Automark October 2010

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Editorial

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The Magazine for Pakistan Automotive Sector

October 2010 Vol 3, Issue 10

Editor :

Sub Editor :

Contribution Writers :

Advisor :

Circulation Manager :

Designed By :

M. Hanif Memon

Dr. Raja Irfan Sabir

Mohammad Owais KhanSamiullah KhanEngr Khurram MateenOmar Rashdi

J. PereiraAbdul Majeed Sheikh

Abdul Khaliq

Mustafa Hanif

MONTHLY

The decision of increasing mark-up rate by 0.5percent has been taken at a very wrong time astrade and industry are facing multiple challenges

including war against terror, deteriorating lawand order situation, political instability, energyshortage and high input cost.

"The increase is not just of 0.50 basis points,State Bank has increased one percent from 12.5

to 13.5 percent in just two months. Therefore,this increase is actually of eight percent, a hugejump in just two months. As a result, all time

high inflation in the country will further increasefrom average inflation rate of 13.25 percent to14.5 percent. Already, Pakistan is amongst the

seven countries in the world where inflation isover and above 15 percent. In the month of Julyand August, inflation jumped to 29.9 percent

which is the highest in the country in last 30years."

Business community was hoping that GovernorState Bank of Pakistan, Dr. Shahid Hafeez Kardarwould take measures to provide some relief to

the crushed industry as he, himself, is of theview that mark-up rate should be brought downto single digit but on the contrary, he has

increased it.

Now, in the modern world, the new concept is

to pump in more and more supply of moneyinto the system by slashing mark-up rates inorder to control inflationary pressure on the

economy.

Therefore, we would strongly recommend

Governor State Bank to immediately reviewincreasing of mark-up in order to save thealready floating and thousands of jobs, already

at risk due to the prevailing economic situationin the country.

Increase in markup ratetermed anti-industry

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CONTENTS

Japanese motorcycle assemblers restart pushing 9-10up the prices on weakening of the rupee against the YenExclusive Article on Motorcycle sector

Used car dealers claim that decision on used 11-12car rules is still hot and may be taken in thenew Trade PolicyExclusive Article on Car Sector

Pak Suzuki, Honda Atlas and Toyota increase prices 13

Does low price motorcycle means lowquality by some new assemblers? 14-15Exclusive Article on Bikes Quality Issues

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

FPCCI, KCCI flay raise in power tariffs 22

Workshop on Costing and Pricing 23

How India beat China in auto exports 36

Local assembled car price list 40

Used car prices 41

Indus Motor holds 19th 45Annual Dealer Conference Corporate Event

Total QualityManagement VS Six Sigma 46-47Exclusive Article by Khurram Mateen

Hybrid / Electric Car 49Exclusive Article by by Omar Rashdi

Motorcycle price list 50-51

www.automark.pk


AUTOMARK | October-2010 09

In a country where cartelization andmonopoly of the companies exist in abig way, a tradition has been going onthat the markets’ old players try everything at various levels to restrict thearrival of new competitors. They inconnivance with the bureaucracy andgovernment officials create problems toaffect the working of the new comers.It can be said here that the Japanese carmakers virtually enjoy a monopoly hereand only one Korean company wasallowed to enter in Pakistan but it hasbeen suffering very badly here in termsof losing sales and also financially.A number of global car makers who alsoproduce small engine cars have enteredIndia thus giving a tough competitionto the existing players besides providingan open option to consumers to choosethe cars as per their pocket income.In Pakistan Pak Suzuki enjoys amonopoly in 800cc for more than twodecades and consumers are still driving1990 Mehran model in 2010 with slightchanges in front grill, head light, bumperetc instead of witnessing a whole newshape.No new company has been allowed totake plunge in Pakistan. Even PakSuzuki has some competition withHyundai Santro (already in hot waters)and Daihatsu Cuore which is losing salesto Suzuki Cultus and Alto and toimported used cars.Pak Suzuki’s venture of 1,300cc hadalready failed in various models like

Baleno and now in Liana and fromNovember 2009 Swift was launched totest the consumers’ taste.There are a number of European andChinese car makers who had showninterest in Pakistan but could not landhere due to various reasons.The government few months back hadfinally realized that the country needssmaller car assemblers. The EconomicCoordination Committee (ECC) of theCabinet has approved removal ofconditions on new entrant of having500,000 units in production in countriesother than Pakisstan.In case of car, the new entrant will nowhave 100,000 units annual in countriesother tha n Pakistan. For localmanufacturers/joint ventures the targetof 100,000 car will be achieved withinthree years from the date of operationsubject to prescribed internationalstandards. Moreover, there will be noother restriction on setting up newindustries in automobile sect or .It is a good step that the governmentshould have taken 10 years backs tobreak the monopoly of Mehran 800ccand also to curb imports of used carsthat could have not drained out preciousforeign exchange.It is to be seen how foreign car makerssee this government’s initiative to allownew assemblers in broader perspectivein a market where consumers had beenaccustomed of Japanese cars becauseof its quality and durability.

Japanese motorcycleassemblers restart pushingup the prices on weakeningof the rupee against the Yen

Many people think that some kind of newpolicy or measures should be unveiled bythe government so that consumers could

see a drop in Japanese bike prices.

Exclusive Article by Ali Hassan

continued on next page



Many people think that some kind ofnew policy or measures should beunveiled by the government so thatconsumers could see a drop in Japanesebike prices.For instance, a leading Japanese bikemaker has been in forefront to hit theChinese bike industry in order resumeits monopoly in the 70cc bike segment.Despite all odds, the Chinese bikemakers have succeeded in creating aniche in the market through their lowprice bike.Chinese motorcycle makers say that theprice bei ng charged by a leadingautomobile giant (both in car and twowheeler business) has been the highestin the country if compared with othercounterparts like Chinese and Japanesebrands producers. But this practice hasbeen going on for years and thegovernment has yet to take any notice.They express surprise that what is morespecial about this Japanese player thatthe government has never tried to askthe assembler for charging higher prices.Vice Chairman Association of PakistanMotor cy cle As se mblers (APMA)Mohammad Sabir Shaikh has raisedfour points about a leading businessgroup who produce Japanese assembled70cc bike.One is that the group is the producer ofmost costly bikes in collaboration withHonda of Japan while Chinese bikes ofalmost same models are selling at muchlower prices.The group is also rolling out the mostexpensive cars (Honda Civic and City)while the price of Toyota and Suzukicars are comparatively lower thanHonda cars.The same group, Sabir says, also sellscostly spare parts while the same partsproduced by other companies areavailable at low rates. Atlas Group isalso a big importer of costlier imported

parts from various countries includingJapan.Atlas Honda has enhanced the price ofCD-70, CD-100, CG-125 standard andCG-125 Delux by Rs600 to Rs2,000.Now the CD-7 0, CD-1 00, CG-125standard and CG-125 Delux are nowpriced at Rs Rs 63,500, Rs 70,900, Rs86,500 and Rs 108,900 respectively.CG-125 Delux has remained the highestpriced motorcycle in Pakistan’s historyand in 70cc segment, the Honda CD 70excels due to its price as compared toother 70 CC models whose price rangesbetween Rs 40,000 to Rs 45,000 (allare Chinese affiliated bikes). One caneasily buy a car at Rs 100,000 if theprice of CG-125 Delux is taken intoaccount.Sabir says that assemblers of Japanesemotorcycles have increased prices dueto weakness of the rupee against dollarand Yen, which made the imported partsdearer amid slight increase in steelprices.The prices of YD 100cc Junoon,YD100cc Yama 4 and YB 100cc Royale,produced by DYL Motorcycles Limited,have been raised to Rs73,300, Rs69,900and Rs70,000 from Rs72,785, Rs69,363and Rs68,850, respectively.The company has, however, kept therate of YD-70 Dhoom unchanged atRs45,300. Dhoom is being produced incollaboration with the Chinese principal.Consumers are surprised over thefrequent increase in Japanese bike priceswhen two leading assemblers haveachieved over 80 per cent deletion leveland also in engine comprising 80-90per cent locally produced parts.“If the Chinese bike makers would havenot entered in the market then theHonda CD-70cc would have cost theconsumers over Rs 80,000 due to themonopoly of a single market player,”Sabir said.

APMA vice chairman hadalready disagreed that

engine comprising of over80 per cent parts are beingproduced locally. He hadalready sought details of

parts makers from the EDBon this issue.

Why localization is notincreasing in Pakistan.

He said the main bottleneckis the EDB which does not

issue the IORC to thevendors and assemblers

under SRO 655/656.

Sabir Shaikh said that theChinese bike makers had

still not increased theprices and the assemblersare not ready to raise any

price.

It is to be seen howforeign car makers see

this government’s initia-tive to allow new

assemblers in broaderperspective in a marketwhere consumers had

been accustomedof Japanese cars because

of its quality and durability.

continued on page no.22

Exclusive Article



The car makers must have taken a sighof relief now after reports that thegovernment is unlikely to allow used carimports. Reportedly, the governmenthas realized that any such move willhave a negative impact on revenuecollected from the local automobilesector.Addit io na lly , the Enginee r ingDevelopment Boa rd (EDB), afteranalyzing the data provided by local automanufacturers, has observed that priceincrease is mai nl y due to rupee-dollar/yen parity and the overallinflation that has increased the fixedcost element of the industry. Besides,under utilization of capacity is anotherreason for price hike.Under the current import policy, three-year old cars can be imported which arein fact four-year old, given the one yearregistration peri od. The impact ofimport relaxation on Pakistan's economyis about Rs 14. 4 billi on and, if thegovernment extends the age limit ofimported used vehicles, it would sufferan additional revenue loss estimated atRs 1.5 billion, or a total of Rs 15.8 billion.Further, there would be an additionalforeign currency outflow on purchaseof used cars, especially when the countryneeds to conserve foreign exchangereserves.However, the importers of used car, whoalso lobby through various sources inthe government circles, are of firmopinion that the issue of used carimports or relaxation in rules of used

car imports is stil l under ac tiveconsideration and any thing couldhappen.Some analysts think that one thing iscertain that the powerful car makers areunlikely to reduce prices as previousconcerns shown by Prime MinisterYousuf Raza Gillani asking car makersto reduce prices have failed to prove anydesired results. Even the Ministry ofIndustry and Production Minister MirHazar Khan Bijrani had said in middleof May that the Cabinet had takenserious notice of increase in car pricesof locally assembled cars. But now itseems that these sort of light warningsto the cartel of car assemblers haveremained a routine exercise of topgovernment officials just to show howmuch they care about the concerns ofgeneral public.Due to lack of government’s seriousnesson various issues, stakeholders in carindustry are fully utilizing the situationby keep pushing up the prices of cars.Even the government is least concerned

in taking serious notice of price hike infood items, leaving the consumers at themercy of wholesalers, manufacturersand retailers to make windfall whenliterally no government machinery isout there to regulate and monitor prices.The assemblers have come out withanother increase in car prices inSeptember linking the hi ke to theweakening of the rupee against majorcurrencies especially the Yen. Has thegovernment ever checked the realimpact of currency difference on thecost of car production? Why thegovernment has been showing lethargicattitude in taking to the task to theas sembler s for their fa ilure inlocalization of hi-tech engine partsdespite their fir m commitment .Many market people feel that the issueof rising production cost on the pretextof rupee-yen parity has been debatedtime and again and its solution is toopen used car imports in order to createcompetition and provide choices to theend users.Some feel concerned that opening usedcar imports would actually benefit theused car dealers only in an unregulatedmarket where malpractice is rampant.One way to bring down car prices is tolower the import duties on partsespecially the hi-tech engine parts.Meanwh ile, according to officialdocuments and sources in Ministry ofIndustries and Production (MoI&P), theEconomic Co-ordination Committee(ECC) of the Cabinet in its forthcoming

