on there would be 25 per cent offon sale of petrol. The family in the carasks the dealer to repay the balanceamount but the dealer replies inaffirmative saying if a car runs at a speedof 45 km per hour and if the engineignition is switched off on red signalthen it can easily save up to 25 per centof petrol consumption.These are the initiatives being taken bythe petrol producers, oil marketingcomp an ies, Tata an d e ven thegovernment in India which show thatthey are concerned how to save fuel forupcoming generation. In Pakistan, thereis no such kind of campaigns from anypublic and private quarters.It may be recalled here that one of aleading car vendor in Pakistan, Feroz

Khan, had dared to provide inexpensivecar when he launched country’s firstindigenous Revo car, rolled out by AdamMotor Company Ltd (AMCL) in April2005.With the production of Revo in 2005,Pakistan had joined the club of 16countries which produced their owncars. The engine and transmission werethe only sub-assemblies which have beenimported from China. The startingdeletion level was 67.5 per cent whichwas projected to increase 90 per cent byDecember 2007. The project, launchedat a cost of Rs 400 million, had facedsevere financial crunch. Many workershad been retrenched to cut theproduction cost.Revo 800cc was intr oduce d atRs270, 000 (petrol versi on) while1,050cc car was rolled out at Rs379,000.The installed capacity of the plant was15,000 units per year.In 2007, the maker of Revo struggledhard to survive looking for some equitypartners to pull the project out of hotwater, but efforts proved a failure.Despite low price and authorizeddealership network, the design failed toclick the customers perhaps they had abetter option in shape of Japanese carSuzuki Mehran 800cc at that time.Perhaps one of the main reasons of Revocar failure was when the car waslaunched in April 2005, the governmenthad opened the floodgate for used carimports, resulting in import of 46,000

In Pakistan the local assemblers have remained focused in introducing highpriced cars to cater a particular rich segment of the society. Besides, the

Japanese makers, who dominate local markets, perhaps have an understandingnot to roll out low price engine vehicles simultaneously in a market.

India has already launched ‘Nano’ car for $1000, in Pakistan only one Japanesevendor enjoys monopoly on 800cc cars.

There is no car for the lower middle class in Pakistan.

Pakistan needs low-priced cars

continue on next page

by Mohammad Owais Khan

AUTOMARK | September-2010 46

Exclusive Article from Previous Issue


47

cars in 2005-06. At that time a usedMitsubishi Pajero Jeep was available atRs300,000-350,000 then how a newcustomer could trust a home-grown car.However, local vendors had given all-out support to the Revo project. Somevendors had cautioned Mr Khan not totake risk in the volatile Pakistani carmarket by introducing the car from zerolevel (which means that Revo car designdoes not exist in other parts of theworld).Transmission Motor Company (TMC)had also introduced green taxi in thename of Alif Motor Cab in which theprovincia l government had beenproviding a helping hand.The green taxi was fitted with CNG at aprice of Rs200,500 with 200cc four-stroke engine. It was launched in June2006. The company had invested Rs45million in the project and it was rollingout both cars and taxi in collaborationwith China. The deletion level had beenachieved at 70pc as compared to 67.8pcwhen the project was launched in 2005.The car used to run 25 km per litre onpetrol.A leading vendor said that producing acar in Pakistan on the basis of Nanowould be really be a daunting task forany new investor keeping in view variousthings between India and Pakistan likeexchange rate parity, rate of customsduty and sa les tax an d level oflocalization of parts between the twocountries.He said if the same car is launched inour country then it would at least costvery high as one of the main differencesis that Tata has totally produced theengine indigenously in India, while thereis no engi ne producing factory inPakistan. Besides, the Indians are notquality conscious and hence Nano mayprove a revolutionary car for the masses.He recalled that Nawaz Sharif in hisprevious era had also tried to provide acar at Rs 150,000 with the help of aRussian car maker but the project couldnot be material ized as Pakistanicustomers had never liked Russian itemsand there was no expertise of enginemaking fac il it y in the country .He said Pakistani people have a problemfor being very choosy especially in carsas compared to bikes. It is true that lowcost Chinese bikes made on the pattern