Used car dealers claimthat decision on used

car rules is still hot andmay be taken in the

new Trade PolicyNo plan in sight to relax rules on used carimports. Govt is still taking car price hike

issue by assemblers very lightly.

Exclusive Article Mohammad Owais Khan




meeting is expected toapprove changes in the'transfer of residence',g ift an d p e rso nalbaggage schemes forimport of used/second-hand cars.The incumbent ChiefExecutive Officer (CEO)of the Eng ineeringDevelop ment Boa rd(EDB), Ayaz Niazi, wasco-accused in the BMWcase . M inistr y o fCommerce is resisting any role ofIndustries Ministry in the transfer ofresidence, gift or personal baggageschemes as these schemes are in thejurisdiction of Commerce and are verymuch part of Trade Policy 2010-11.Sources said that pursuant to the ECCdecision of July 1, 2010, the EDB gavea presentation to the Deputy Chairmanof Planning Commission about itsfunctioning and contribution towardsautomobile industry. Representativesfrom the Ministry of Commerce, FederalBoard of Revenue (FBR), Board ofInvestment (BoI) and National TariffCommission (NTC) were also present.With regard to the ECC decision thatthe gove rnment should e ns ur econsistency in its policies on deletionprogram in the automobile sector, it wasagreed by the participants that reductionin tariff on import of new cars (in CBUcondition) may not be an effective toolfor reduction in prices of new cars dueto huge price gap between the importednew cars and locally assembled new cars.Similarly, downward revision of tariffon CKD kits from current 32.5 percentto 30 percent as per AIDP would havenegligible impact as far as reduction inprices of locally assembled new cars isconcerned.Wh ile r eite rat ing government'scommitments to follow AIDP in its truespirit, it was agreed by the participantsthat the only effective way to ensurereduction in prices of locally assembled

cars is to modify the schemes concerningimport of used cars, viz, transfer ofresidence, gift and personal baggagescheme, so as to ensure a competitivemarket for the local ind ustry.Accordingly, the Ministry of Industriesand Production proposed to the ECCthat the age limit in respect of importedused cars up to 1,000cc be enhancedfrom current three years to four years,considering the narrow price gapbetween used imported cars of 1,000ccand Pakistani used cars of si milarcapacity. The price gap between 1,300ccimp orted an d local used cars issubstantial; therefore, the age limit ofimported used cars exceeding 1,000ccis expected to be increased from existingthree years to five years.The MoI&P considers these proposedmeasures not only foreign exchangeneutral but able to ensure availability ofreliable cars to the consumers ataffordable price without disrupting themarket of locally made used cars.However, it will be a huge task for thegovernment, especially MoI&P, toensure quality, safety and after saleservice of imported cars.The ECC, in its meeting on July 1, 2010after detailed deliberations on asummary of Ministry of Industries andProduction (MoI&P) titled 'rationalizingthe prices of locally manufactured cars'took the following decisions;(i) approved removal of condition on anew entrant of having 500,000 units in

production incountries otherthan Pakistan; thenew entrant wereto be allowed100,000 unitsannual productionin countries otherthan Pakistan. Forlocalmanufacturers/joint ventures thetarget of 100,000cars was to be

achieved within three years from thedate of operation subject to theprescribed international standards.Moreover, there was no other restrictionon setting up new industries inautomobile sector;(i i) ECC deferred decision on theproposals regarding reduction in tariffon import of new cars as wel l ascommercial import of three-year oldcars;(ii i) Minist ry of Industr ies an dProduction was to submit a summaryto the next ECC meeting.The auto industry ent ered into"Development Phase - 2005-2012"where the consolidation of initialachievements commenced alongside thedevelopment of strategy to shape theindust ry in the new competitiveenvironment.The deletion program, based onGovernment of Pakistan's agreementwith World Trade Organization (WTO)on Trade Related Investment Measures(TRIMS), was done away wi th. Acompli ant system was introduced,named Tariff Based System (TBS) fromJuly, 1 2006.Under the TBS, assemblers have thechoice of buying components at mostcompetitive price, quality and improvedsupply chain ie techno economic basis.TBS supported FBR in receiv ingpenalized duties (50 percent under SRO693) instead CKD duty (32.5 percentunder SRO 656) promptly at the time

Many market people feel that the issue of rising production cost on thepretext of rupee-yen parity has been debated time and again and its solution

is to open used car imports in order to create competition and providechoices to the end users.

Some feel concerned that opening used car imports would actually benefitthe used car dealers only in an unregulated market where malpractice is

rampant.


Exclusive Article


of import and there was no need to waitfor a minimum of one year, the timerequired for EDB Audit, customs dutyas sessment and OEMs pay ment.As per EDB record, auto assemblersincreased their plant capacity from93,000 cars during 2001-02 to 341,000cars during 2009-10.These assemblers also developed vendorcluster of over 800 registered localvend ing uni ts with high level ofte c hn ol o gy t r ans f e r , human

development and training. Moreover,these assemblers financially supportedlocal vendors for asset building andtechnology transfers.Under ISDP, there were three categoriesfor deletion targets: Category A, the partswhich are successfully localized by atleast one assembler like interior partsand assembling facility; Category B,parts which may be localized andtechnology is either available or easy totransfer some electrical parts; Category

C comprised of non-deletable partswhich are either capital-intensive orwherein technology is not available e.g.engine, body, power train and chasis,etc. However, the assemblers alsolocalised Category C parts, on technoeconomic basis investment of over Rs20 billion in press shop for body partsby all auto assemblers is an evidence oflocalization by OEMs....

Two local car manufacturers– PakSuzuki Motors Co Ltd and Honda AtlasCar Pakistan Ltd – have increased perunit prices on their different models,according to a letter of the companiessent to authorised dealers.“The decision to increase prices ondifferent models of Suzuki and Hondahas been implemented from September18”, said an authorised dealer. “Both thecompanies, however, gave appreciationof yen against rupee as a reason for thisincrease in prices.”He said Pak Suzuki and Honda Atlasissued a lett er to their respectiveauthorised dealers to increase thebooking price from Rs 8,000 to Rs15,000 on different Suzuki models, whileHonda has increased prices by Rs30,000 per unit on all models of HondaCivic and Rs 35,000 of Honda City.Authorised dealers said the companieshave taken this surprise decision justafter the devastating flood has ruined amajor part of the country. They also saidthat surprisingly high premium is alsobeing charged on almost every vehicle.According to new price list, Mehran800cc would be booked at Rs 539,000after an increase of Rs 8000-10000,

Alto VX 1000cc at Rs 692,000 after anincrease of Rs 10000 to Rs 12000.Similarly, the company has set price ofCultus VX at Rs 878,000 after anincrease of Rs 12000 to Rs 15000.Honda Atlas has raised prices by Rs30,000 on every model of Honda Civicand Rs 35,000 on Honda City.The latest f igu res by Pakis tanAutomotive Manufacturers Associationrevealed that the car sales in Augustincreased by a minimal nine percent to19,625 units as compared to 17,950 unitsin the corresponding period of last year.Analysts have forecast that the autosector may show dismal performanceahead as the floods would lead todepressed sales in the coming months.H.M. Shahzad, chairman of the AllPakistan Motor Dealers Association,crit icised the decis ion b y carmanufacturers to increase prices andsaid the federal government should takeserious not ice of the prevai lingmonopoly of local car manufacturers.He said prices of al l vehi cles aredeclining in international markets,including Japan and Korea, but pricesin the country are increasi ng. ...

AUTOMARK | October-2010

Pak Suzuki,Honda Atlas

increase pricesThe Indus Motor Company (IMC) has

announced an increase in the prices of

Toyota cars, according to a press releaseissued by IMC. The price of a Corolla

has been increased by Rs25,000 and the

price of an Altis has been raised byRs35,000.

Analysts cited the appreciation of the

yen against rupee and the increase inp r i ce s o f r aw mate r ia ls f or

manufacturing parts as the reasons for

this price increase. The yen hasappreciated by eight per cent against

r upee si nce February thi s ye ar.

“The appreciation of the yen againstrupee will affect the entire automobile

sector and other anciliary companies

will follow suit in raising their prices,”said Furqan Punjani, an analyst at

Topline Securities.

He added that companies which aremore localised in their production

processes will delay price increases but

the increase itself is inevitable. However,the price increase should not affect the

sales of Toyota cars for now since “those

who buy a Toyota will not be deterredby the price increase,” said Punjani.

The company had not increased the

price of its cars till now in spite of theconstant yen appreciation, the press

release said, adding that the automobile

industry is struggling in Pakistan andthe floods only added to its woes by

restricting demand.

The press release informed that thosecustomers who booked their purchases

before this announcement will pay the

previous price and the company willabsorb that loss.

Toyota pricesincrease

Automotive Sector - Update

13


Perhaps Pakistan is the only countrywhere there has been no follow up strictchecking on the qual it y by thegovernment on the products aftercoming out from the factories in themarkets and some low-priced Chinesecum Pakistani motorcycles also falls inthe same category.On the launching of the product beforehuge print and electronic mediapresence and costly advertisementcampaigns, some assemblers might havemaintained the quality after the launchbut some of them have lost theconsumers’ confidence on the groundof deteriorating quality and they alsolost there market due to bad quality.Currently there are hardly three Chinesecum Pakistani bikes which enjoy theirlarge sales because of their famous brandname and after sales value otherwisemajority of the assemblers are just stillrolling out their models in very lownumbers just to stay in the market.Because they have invested millions ofrupees on the projects for motorcycleassembling if they closed there businessthey lost huge amount in shape ofinvestment in the factories. Many afterfailing to survive because of their poorquality and high cost of production havepacked up their business.Smelling a big boost in demand and

sal es , some market people andmedium/large business groups, alreadyrunning and having surplus money inother businesses like sugar, foam, hotel,fan etc, have plunged in the bikeassembly business without having anyprior technological knowhow andexpertise in two wheeler engineeringbut on the basis of putting their profitsmade in other business and furtherputting in more profitable venture. Inpast four Japanese assemblers also aresame category and they also did not hadany automobile experience.Irrespective of the renewed moneymaking interest of new stakeholders inthe bike business – the ultimatebeneficiary of new investments were thelow income group people who went wildfor low cost bike launched at Rs 32,000-34,000 as compared to over Rs 71,000price of Honda CD 70cc in the year 1999-2000.A leading Japanese bike maker literallyused to enjoy a big share in 70cc whenthe overall bike sales in the country wereless than 100,000 units a year. If SME’sof motorcycle assembling did not startproduction in the year 2001 the leadingJapanese bike makers will sell theirproducts 70cc more then Pak Rupeesone lac.Despite achieving a towering success of

producing 1.38 million bikes in 2009-2010 as compared to 917,628 bikes in2008-2009 both Chinese and Japanese,no serious efforts have been made tomaintai n and check the quali ty.However, the price of Chinese bikes hasbeen not been increased the way theJapanese bike makers ha ve beenpushing up on the back of falling rupeevalue of the rupee against variouscurrencies.C ons umer s app ear sa t isfie d inpurchasing good quality low pricedmotorcycles in different areas of thecountry from the different brand names/ assemblers. Some assemblers areselling there product in some areas ofthe country and the other assemblersare selling their product in the otherareas of the country.In Pakistan usually a product is launchedwithout any planning but after salesservice and quality issues are literallyignored by the producers despiteachieving volumes. The quality declinesas the volumes soar. If small companieswill try to achive high volumes definitelyquality wi ll go down without anyplanning and investment in shape ofafter market.“The increase in volumes of sales ofChinese bikes does not mean that bikesales have swelled because of quality but


Consumers complain about quality andafter sales service of some Pakistani made

new comers of low-priced motorcycles

Does low price motorcyclemeans low quality bysome new assemblers?

Exclusive Article by Team Automark

continued on next page14



actually the low price as compared toJapanese bike Honda 70cc is the mainreason.”Chinese bikes are not popular in ruralareas because so many companies donot have after sales service all over thePakistan and also lack quality anddurability as compared to Japanesebikes. Growers usually purchase costlyJa pan ese bike before and afte rharvesting good crops but they lack anytrust on Chinese bikes as they needtough bikes to run at the depleted roadsand passages in the rural and aroundcrop producing areas.Mohammad Arif, who works in privateoffice, said he had a very bad experienceof buying a popular Chinese brand likelow quality parts, head lights, seal andfront and rear needles (rim) and seats.He said he had also approached thecompany and Pakistan Standards &Quality Control Authority and EDB butcould not get the desired results.Mr. Qamar Ahmed, another Chinesebike buyer, said that he faced problemsof low qualit y shocks and enginevibration after six months of purchase.The products producer informed himthe name of vender who supplied shocksto them.Buyers said that the after sales serviceis not available at the showrooms butbuyers have to rush to other areas whereauthorized dealers look after the bikeafter purchasing. Sometimes it takes toomuch time as these dealers get involvedin other bikes while dealing our problem.“We cannot compare Chinese bike withHonda or other rivals. So it is better tohave Chinese bike in view of its lowprice,” remarked another student.In the period of dominance of Japanesebikes, there were very low number ofstudents and boys of 20-25 ages whocould own (either any sources of income)of Japanese bikes. Situation has changedand now these group of ages are themain buy ers of C hi nese b ike s.For the last one or two years, theseyoung generation have been seen doingdare devil activities especially on the bigmain roads and Liaquatabad Fly over.After purchasing bike they change thehead of the engine to improve the enginethrust and speed. These activities (sometimes resulting in big accidents) hademerged because of bike affordabilityand these acts were not visible few yearsback in the era of Japan ese bike

monopoly.Dealers said after the arrival of Chineseparts, the quality of Honda CD 70cc isnot up to the mark if compared with itsmodels of early 1990s. They said thatearly 90s models were really tough asconsumers use to face problems after10 years of their purchasing and eventhese bikes are still running on the roads.Dealers said that for the last four to fiveyears, the quality and durability ofHonda bikes have dwindled. It seemsthat higher localization of parts meanslow quality as Honda having higherimported parts in 80s and 90s weremore durable than the currentlyproduced Japanese bike.Japanese bikes have attained a deletionlevel of 65-75 per cent while two leadingcompanies claim to have been producingengine locally comprising of 60-75 percent locally produced parts. However,Chinese bike makers did not agree withthis.If the Japanese bike comprise of 65-75per cent engine parts then why thesebikes are costlier and their assemblerstaking the excuse of weakening rupeeagainst various currencies had beenpushing up the price on changes incurrencies parities.Some bike makers are using enginecomprising 50-60 per cent locallyproduced parts while others areassembling engine after procuringimported parts. Some are assemblingengine after through smuggled parts.Association of Pakistan MotorcycleAssemblers (APMA) had already takenup the issue wi th the EngineeringDevelopment Board (EBD) seeking listsof those vendors who are making engineparts locally so that bike makers couldfulfill the task of making Made inPakistan 70cc bike engines.Coming back to Chinese bike quality,many consumers feel that if they couldrun the Chinese bike for four to fiveyears without any problem then theywill be happy enough. However, theselow priced bikes cannot be used roughlyas comp ared to Japan ese bikes.However in majority of cases, consumersstart feeling problems either soon afterpurchasing Chinese bikes or after six toone year time. Many consumers, havingcash problems try to maintain the bikeby continuously putting up money onits mai ntenance or removing theproblem while others after losing hope

switch over to used Honda CD 70 or tryother Chinese brands.Contrary to the after sale and qualityproblems faced by the consumers afterpurchasing Chinese bike, one thing iscertain that the entry of Chinese bikemakers had opened new job venuesbesides expanding the vendors’ base andinvestment in the country. One can saythat bikes’ population some times lookmore than human and car populationespecial ly on the Karachi roads.In a country where population is risingand ha ving no authentic data ofpopulation (sometimes exceeding 160mill ion), the number of motorcycleassemblers including three Japanesebike makers have reached over 60 unitswhile many are in the pipeline. One ofthe Japanese bike assemblers also startproduction of 70 cc motorcycle with theaffil ia tion of Chinese princip les.Rising number of bike makers haveneither not resulted in price decline norcreated any sort of competition for thebenefit of general public. Instead onecan say that another monopolizedculture in shape of Chinese bike makershave cropped up of maintaining auni form rate of bikes by al l theassemblers. Perhaps that is because ofpurchasing the parts and accessorieswith the vendors who are feeding all theassemblers. Those assemblers who areinvolved in under invoicing in parts andusing smuggled parts have also kept theprice at par with assemblers who arepurchasing parts from the local vendors.Now a days the minimum cost ofChinese 70cc motorcycle is Pak Rupees35000/ if any assemblers sell thereproducts less then this amount how hewill run his factory?The government especially EngineeringDevelopment Board, PSQCA & FBRshould initiate an enquiry over the fallingquality of bikes and restrict issuing freshassembly licences to the new entrantsas over 60 bike makers were enough forthe limited population if compared withChina and India.Instead of counter checking the qualitythe government departments usuallyindulge in bad practice of demandingmoney or other financial incentives afterpressurizing the low cost bike makersby creating bureaucratic hurdles.....

Exclusive Article

15



HDIP has been denied the right ofinspecting CNG st ations desp itenecessary expertise while Ogra, whichlacks technical expertise, is empoweredto ins pect CNG ins ta llations byoutsourcing to private sector companiesat a cost of Rs 6 to 7 million per month.Petroleum Ministry has moved asummary to the ECC, recommending todivide inspection work on 60:40 basisbet ween Oi l and Gas RegulatoryAuthority (Ogra) and HDIP respectively.Og ra stop ped outsourcing C NGinspection task to HDIP in October2009.Sources said that Ogra was willing togrant 20 percent CNG inspection rightsto HDIP but Petroleum Minister NaveedQamar intervened and the PetroleumMin ist r y mo ve d a summar yrecommending 40 percent inspectionrights to HDIP.HDIP has recommended doing awaywith the role of private companies ininspection of CNG installations entirely.The regulatory, technical and safetyinspection is essentially a job for publicsector agencies like HDIP, but the ECCin 2006 also allowed private sector entryinto the field.Accordingly, Ogra inducted two privatecompanies for this activity and dividedthe inspection work on 60:40 basisbetween HDIP and private companies,which reduced HDIP's revenue stream

proportionately. Sources said that Ograhad prescribed an agreement, to besigned by Ogra and HDIP, which was toplace HDIP on the same pedestal asprivate companies.The agreement had provisions for (i)Performance guarantee of Rs 1 millionfrom a scheduled bank (Clause 8); (ii)only two years contract, extendable foranother two years entirely at thediscretion of Ogra (Clause 3); (ii i)dis cretionary powers to Og ra toterminate agreement any time duringthe subsistence of the agreement withoutassigning any reason (Clause 12); and(iv) power to Ogra to interfere inassignment of personnel by HDIP(Clause 9).Analysts noted that these provisionswere highly asymmetric for a publicsector organisation like HDIP that hadbeen established by an Act of Parliamentfor the specific purpose, inter alia, toconduct inspection of CNG industry,testing, equipment approval, technical

advice, etc.The agreement was considered by theHDIP Board on October 3, 2009, andwas not endorsed. The HDIP hadintroduced CNG as motor fuel inPakistan and devel op ed highcompetence in CNG technology withnation-wide infrastructure for thedevelopment, safety and technicalinspect ions of CNG industry inaccordance with rules and regulations.The HDIP has been performing thefunctions of Third-Party Inspectors(TPI) for the CNG Industry Regulator,ie, initially for the Ministry of P&NRand then for Ogra.Central Chairman of All Pakistan CNGAssociation, Ghyas Paracha, alleged thatOgra had stopped assigning the task ofCNG installation inspection to HDIPsubsequent to receiving complaintsagainst its officials. He said that CNGstation owners had approached HDIPto address their concerns against HDIPofficials but no action was taken."CNG stations owners then approachedOgra to take action and HDIP wasstopped from inspecting CNG stations,"he said, adding that Ogra assigned CNGinspection task to private companies,which also failed to provide qualityservice. He said that both privatecompanies and HDIP should be engagedin a bid to give a choice to CNG industryto opt for one or the other.....