of Japanese Honda CDI-70cc have takenthe market by storm due to a big pricedifference. Over 55 makers are rollingout low cost Chinese 70cc bikes andtheir parts and accessories are easilyavailable due to mushroom growth ofits vendors.In cars, the new manufacturers, whointend to launch the low priced cars,must be a very sound party of sustainingshocks of various natures especially intimes of recession and falling sales. Themakers of Revo car might be a bigvendor but he did not have a soundbacking or name of a known partnereither in Pakistan or any of foreigners.People always hesitate in taking a riskof buying a new car with a new nameowing to its low re-sale value andavailability of parts besides they mighthave genuine concerns regarding itsquality and car’s high quality suspensionof bearing the load of passengers indila pidated roads an d esp eciallyreaching the top of any bridges orexpressway.The local people may get some attractionin case manufacturers l ike Toyota,Honda, Hyundai or any other wel lknown European car makers try toventure into Pakistan by introducinglow priced cars. At least customers willhave some mental satisfaction aboutcar’s quality, parts availability and re-sale value even if they have to pay higherprices.People also feel that when they are

paying huge amount in six digits thenthe product should have some worthand be a hi gh quali ty product .Customers can take risk in bikes as itcosts between 38,000 to Rs 63,000(Chinese to Honda 70cc bikes), but theycannot sustain huge loss of rupees inbuying low quality cars.He said that there is a big differencebetween sale volume of India andPaki stan keeping in view of twocountries’ population. In case a newclicks the mind of people then it meansthat its demand will pick up and willhelp in the development of vendingindustr y b esides cr eat ing jobopportunities.In India, Tata is a big name and manypeople have blind trust on its reputationdespite the fact that it is still working torefina nce the two bill ion dollaroutstanding from a three billion dollarbridge loan which the company took topay for the Ja guar-La nd Roveracquisition.Irrespective of big names, many peoplecount road presence of any vehicle whichdefinitely creates a feeling amongcustomers. Chinese bikes are classicexample of massive road presence aspeople switched over from Honda toChi nese bikes in huge numbers.In cars especial ly, people are alsoconscious about branded names. Whensomebody owns an unbranded car likeRevo or others then the person cannotstand tall and justify the qualities of lowpriced cars while chatting with theowners of cars like Suzuki Mehran etcas it excels in quality and high re-salevalue.In Pakistan the local assemblers haveremained focused in introducing highpriced cars to cater a particular richsegment of the society. Besides, theJapanese makers, who dominate localmarkets, perhaps have an understandingnot to roll out low price engine vehiclessimultaneously in a market as only PakSuzuki has been enjoying monopoly in800cc segments. The governmentshould now think of creating congenialbusiness environment by ensuringconsistency in economic policies andfocus on saving fuel. It should encourageEuropean car makers to introduce lowpriced cars rather than relying onJapanese car makers….

Can our local assemblers, or any other private entrepreneur or the governmenteither really ponder or feel ashamed on this milestone achieved by our neighboring

country. Will Pakistanis ever be able to have a low priced car in years to come.