CNG stations inspectionECC may grant 40 percent

rights to HDIPThe HDIP had introduced CNG

as motor fuel in Pakistan and developedhigh competence in CNG technology with

nation-wide infrastructure for thedevelopment, safety and technical

inspections of CNG industry in accordancewith rules and regulations.

Fuel & Energy - Update

16



It was mandated to protect the publicinterest while respecting individualrights and provide efficient regulations.Under the Ogra Ordinance 2002, thefederal government assi gned to itfunctions for the regulation of activitiesrelating to liquefied petroleum gas (LPG)and compressed natural gas (CNG)sectors.In theory, it should regulate oil and gasbusi ness in public interest in anautonomous and quasi-judicial fashion,independent of other branches or armsof the government.In recent months, however, the Ograhas become controversial. One of itsmembers, having more than 30 years ofexperience in oil and gas sector, recentlyr esigne d and is now se ek inginvestigations into violations of PublicProcurement Regulatory Authority rulesand the government’s approved policyputting a ban on setting up of new CNGstations due to acute gas shortages.In a letter to the prime minister,provincial governments, secretaries ofpetroleum and cabinet and directorgeneral of Inter Services Intelligence(ISI), the Ogra’s former member (Oil)Dr Ilyas Fazil has sought investigationsinto three particular issues. An officialat the petroleum ministry said theallegations by the former Ogra membercould not be simply ignored but it wasup to the cabinet division to decide.He said the prime minister had imposeda ban on CNG stations in March, 2008,saying, “New CNG licences in thepipeline be held up. CNG connectionsshould not be given except to those whohave already imported CNG machines.”The directive said: “No new provisionallic ence be issued which enables aninvestor to undertake construction,import machinery or apply for variousNOCs etc.”

To set up a CNG station licence, theinvestor has to obtain various NOCsfrom the district authorities as well asa certificate from the Chief Inspector ofExplosives for the site in question toensure safety standards. A licence for aCNG Station, therefore, is site-specific.Since the ban, a number of attemptswere made by unscrupulous elementsto bypass procedures to obtain licencesdespite the ban, especially by thosewhose provisional licences were issuedprior to the ban but for some reasoncould not complete the requiredformalities for obtaining formal Ogralicence and then ‘sell’ it to a third party.One novel way to bypass the ban was torequest for change of site, under thesame provisional licence. Since changeof site meant a new site, and in turnmeant a fresh licence, all these attemptswere successfully thwarted by Ogra tillJanuary 2010, saying, change of sitecannot be allowed under an existingprovisional li cence. On the sameprinciple, Mr Fazil claimed the Ogradisallowed a change of site requested byMNA Mian Riaz Hussain Pirzada (forChaudhry CNG Station, Hasilpur City,District Bahawalpur) on January 13,2010.However, a letter originating fromwithin the Prime Minister’s Secretariaton February 11, 2010, based on therequest of the same MNA asked Ogra to“revisit its policy related to change ofsite”. As the secretariat had issuedstand ing ins tr uct ions to ver ify

authenticity of PM’s letters in case ofdoubt, two Ogra members soughtclarification in the matter, afterdiscussing it wi th the chairman .Mr Fazil said the chai rman Ogra‘illegally’ ordered in May 2010 an inquiryfor seeking clarification from the PMalthough the law did not allow thechairman or members to pass decisionsagainst each other and any violation hasto be proceeded against for misconductby the Feder al Public S erv iceCommission.On a complaint to the prime ministerthrough the cabinet division, the twoOgra members requested proceedingsagainst the chairman and a member. Hesaid the secretary cabinet desired toresolve the matter without involving theprime minister.In the meanwhile, he said the Ograchairman allowed through his castingvote to allow change of site in violationof the March 2008 ban.The former member (Oil) also allegedthat Ogra, in spite of having a full-fledged legal department manned byfull-time lawyers, has during the last 3-4 months, engaged outside counsels and,mostly from outside the panel of lawyersapproved by the Authority. “This ventureof patronising favourites and friends hascost the organisation almost Rs6 millionin this short period, which is almostequal to the total amount spent on thisaccount since Ogra’s inception eightyears ago.In his letter to the prime minister, MrIlyas Fazil has also said that the cabinetdivision while seeking fresh applicationsfor the appointment of member oil, hasrequired under the Ogra Ordinance that“No person shall be appointed by thefederal government as a member if hehas any direct or indirect financialinterest in or has any connection which

The regulator under cloudsThe Oil and Gas Regulatory Authority was

set up in 2002 to foster competition,increase private investment and ownership

of the midstream and downstreampetroleum industry.

Oil & Gas - Update

21


However a Japanese bike maker believesthat if the level of localization in bikeindustry would have not been at thepresent high level of 80 per centincluding locally produced engine parts,then the prices would have gone upmuch higher.APMA vice chairman had a lreadydisagreed that engine comprising of over80 per cent parts are being producedlocally. He had already sought detailsof parts makers from the EngineeringDevelopment Board (EDB) on this issue.Why localization is not increasing inPakistan. He said the main bottleneckis the Engineering Development Board(EDB) which does not issue the IORC(Input Output Ratio Certificate) to thevendors and assemblers under SRO655/656.Pak Suzuki Motor Company Limited(PSMCL) has also increased the pricesfrom Sept 29, for its models like GS-150, GS-125, Sprinter and Sprinter ECOto Rs86,000, Rs79,900, Rs70,000 andRs67,000, showing a rise of Rs500 toRs1,500.Earlier, the bike makers had raised theprices few months back after theincrease in sales tax rate to 17 per centfrom 16 per cent followed by increase inprices of imported and local parts.There is a marked increase in prices oflocally made bikes if compared with therates prevailing in December 2007. Forexample, Suzuki GS-150 and GS-125were avai lable at Rs68,5 00 andRs64,500. Honda CD-70 and Honda

CG-125 were priced at Rs54,900 andRs71,500. DYL’s YD 100cc Junoon,Yama 4 and YB Royale were selling atRs61,500, Rs59,400 and Rs59,000.Sabir Shaikh said that the Chinese bikemakers had still not increased the pricesand the assemblers are not ready to raiseany price and instead they have beentrying to absorb the increase in cost ofproduction due to higher power tariff.Pakistan’s bike assemblers (Chinese andJap an e se mad e) had achievedproduction of 1.38 million units in 2009-10 as compared to 917,628 units in2008-09. The production may comedown in the current fiscal year owing tofloods, which had destroyed some cropsand lands of growers, besides affectingover 20 million people.September’s sales figures would furthergive a clear picture regarding the impactof floods on bike sales, especially in ruralareas.The price of locally assembled cars fromJanuary 2008 till to date has increasedsharply on the back of losing strengthof the rupee against foreign currencies,especially yen, which pushed up the costof imported parts and raw material inworld markets.The prices of costly cars imported bythe local assemblers have also gone uptremendously.Toyota Corolla Xli and GLI prices hadrisen to Rs1,325,000 and Rs1,450,000as compare d to Rs893,000 andRs981,000 in January 2008. ToyotaCorolla 2.OD and Altis prices had risen

to Rs1,740,000 and Rs1,830,000 fromRs1,296,000 and Rs1,249,000. DaihatsuCuore CX CNG rate has gone up toRs78 5,0 00 f r om R s4 80 ,00 0.The price of 800-1,000cc cars, knownas middle income group choice, hassurged manifold. For example, the priceof Suzuki Mehran VXR CNG 800cc hasrisen to Rs539,000 from Rs395,000,Alto VXR CNG to Rs692,000 fromRs540,000, and Cultus VXR CNG rateclimbed to Rs878,000 from Rs600,000.Bolan VXR CNG and Ravi VX CNGprices have gone up to Rs635,000 andRs519,000 from Rs466,000 andRs344,000, respectively. Liana RXICNG 1,300cc price has increased toRs1,1 9 9,000 f rom Rs84 0,000.Pak Suzuki Motor Company Limited(PSMCL) has also been importing APV1,500cc and Jimny, whose rates are nowtagged at Rs1,850,000 and Rs 1,870,000as compared to Rs1,058,000 andRs1,130,000.Honda Citi Manual is now tagged atRs1,259,000 as compared to Rs887,000, while its automatic version isnow avai lable at Rs1,426,000 ascompared to Rs 947,000 in January2008. Honda Civic Vtec manual andVtec prosmatec versions are now pricedat Rs1,673,000 and Rs1,930,000 ascomp ar ed to Rs1,387,000 andRs1,567,000, respectively. Honda CRVAutomatic and Honda Accord Automaticare now priced at Rs 5,566,000 and5,966,000 as compared to Rs3,199,000and Rs 3,599,000. ….


The Federation of Pakistan Chambersof Commerce and Industry (FPCCI) hasstrongly condemned the further two percent raise in power tariffs.The continuous increase in electricitycharges is a planned conspiracy forsabotaging the economy of the country,which will only result in halting tradeand manuf actur ing act iv it ie s .This was stated by Sultan AhmedChawla, the president FPCCI in ameeting called to discuss the recentincrease by National Electric PowerRegulatory Authority (Nepra) at theFederation House.Mean while, Karachi Chamber of

Comme rce and Indust ry (KC CI)president Muhammad Saeed Shafiq,senior vice-president Talat Mahmoodan d vice-president Junaid Esmai lMakda in a joint press statement alsovehemently rejected the decision of theministry of water and power to increasethe electricity tariff by two per cent forall categories of consumers across thecountry as the government decided todissolve Pepco.The statement said if Pepco was goingthrough turbulent times, there seemsno justification in passing the lossesonto the consumers. It said that if theMinister of Water and Power Raja

Pervaiz Ashraf feels that the raise of twoper cent is a little one, then why thegovernment decided to share the loadwith the masses.The st at ement further sai d thegovernment’s plan for improvement instructure of power sector is welcomedbut there is no assurance that it wouldresolve the prevailing energy crisis.The recently announced restructure planseems very complicated and it shouldbe explained. Moreover, business andind ustrial communit y should beconsulted before chalking out anystrategy, the statement added.. ...

FPCCI, KCCI flay raisein power tariffs

Power & Energy - Update

22



Islamabad, September 17: Centre forPromotion of imports from developingcountries, Netherlands, Ministry ofDevelopment Cooperation (CBI) andSkill Development Council, Islamabadwill jointly hold a two days workshop inLahore on “Costing and Pricing” for SMEengineering sector firms on December13 &14, 2010 at the Holiday Inn, Lahore.SME Engineering Sector companies inthe engineering sector are always understress and lack the skills to workoutthe cost of a sub-contract part or sub-assembly. They need to be correct withthe “right price” while still ensuring thatthe deal is profitable for them. Often theowners lack these skills and also do nothave staff, which is trained.Whether these firms work for the localauto and tractor assembly plants, thelocal machine building industry or for

the export market, they are short of skillson how to cost their product and defendtheir price. With ever increasing energycosts and sky-rocketing raw materialprices, many vendor companies areunable to convince their customers onthe genuineness of their claims to priceincrease.The Sill Development Council Islamabadhave identified this skill gap and togetherwith the CBI have put together a course

for owner managers and executives ofEngineering Sector SMEs from Autoparts, machine building, pipe andprocess manufacturing sector and subcontract manufacturersThe main purpose of this workshop isto build the capacity of SME engineeringsector companies through an interactiveprocess, knowledge tran sfer, EUbusiness cases; individuals work on reall ife automotive busi ness cases.The workshop will be very interactiveand comprises real life cases as well aspractical experience wi th originalequipments manufacturing (OEM) andRFQ process; participants will gatherknowledge and practical know-how withrespect to calculations, negotiations andprice defending. These are encouragedto make an overview of the cost pricecalculation methods in operation in theirown company prior to coming to thetraining.The workshop will be conducted by astrong faculty consisting of Mr. JanOude Elferink, Mr. Martin Bitter andMr. Imtiaz Rastgar, CBI External Expertin Pakistan .Last date of registration is November20, 2010. Seats are l imited andadmission will be on first come firstserved basisSDC Islamabad focus to maximize thepotential of participants through theacquisition of knowledge and skill, italso provide extra ordinary on targettraining and motivation of honesty,quality, self respect, performance andintegrity to all participants to prepareexecutives needed to make Pakistanibusinesses competitive.

Workshop on Costing andPricing of EngineeringGoods and Auto Parts

Assemblers of Japanese motorcycleshave increased prices due to weaknessof the rupee against dollar and Yen,which made the imported parts deareramid slight increase in steel prices.An official in the DYL MotorcycleLimited said that the prices of YD 100ccJunoon, YD100cc Yama 4 and YB 100ccRoyale have been raised to Rs73,300,Rs69,900 and Rs70,000 from Rs72,785,Rs69,363 and Rs68,850, respectively.The company has, however, kept therate of YD-700 Dhoom unchanged atRs45,300.When asked why the prices of bikes hadbeen increased when over 80 per centdeletion in parts has been achieved, hesaid if the level of localisation in bikeindustry would have not been at thepresent high level, the prices would havegone up much higher.Pak Suzuki Motor Company Limited(PSMCL) has decided to increase the

prices from Sept 29, for its models likeGS-150, GS-125, Sprinter and SprinterECO to Rs86,000, Rs79,900, Rs70,000and Rs67,000, showing a rise of Rs500to Rs1,500.Atlas Honda enhanced the price of CD-70, CD-100, CG125 standard and CG-125 Delux by Rs600 to Rs2,000.Earlier, the bike makers had raised theprices few months back after theincrease in sales tax rate to 17 per centfrom 16 per cent followed by increase inprices of imported and local parts.There is a marked increase in prices oflocally made bikes if compared with therates prevailing in December 2007. Forexample, Suzuki GS-150 and GS-125were avai la ble at Rs68,5 00 andRs64,500. Honda CD-70 and HondaCG125 were priced at Rs54,900 andRs71,500. DYL’s YD 100cc Junoon,Yama 4 and YB Royale were selling atRs61,500, Rs59,400 and Rs59,000. ...

Japanese bike prices up onweakening rupee

visit our website

www.automark.pk

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Press Release - Education

23



Chairman Site Association of Industry(SAI), Salim Parekh has criticised thegovernment's intention to withdraw zerorating from five export oriented sectors.He was of the view that discontinuity ofzero rating will lead to another circulardebt for Pakistan.He said that the intention of the presentgovernment to withdraw this zero ratingof sales tax and implementation of VATwould be a step backward and ruin thebackbone of the nation's economy-thetextile sector. Talking to newsmen, hefound it surprisi ng that despit eexperiencing the great advantages of thezero rating facility, the Government isagain going backward.Parekh said that the textile sector isundergoing the worst ever crisis withyarn prices doubled, power shortage,gas load shedding, and frequent increasein power and gas tariffs. He said that inwar like situation in the country due to

heavy floods and severe law and orderproblems the government's intention towithdraw zero rating from five export-oriented sectors would push this foreignexchange earning sector to the wall.He said business community was infavour of increasing tax net andextending tax levy on services and othernon-tax e d sector s . Cr it icis ingbureaucracy, he said it appears thatbureaucracy has found a simple way bywithdrawing zero rating facility on majorforeign exchange earning and export-oriented sector. Parekh feared that thegovernment's move may create seriousliquidity problems for this sector.Referring to Federal Board of Revenue(FBR) performance in refund cases, hesaid FBR had introduced electronicrefund system and made several claimsof quick processing of refund cases butall these measures failed miserably ineffecting timely refunds. Citing Member

FBR, he said that VAT cannot beimplemented before clearing all pendingcases of refunds, and added refund caseswere shifted to RTO in November 2009but since then hardly any claim has beencleared. Opposing move of reintroducingrefund regime, Parekh sa id thatreintroducing refund regime will onlyopen floodgat es of corrupt ion.He is afraid that the country may seeserious negative outcome of any suchaction including sharp drop in exportsbesides large job cuts in this industry.Replying to a question, Parekh said thatthe Government should charge SalesTax on retail sale which is not paid backand must exempt the manufacturers-cum-exporters because Sales Tax istaken and then given back whichinvolves large Government machineryand proves to be an exercise in futility....

Export-oriented sectors

He is afraid that the country may seeserious negative outcome of any suchaction including sharp drop in exportsbesides large job cuts in this industry

Government's intention towithdraw zero rating criticised

Focus on Economy

As many as 67 industrial units, includinga sugar mills, were devastated by floodsin Sindh, causing loss of millions ofrupees.Most of the units are located in districtsJacobabad , Sha hd kot, Larkan a,Hyderabad, Thatta, Shikarpur andKashmore.Industries secretary Ali Ahmed toldmedia that details of damag e toindustrial units in other areas are stillawaited and would be available afterwater recedes. He said it was prematureto say whether the government wouldbe able to pay any compensation toowners of lost units.Meanwhile, a list of affected industrial

units revealed that 67 uni ts weredamaged by floods in the province.A total of 13 units, mostly rice mills,were damaged in Jacobabad.The claims submitted by the ownersestimate the loss per unit at Rs1.2 to 1.5million. Of the 13 units, 11 were ricemills. In Taluka Garhi Khairo, eightindustrial units, mostly rice mills, weredamaged by floods, causing average perunit loss of Rs2.5 million.The higest number of units, 35, wasaffected by floods in Taluka Thul wherethe loss per unit has been estimated atRs2 million.In district Kashmore and Kandhkot,floods wrecked 11 units. The average per

unit loss has been estimated at Rs2.5million. Most of the affected rice millsare located at Ghouspur and Karampur.Director of Industries Ishrat Siddiquiconfirmed that so far there is report of67 factories damaged by floods in theprovince.Cha irman, Pakistan Sugar Mil lsAssociation, Sindh chapter, Wajid Arain,told media that flood water entered LarhSugar Mill causing capital loss to themachnery and plant.It may be pointed out that after Larhsugar mills knocked out of production,only 28 mills would start crushing thisseason...

Floods damage 67 industrial units

24



Japan International Cooperation Agency(JICA) has completed surveys in 18towns of Karachi under the first ever'Transport Master Plan' of the city.About 40,000 residents from 18 townsand six cantonment boards participatedin the survey.According to sources, the Japaneseteam, which has been working on themaster plan for the last one year,presented its progress report to thete chnical co mmitte e of S indhGovernment on last week.The report was presented by MinoruShibuya, Japanese team's head in ameeting of the committee, headed byManaging Director Karachi Mass TransitCell Malik Zaheer.The meeting was attended by expertsand officials of various departmentsincluding Finance Department, Planning

and Development, Civil Aviation, KPT,Port Qasi m, DHA, Milit ary LandCantonments, Traffic Police, PopulationDepartment, Pakistan Railways, andCity District Government Karachi(CDGK).The representatives of the departmentshailed the work and progress of the JICAteam.

The study unde r 'T r ansp or tImprovement Project' would b ecompleted within two years, whichwould be the first tranport-relatedmaster plan of any city of the country.Sources said the study, would facilitatethe preparation of 'Karachi TransportMaster Plan 2030'. Besides, it wouldvalidate the transport project identifiedin the Karachi Development StrategicPlan-2020 (the transport section ofKarachi Master Plan).It is worth mentioning here that for thelast 62 years, no master plan oftransportation has ever been preparedfor any city of Pakistan and it is for thefist time that a complete planning for atleast 20 years is being made forKarachi.....