AUTOMARK | September-2010


MADE IN PAKISTAN MOTORCYCLESRETAIL PRICE LIST

70cc Motorcycle

Retail Price

Rs. 42,500/=Rs. 38,000/=Rs. 38,000/=

Rs. 37,000/=Rs. 38,500/=

Rs. 38,000/=Rs. 45,300/=

Rs. 38,000/=Rs. 39,500/=

Rs. 41,000/=Rs. 36,000/=

Rs. 46,000/=Rs. 47,000/=Rs. 41,000/=

Rs. 62,900/=Rs. 40,000/=

Rs. 38,000/=Rs. 37,500/=

Rs. 36,500/=Rs. 38,000/=

Rs. 36,000/=Rs. 40,000/=Rs. 42,900/=

Product &Model Name

Aan AI-70Asia Hero AH-70

Bionic AS-70Champion CDI-70

Crown Lifan CRLF-70Diamond SD-70

Dhoom YD-70Eagle DG-70Ghani GI-70

Guangta GT-70Grace CT-70

Hero RF-70Hero RF-70 Plus

Habib HB-70Honda CD-70

Hi-Speed SR-70Jinan JN-70Leader LD-70

King Hero KH-70Moon Star MT-70

Master MD-70Mehran SD-70

Metro Hi-Tech MR-70

Sr./No.

1.2.

3.4.

5.6.7.

8.9.

10.11.

12.13.

14.15.

16.17.18.

19.20.

21.22.

23.

Product &

Model NameNew Asia NA-70

Pak Hero PH-70Ravi Premium R1

Ravi Hamsafar-70Road Prince RP-70

Royal Star RS-70Royal RL-70Racer AS-70

Safari SD-70Sakai SK-70

Star DL-70Sohrab JS-70

Sonica SM-70Stahlco ST-70

Super Asia SA-70Super Star SS-70Super Power SP-70

Super Power DeluxeToyo TG-70

Target TT-70Unique UD-70

Union Star US-70United US-70

Zxmco ZX-70

Retail Price

Rs. 38,000/=Rs. 37,000/=Rs. 47,000/=

Rs. 43,000/=Rs. 38,000/=

Rs. 39,000/=Rs. 42,500/=

Rs. 39,000/=Rs. 40,000/=

Rs. 39,000/=Rs. 39,900/=

Rs. 41,500/=Rs. 42,400/=Rs. 36,500/=

Rs. 39,500/=Rs. 39,500/=

Rs. 38,500/=Rs. 45,000/=

Rs. 36,500/=Rs. 38,500/=

Rs. 41,000/=Rs. 42,000/=Rs. 38,000/=

Rs. 40,500/=

Sr./No.

24.

25.26.

27.28.

29.

30.31.

32.33.

34.35.

36.

37.38.

39.40.

41.

42.43.

44.45.

46.

47.



MADE IN PAKISTAN MOTORCYCLESRETAIL PRICE LIST

AUTOMARK | September-2010 51

125cc Motorcycle 100cc MotorcycleBrand & Model Name

Habib HB-125Sitara ST-125Ghani GI-125

Hero RF-125Honda CG-125

Honda CG-125 DXMetro MR-125Ravi Storm-125 Euro II

No.1.2.

3.4.

5.6.7.

8.

Retail PriceRs. 88,000/=Rs. 55,000/=

Rs. 52,500/=Rs. 75,000/=

Rs. 84,900/=Rs. 106,900/=Rs. 55,500/=

Rs. 78,000/=

Brand &Model NameAsia Hero AH-100

Ghani GI-100Habib HB-100Honda CD-100

Sitara ST-100Super Star SS-100

Super Power SP-100Unique UD-100

No.1.

2.3.4.

5.6.

7.8.

Retail Price

Rs. 46,000/=Rs. 45,500/=Rs. 55,000/=

Rs. 69,900/=Rs. 51,000/=

Rs. 46,000/=Rs. 45,500/=Rs. 52,000/=

Sr./No.1.

2.3.

Yamaha MotorcycleProduct &

Model Name

Yamaha YD100Yamana Yama4Yamaha YB100 Royale

Retail PriceRs. 72,200/=Rs. 68,800/=

Rs. 68,300/=

Sr./

No.1.

2.3.4.

5.

Suzuki MotorcycleProduct &

Model Name

Suzuki Sprinter ECO

Suzuki Sprinter STD.

Suzuki GS-125

Suzuki GS-150

Suzuki Shogan

Retail Price

Rs. 65,500/=Rs. 69,500/=

Rs. 78,500/=Rs. 84,500/=Rs. 76,000/=


Automark Magazine - September 2010

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