Karachi TransportMaster Plan

JICA presents progressreport to technical body

City Transport - Update

Only four meetings of Auto IndustryDevelopment Committee (AIDC) havebeen held in 33 months since itsformation.According to terms of reference of thenotification, the meeting was requiredto be held at least once a month, butfrom December 2007 till todate, onlyfour me etings ha ve been held.The AIDC was formed through anotification issued by Ministry ofIndustries and Production on Dec 18,2007 as per a decision of the EconomicCoordination Committee.While taking up the matter with thegovernment, vendors of car industrytold Dawn that the AIDC is a platformof all stakeholders which has a main roleto play in preparing and implementinggovernment policies.Vendors said: “The AIDC meetings

should be held in the first week of everymonth. ” Parts makers were al sounhappy about the non-implementationof the Auto Industry DevelopmentProgramme (AIDP).This programme,which replaced the deletion programmein 2006, was prepared with consensusof a l l st akeholder s, includi nggovernment, car makers and vendors.Vendors said that one of the key AIDPissues regarding lo calisation of hi-techparts and their inclusion in SRO-693still requires a timely action from theEngineering Development Board (EDB).Under a five-year tariff plan in the AIDP,a total of 10 main hi-tech parts wereneeded to be localised and included inthe SRO-693 with effect from July 2009.In the meantime, the EDB granted a oneyear extension for providing support tothe car assemblers under a commitment

that the inclusion of these 10 parts inSRO-693 would be done from July 2010.However, the Federal Budget 2010-2011completely ignored this issue which istantamount to violation of bas icrequirement of the AIDP.Prior to the budget, an exercise ofpreparing budgetary recommendationswas conduct ed by the EDB an dcommittees were formed under theconvenorship of Engr M A Jabbar(Committee on Indigenisation andBudget Proposals) and Feroz Khan(Committee on Review of SROs and PCTHeads). Despite hectic discussionsamong government and stakeholdersand submitting recommendations to theEDB for implementation in the 2010-2011 budget, recommendations werenot incorporated in the budget....

AIDC fails to holdregular meetings

25


USAID an d Sarhad Chamber ofCommerce and Industry (SCCI) onMonday signed a memorandum ofunderst anding (MoU) to providefinan cial assi stance to Khy be rPakhtunkhwa for its economic revival.Peshawar based US Consul General,Elizabeth H Rood signed the MoU onbehalf of the USAID while presidentSCCI Riaz Arshad represented SCCI.Talking to media, Rood said that theeconomy of Khyber Pakhtunkhwa was

facing enormous challenges due tomilitancy and extremism and naturaldisasters.The MoU aims to involve the chamber,provincial government, civil society,academia and experts to develop a visionfor the economic growth of the provincein the coming years.She said that they wanted a brighter andprosperous future of the KhyberPakhtunkhwa adversely affected by therecent super flood.

Giving details of the MoU, she said thatfunds would be provided for trade,communications, agriculture and othersectors of Pakhtunkhwa province thatwas badly affected by the devastatingfloods.To a question regarding the revival ofthe sick industrial units of the province,she said that they would in collaborationwith SCCI in this regard...

Wali Mohammad from the Progressivegroup has been elected unopposedpresident of Balochistan Chamber ofCommerce and Industry, Quetta, for2010-11. Rafu Gul Barrach and MumtazAhmed have been elected vice presidentsof the BCCI.Earlier, 14 members were electedunopposed to the corp orat e andassociate classes.They include Haji Rafu Gul, HajiGhulam Sarwar Mengal, Malik AbdulRehman, Jamil Ahmed Khan Jogezai,Haj i N az ar Mohammad, HajiMohammad Rasool and Syed Sher AliKhan Mas hwani (corporate class)Mumtaz Ahmed Paricha, Abdul RehmanShah Agha, Syed Abdul Qadir Agha, HajiAbdul Wadood Achakzai, Syed GhulamSarwar Shah, Haji Mohammad Afzaland Mohammad Hasan Achakzai.


The Motor Vehicle Registration (MVR)Department of the Ministry of Exciseand Taxation is all set to introduce smartcard to facilitate payment of vehicle tax.The handy card would help vehicleowners to pay tax at special countersafter office hours. Arrangements will bemade with the non-bank institutions toreceive vehic le tax from the smartcardholders.Director MVR Dabeer Ahmed Khan toldmedia that the card would benefitowners of about 2.2 million vehiclesregistered with the department andwould also serve as a secondary proofof ownership of the vehicle during TrafficPolice checks.The card would carry nominal handlingcharges, but would save from standingin long queues at MVR office at CivicCentre, he added.Collect files Mr Dabeer also advisedowners of the vehicles registered before1980 to collect their files from thedepartment otherwise the record wouldbe destroyed.Since the entire record of vehicles hasbeen computerised, the department hasno space to preserve thousand of files.Around 40,000 files to be destroyed iftheir owners did not collect them, headded.

He said despite hectic media drive thevehicle owners had not shown anyinterest in collecting their files, whichare needed at the time of sale andp urcha se to get a be tter price.According to data released by the MVRdepartment about 30,000 to 40,000vehicles were not road worthy and wereoff the road but their owners had notreported to the department resultantlyhuge road tax had been accumulated onthe owners.Mr Dabeer said that there were about5,000 vehicles whose owners had notcollected their original number platesafter registration.He said that motor dealers had beendirected not to deliver any new vehiclewithout registration.“The Traffic Police is out to confiscatevehi cle s with AFR (ap plied forregistration) number plates on thedirective of the Sindh High Court,” hesaid.Mr Dabeer expressed ignoranceabout reports that the governmentintended to liberalise import of usedcars to bring down prices of locally-assembled cars. “About 300 locally-assembled cars are registered daily withthe department compared to only 10imported cars,” he disclosed.

Smart card forpayment ofvehicle tax

Mr. Dabeer said that there were about5,000 vehicles whose owners had notcollected their original number plates

after registration.

USAID, SCCI sign MoU

BCCI electsnew body

News Updated

26



The Sindh government is set to auctionmore than 2,000 unclaimed vehicleslying at the centralised vehicles’ pool — commonly known as Nazarat — after itretrieved over 330 vehicles from seniorgovernment officials, members of thearmed forces and influential individuals,following a Supreme Court order, itemerged on Sunday.Officials said the process to hold thefour-day auction — from September 28to October 1 — had already been initiatedafter it was made sure that no suchvehicle remained in the use of anyinstitution or individual who were lentthe impounded vehicles under the‘supardari’ rule.“Right now in all there are 2,043 vehiclesavailable for the auction,” said an officialciting from a recently compiled data.“They are 1,731 two-wheelers and 312four-wheelers. The bidding arranged bythe Citizens-Police Liaison Committee(CPLC) will continue for four days underthe supervision of a civil judge and ajudicial magistrate,” the official said.He said that officials of the PakistanArmy, home and revenue departmentswould also be part of the team thatwould witness the overall biddingprocess during the four days.“Among the 2,043 vehicles, those 335vehicles are also included which havebeen retrieved from different seniorgovernment officials or other individualsin line with the Supreme Court order,”added the official.He said that the retrieved vehicles were153 four-wheelers, including severalfour- by four ve hicles , and 182motorcycles which were in the use ofmostly senior officials.The ‘supardari’ is a process whereinunclaimed vehicles are allowed to beused by different individuals with apledge of returning them to theauthorities when the rightful ownerclaim them.

However, the Sindh High Court in 1992had issued an order that vehicles mustnot be handed over under the socalledarrangement to any person other thanthe owner.The officials said the arrangements forthe planned auction had almost beencompleted with the aim of disposing ofthe vehicles in a transparent manner.“Before the next auction the dueprocedures are met under Sections 523(procedure by police upon seizure ofproperty taken under Section 51 orstolen or procedure where owner of theproperty seized is unknown) and 524(procedure where no claimant appearswithin six months) of the criminalprocedure code (CrPC) before holdingfinal bidding,” said CPLC chief AhmedChinoy.He said the CPLC which organised thecentralised vehicles’ pool (CVP), orNazarat, had a history of successfullyhold ing tr ansparent au ct ions ofunclaimed vehicles. He expressed thehope that the activity would continueon a regular basis.

Established in 1992, the CVP is designedto help people locate their missing orstolen vehi cles , which have beenrecovered, at one place instead of visitingdifferent police stations.Nazarat is monitored jointly by the citygovernment and the CPLC.“At the last auction in March 2009, wemanaged to dispose of more than 800unclaimed vehicles, which were lying atNazarat, in a threeday open auction. Theauction generated over Rs17 million forthe provincial exchequer through theopen and transparent bidding,” addedMr Chinoy.He said under a defined procedure thesuccessful bidders would have to depositthe earnest payment — 25 per cent ofthe bidding amount — at the drop of thehammer.The remaining 75 per cent of the biddingamount plus the income tax would haveto be paid within seven days after theconfirmation of the auction proceedingsby the provincial government, headded.....

2043 unclaimed vehiclesset to be auctioned

“Right now in all there are 2,043 vehicles available for the auction,”said an official citing from a recently compiled data.

“They are 1,731 two-wheelers and 312 four-wheelers. The biddingarranged by the Citizens-Police Liaison Committee (CPLC) will continue

for four days under the supervision of a civil judge and a judicial magistrate.


27



Pakistan's car sales have shown signs ofimprovement in the early months ofFY10, largely thanks to price reductionson the part of carmakers. Car sales of10,372 units were up by 28% month-on-month (m-o-m) in October and were8% higher than in October 2008.Al though this may appear to be awelcome sign of recovery after a 50%decline in car sales in FY09 (ending June2009), the Pakistan AutomotiveManufacturers Association (PAMA) haspartly attributed the growth to a rushby consumers to buy before prices wereincreased again at the end of October.Several carmakers have raised prices tocounter the effects of exchange-ratefluctuations, which have been adverselyaffecting margins.The sales growth covered all carsegments, but the global trend for a shiftto small cars was bucked as the highestm-o-m growth came in the 1300-1600ccsegment, where sales rose by 31%. The850cc and 1000-1300cc segments bothrecorded growth of 25%. For the first

four months of FY10 combined (July toOctober), sales rose 21% to 34,553 units.However, with October's price hikeslikely to affect sales in the comingmonths, BMI is forecasting car salesgrowth of around 5%. While we expectsome correction in the market from aparticularly low base in the last financialyear, higher prices will drag on themarket's potential growth.With this in mind, Pakistan rounds outBMI's Business Environment Ratingsfor the automotive industry in AsiaPacific in 14 th place with a rating of38.9 from a possible 100. The market isheld back by low production growthpotential and an average rating for salesgrowth. However, as a signatory to theTrade Related Intellectual PropertyRights Agreement (TRIPS) under theauspic es of the Wor ld Tr adeOrganisation, the country's regulatoryenvironment scores well. A number offree trade agreements also contributeto this criterion, although forming FTAswith non-Asian countries would improve

this rating further. Despite low marksfor bureaucracy and corruption, themarket does score well for its long-termeconomic risk and policy continuity.The competitive landscape remainsrestricted to a handful of players,however. Indus Motor took advantageof growth in the higher engine capacitypassenger car segment, with sales of theToyota Corolla contributing to growthof 25% y-o-y in October and growth of77% for the first four months of thefinancial year. This took the company'smarket share to 42% from 28% in thesame period of the previous f inancialyear. Pak Suzuki's market share for thefour months fell to 45% as its sales forthe period were down 2% y-o-y, despitea 23% increase m-o-m in October and2% y-o-y increase for the month. Thereis an opportunity for Pak Suzuki to clawback some ground, however, afterlaunching five variants of the SuzukiSwift in October.

Autos Sector ShowsGrowth Potential

The sales growth covered all car segments,but the global trend for a shift to smallcars was bucked as the highest m-o-m

growth came in the 1300-1600cc segment,where sales rose by 31%. The 850cc and

1000-1300cc segments bothrecorded growth of 25%.

Aamir A. Allahwala has been electedunopposed as Chairman PakistanAssociation of Automotive Parts &Accessories Manufacturers (PAAPAM),while Syed Nabeel Hashmi elected asVice Chairman. Election CommissionerMohammad Saleem announced theofficial results of PAAPAM election 2020in the annual general meeting (AGM).The other elected members of the

Managing Committee are MohammadAslam Mal ik, Mohammad Ashraf,Sheikh Mehboob Ashraf, MehmoodAlam Sherani, Mohammad SiddiqueMisri, Shariq Sohail and Arshad AminAwan.Federal Secretary Industries AbdulGhaffar Soomro, Chairman and CEOEngineering Development Board AitezazNiazi and out-going chairman Tariq

Nazeer congratulated the new body.PAAPAM office bearers said that localmanufacturers were providing cheapestmotor cycles and tractors in the regiondue to 90 percent indigenisation andtransfer of technology. They said if theinternational manufacturers of carstransfer technology to the local vendors,then prices of locally made cars wouldalso come down.

Aamir elected PAAPAM chairman


28



The government is considering to windup the Standby Arrangement (SBA) withthe International Monetary Fund (IMF)on a “positive note” after meeting allconditionalities and receiving the next$1.7 billion tranche in November-December this year.Informed sources said the authoritieshoped to meet the remaining majorconditions of the IMF programme,including introduction of a broadbasedreformed general sales tax (RGST) andenergy sector reforms during the currentquarter (October-December) andcomplete the fifth review in October-November.The review would enable the authoritiesto draw another tranche of about $1.7billion before end-December this year.A government official said that theauthorities had discussed the option ininternal meetings and a final decisionabout the termination of the SBA wouldbe made by November this year keepingin view the economic situation at thattime.With the completion of the fifth reviewand release of $1.7 billion, Pakistan’sremaining share of the $11 billion SBAprogramme would come down to about$1.7 billion that the authorities nowconsider not to avail.Pakistan’s foreign exchange reservesincreased last week to about $16.75billion, enough to cover more than fivemonths’ imports. Robust remittancesfrom overseas Pakistanis and lower than

previous years’ trade deficit had givenconfidence to the authorities to discussa pr emat ure completion of thep ro gr amme , the sour ces sai d .They said that the proposal to concludethe IMF programme had three positiveaspects. One, the government would beable to adjust repayment of about $1.2billion due to the IMF during the currentfiscal year against the last IMF’s tranche,instead of pilin g up more loan s.Second, it would give a positive signalto the international capital market thatPakistan’s economy was stable enoughto meet its programme criteria andinter national obligat ions despitedevastations caused b y floods.Third, the sources said, the governmentwould be able to negotiate a freshprogramme with the IMF, if need aroseat a later stage, on the strength of ane arl ier succ essf ul p ro gr ammecompletion.Pakistan had terminat ed an IMFprogramme prematurely during formerprime minister Shaukat Aziz’s tenureon a positive note after successfulc o mp l e t i on o f p r o gr amme ’ sconditionalities and had given up itsright to draw last tranche of theprogramme. That was the only IMFprogramme, out of seven arrangements,Pakistan had successfully completed andstarted repayments ahead of time.The 23-month $7.6 billion SBA wasoriginally approved by the IMF’sexecutive board in November 2008 on

the request of former finance ministerShaukat Tarin and on the basis of astabilization programme which wasaugmented in August 2009 to $11.3billion for 25 months because ofshortfalls in international aid flowsfollowing a cold response from theFriends of Democratic Pakistan (FoDP).Pakistan has so far received about $7.3bil lion under the S BA wi th thecompletion of fourth review in May thisyear. Since then the IMF has withheldpayments of the remaining threeinstalments because of continuoussl ippages on performance criteria.A few months ago, Pakistan and the IMFhad agreed to merge three instalmentsof $1.2 billion each into two tranches of$1.7 billion each but the releases couldnot be made when Pakistan did notintroduce the value-added tax with effectfrom July 1, 2010, or complete the powersector reforms as committed to the IMF,the World Ba nk and the As ia nDevelopment Bank.The SBA was meant to restore financialstability through a tightening of fiscaland monetary policies to bring downinflation and strengthen foreigncurrency reserves, protect the poor bystrengthening the social safety net andrai se budget ary revenues throughcomprehensive tax reforms (VAT) toenable significant increases in publicinvestment and social spending requiredfor achieving sustaina ble growth.

Govt studying futureplan without IMF

The 23-month $7.6 billion SBA was originally approvedby the IMF’s executive board in November 2008 on therequest of former finance minister Shaukat Tarin andon the basis of a stabilization programme which was

augmented in August 2009 to $11.3 billion for 25months because of shortfalls in international aid flows

following a cold response from the Friends ofDemocratic Pakistan (FoDP).

Focus on Economy

33



Syed Ali Raza Saeed Shah was electedas 43rd President of Rawal pindiChamber of Commerce and Industry(RCCI) and took over the charge duringthe Annual General Meeting (AGM) ofthe chamber on Thursday.Syed Ali Raza Saeed Shah was SeniorVice President of the chamber duringprevious term.The AGM of the chamber was presidedover by former Presidents Najam Malikand Sabir Hussain Butt. RCCI's ex-Presidents and large number of businesscommunity was present on the occasion.The out-going President Kashif Shabbirpresented Presidential Medal to thenewly elected President Syed Ali RazaSaeed Shah, while two vice presidentsMian Ateeq Sheikh and Dr ShumailAhmed also took the charge from theirout-going counterparts.There were no elections of executivebody seats as well as for the slots of threeoffice-bearers this year as they allreturned unopposed as no one filednomination papers against winningcandidates.Speaking on the occasion new RCCIPresident Ali Raza Saeed Shah reiteratedhis resolve to work for the bettermentof the business community and takeRCCI to new horizons through constantprocess of development.He said that government should reviseits fiscal policy as financial position ofthe country is deteriorating day by day.The industry has almost closed downand the trade related activities havereached at the brink of dis aster."It is very imperative to diminish thedeficit of trust for creating businessfriendly atmosphere and for this purposegovernment has to take initiative first,"Shah said, adding that it is the need ofhour to take business community intoconfidence, while making economicpolicies to bridge the gap betweengovernment and businessmen and toattract the investors.He said that country is passing throughvery hard time and havoc played by floodadded fuel to fire. In these circumstancesentire nation should make collectiveefforts to drag out the country from theprevailing crises....

The Minis try of Indust ries andProduction (MoI&P), in order to protectlocal industry, has suggested adoptionof import-restricting measures whichdo not v io late Wor ld T radeOrganisation's (WTO) strictures.The draft industrial policy suggests thatgiven l imited policy space in tariffmeasures, the government shouldeffectively use non-tariff measures to itsadvantag e in lin e with the WTOagr eeme nt . In this regar d, thegovernment should more effectively useborder control measures such as sanitaryand phytosanitary (SPS) measures,quali ty standards such as technicalbarriers to trade (TBT), quantity andquality measures such as preshipmentinspection, temporary measures to slowimports or to impose import restrictionsthat safeguard local industry as well asbalance of payment measures to protectlocal industry.According to the draft of IndustrialPolicy 2010, trade policy reforms in

1990s and 2000s were in line with theWTO and reversed protect ionist,inward-oriented import substitutionpolicies of the previous decade.S ince 19 96 , su b st ant ial t r adeliberalisation and tariffication has beenrealised through tariff cuts, tariffrat ionalisation, removal of quotaregimes and import surcharges. Pakistanhas al so s ign ed re gi onal t radeagre eme nts wi th neighbouringcountries.Keeping in view the limited policy spaceavai lable to the government thefollowing proposals have been putforward.i) Trade policy is an instrument ofindustrial policy. Therefore, it shouldbe drafted in conjunction with industrialpolicy, and not independently. MoI&Phas proposed that the Ministry ofCommerce in future should frame itstrade policy in accordance with thebroader objectives of the industrialpolicy.

MoI&P suggests adoptionof import-restricting measures

Protection for localindustry

Syed Ali Razaelected 43rd

President RCCI

Muhammad Naeem Malik, Director-G eneral, Petr oleum Concessi ons(DGPC), assumed charge of the officeof Managing Director of the Oil & GasDevelopment Compan y Lim it ed(OGDC) here Monday. He has vastexperience, of more than 30 years, inexploration and production sector ofhydrocarbon resources in Pakistan.OGDC Officers Association and MazdoorI te h ad U nio n (C BA e le c te drepresentatives) welcomed Naeem Malikat the OGDC House, Islamabad, in abefitting manner. Addressing the officersand workers on this occasion the OGDCMD said that OGDC would moveforward, upholding the high standardof professionalism based on merit andintegrity.He said that he accepted this high profileresponsibility in the larger interest ofthe company and the E&P sector ofPakistan. He reiterated that OGDCwould make strenuous efforts to achievethe set goa ls of exploration and

production of hydrocarbon resources tomeet the energy requirement of thecountry.He gave a clear and loud message to theemployees to concentrate on their dutiesmore consciously and carefully. He saidthat unnecessary indulgence in non-productive activities would lead tonowhere.Naeem said that OGDC being nationaloil company is more responsible towardscompletion of its development projectsand exploration targets set by theMinistry of Petroleum and NaturalResources to play a positive role in thenational economy. He desired thatprofessionals of the company shouldperform their responsibilities with hardwork and dedication in a transparentmanner. He assured them that uprightand f a ir e mp loye es would beacknowledged for their achievementsand services rendered, and the bad oneswould not be spared.-PR

Naeem Malik assumes charge of OGDC MD

Industry - Update

34



To build the most excellent and world-renowned FAW brand, we should inheritthe enterpr ise's spirit of "study ,innovation and self-reliance", strivingfor the first, creating new cause andshouldering the responsibili ty. Inaddition, we should also create theoptimal manufacturing environmentwith the optimal workforce, product andprocess technologies. Thereby, we canprovide the users with best vehicleproduct s an d marketing service."The automobile industry is a capital-intensive, technology-intensive andlabor-intensive industry. Besi des,another characteristic of this industrylies in long industrial chain, higheras socia tion, and wi de ran ge ofemployment as well as strong capabilityof boosting consumption. Therefore,such a special and influential industryin economic development shall be takenas an important part during the rapidtran sformation of the economicde ve lopment mo de in C hina ."From the macroscopic view, the talkwith Xu Jianyi, general manager of FAWGroup was spread out. At the verybeginning, he emphasized the meaningfor automobile industry to transform itsdevelopment mode."What can we see from the developmentprocess of developed count rie s?Generally, automobile industry indeveloped countries is powerful. Thuscareful consideration must be given toautomobile industry which shall betaken as a very essential content duringthe tr ansformation of economicdevelopment mode." Xu Jianyi says."Xu Jianyi held tha t independentinnovat ion is ce ntral to thetr ans fo r mat i o n o f e co no micdevelopment mode. "What independentinnovation concerns more are thequali ty, efficiency an d benefits ofdevelopment. Independence is thefoundation for an enterprise andinnovation is the soul to make progress.If an enterprise can not operate

independently and make its mainoperation under control, it will have nofoundations for development. In termsof the State, it is expected that severallar ge ente rp r ise gr oup s withinternational competitive strength tosupport and promote the developmentof the national economy should becultivated. It is for us an enormous task,but indep ende nt inn ovat ion isinevitable."The first truck of new China, Jiefang,was produced by FAW who was born ininde pe nd ence and b egan wi thindependence.Xu Jianyi said, "For FAW, independenceis very important. It is out of its callingand what people expect. For this reason,independence is always highlighted inrecent years. First, we put forwardclearly to go towards a new course ofindependent innovation with concertedefforts and with one hand and one mind;second, get our ideas into shape, seekingunity in targets including short-term,mid-term and long-term, targets, andthen define and implement those targetsone by one; third, scientifically allocateand integrate resources. "FAW now has given top priority toindependent cause. "We put forward'two changes in three years': greatlychanging the operation of independentinnovative cause and the competitionof independent innovative products inthree years. What does FAW leave us?The answer is management base,experience and talents. The most directperformance is that we have spent 57

years to make two brands--Jiefang andHongqi. Therefore, besides inheritingthe Jiefang and Hongqi brands, we shallleave the future generations withcapability of system innovation, forsystem can provide support for brand."Now, FAW is quickening the pace ofindependent innovation by opening andcooperation. "At the present stage, it iscomplementary and promoting to eacho ther to deep en op ening andcooperation and accelerate independentdevelopment. We obtain relevantknowledge of talent, management andtechnology through cooperation, whichis necessary and essential for developingindependent cause. To deepen openingand cooperation is also to developindependently. One important problemis that we shall emphasize the cultivationof our own system.We must digest and absorb the key coretechnology as soon as possible to makeus more competitive. In this process,we must respect the law of automobilemarket development, and grow strongeras soon as possible based on our actualsituation. As for FAW, it is at the besttime to speed up development ofindependent cause. FAW has possessedcapability of chassis matching for high-end sedan, and of fully independentdevelopment of the body of wholevehicle.After the improvement of Jetta andoperational testing of the Hongqi,basically, FAW has possessed capabilityof fully independent development of themedium and the below passengervehicles. The biggest advantage of ourcompany lies in knowing what ourcustomers need. Furthermore, we havemore and more profound understandingof requirements and standards forautomobile manufacture after so manyy ear s of innovat ive p r act ice s.Now independent innovation or own-brand development is at its fastestgrowth, and FAW shall play its part.....

FAW expanding innovativecapabilities

The automobile industry is a capital-intensive, technology-intensive andlabor-intensive industry. Besides, another characteristic of this industry lies in

long industrial chain, higher association, and wide range of employment

International Automotive - Update

35



This week, Ford Motors announced thatIndia would be a global manufacturinghub for its new small car, the Figo. Thisund e rline s a re mar kable newdevelopment. India has overtaken Chinaas a car exporter this year, exporting201,138 cars in January-July againstChina’s 164,800. What’s more, Indianexports in this period went up 18%, whileChina’s fell by 60%.Of other big Asian exporters, Korea’sexports have fallen 31% and Thailand’s43%. In a terrible global recession, Indiais the onl y country with zoomingexports. Hyundai has long made Indiaan export hub for small cars, and aimsto export 300,000 India-made cars thisyear. Maruti-Suzuki comes second inexports, with Tata, Mahindra and otherswell behind. Nissan is about to build anew factory in India specifically forexports. India looks like exporting halfa million cars in 2009-10, and shouldcross the million mark within five years.

What accounts for India’ssuccess? Visionary planning?Long-term strategy? No, India’striumph was completelyunplanned. No planningdocument ever envisioned orplanned for beating China.Analysts say China has become a greatauto exporter because of huge subsidies,an undervalued exchange rate and dirt-cheap credit. But India never aimed atan undervalued exchange rate to pile uplarge trade surpluses — rather, it aimedto keep the real effective exchange rateunchanged from 1993 onward. India’sinterest rates were always among thehighest in Asia. It stubbornly refused toreform its inflexible labour laws, withadverse effects on productivity andwages relative to Asian competitors. NoIndian strategic vision targeted specialprovisions or subsidies to the auto

sector. Indeed, the sector for yearssuffered exceptionally high excise dutiesand sales tax.

How then did this sector becomeworld class?In the early 1990s, auto production wasfreed for investment by any domesticand foreign investor. Indian plannersas well as foreign investors regardedIndia as a low-skilled, low-productivitycountry producing third-rate cars likethe Ambassador and Premier. Foreigninvestors came only because car importswere virtually banned. The small size ofthe Indian car market created seriousscale diseconomies.Critics from both the Right and Leftcriticized the new auto policy. Leftistsclaimed foreigners would decimate theindustry. Freemarketers complainedthat foreigners were being wooed tocreate an inefficient, high-cost industrybehind high tariff walls.Nobody foresaw what fierce competitionwould do. Auto companies compete byconstantly producing new models withimproved features like fuel efficiency.Indian consumers are very price-sensitive , so design changes to reducecosts are also vital. India’s auto partscompanies had rarely been asked forinnovative changes during the oldlice nce -p e rmit ra j, when theAmbassador and Premier faced littlecompetition. But MNCs brought incompetition, and started a dialogue withauto ancillary manufacturers onconstant design changes. To theirsurprise, they found that Indianengineers had considerable skills, andcould make improvements quickly andcheaply.Bharat Forge, which makes auto forgingslike crankshafts and axles, was amongthe first to reali ze that India’s bigadvantage was not cheap labour butcheap skills. The company decided to

have no blue collar workers at all, onlyengineers. This yielded a huge rise ininnovation and productivity, and soonmade Bharat Forge the second biggestauto forging company in the world.For new auto components, global giantslike Delphi and Visteon typically tookthree months to go from concept todesign, prototype, testing, removal ofglitches, and final manufacture. ButBharat Forge found it could do the entiresequence in just one month.Soon, every auto company and partsmaker in India focused on using cheapskills to constantly produce better andcheaper parts and vehicles. Bajaj Autoonce relied on knowhow from Kawasakifor motor-cycles, but soon found thatits own R&D produced far better bikesfor Indian conditions. Maruti Suzukimade India a global hub for R&D. AndTata Motors created the Nano, theworld’s cheapest car, making the worldsit up.The ultimate compliment to India’sdesign skills came from Carlos Ghosnof Renault-Nissan. He decided to buildan ultra-cheap car (that might competewith Tata’s Nano) in collaboration withBajaj Auto. In such partnerships, theglobal partner usually does the R&D andthe Indian partner the low-costproduction. But Ghosn decided the newcar should be designed by Bajaj Auto,which had never produced a car before.Why? Because Ghosn felt it was easierto upgrade from a two-wheeler thandowngrade from a standard sedan toproduce an ultra-cheap car.This then is the secret of India’s success.Don’t waste time with strategic planningand picking winners. Simply letcompetit ion happen. You wil l besurprised how the most unlikely sectorscan become world class. That’s howInd ia has just beaten C hi na .. ..

How India beat Chinain auto exports


The ultimate compliment to India’s design skills camefrom Carlos Ghosn of Renault-Nissan. He decided to buildan ultra-cheap car (that might compete with Tata’s Nano)

in collaboration with Bajaj Auto.

36



Extreme weather across the globe thisyear, from drought conditions in Russiaand Ukraine to flooding in Pakistan andCanada, is lighting a fire undercommodity prices. Wheat prices havespiked since June, while corn rallied toa 23-month high, coffee reached a 13-year peak, and cotton advanced to itsmost expensive levels since 1995. Nowthe price of rubber, a key industrialcommodity, is taking off.Goodyear Tire & Rubber (GT) andCooper Tire & Rubber (CTB), the twolargest U.S. tiremakers, have begunnotifying customers they will raise tireprices by as much as 6.5% by earlyNovember. Bridgestone, the largesttiremaker by sales, said in late Augustthat it's increasing prices by up to 6%in Europe, the Japanese company'ssecond price increas e thi s year.The industry is facing supply problemsowing to bad weather that hit rubberproduction in Asia. "Drought earlier thisyear and heavy rains later on hampered

tree-tapping across Asian plantations,"sa ys Pongsa k Ker dvongb undit ,managing director of Von Bundit, a bignatural-rubber producer and exporterbased in Phuket, Thailand. "Globalproduction will lag behind soaringdemand for at least another two years."Inventory stockpiles of rubber, also usedin products like gloves and condoms,will drop 12 percent and cover just 67days of projected demand in 2011, thelowest level in at least a decade,according to Goldman Sachs (GS)an alysts in a Se pt . 3 r ep ort .Consumption will outpace supply by127,000 metric tons, the most since2007, the bank estimates. Prices ofrubber futures in Singapore may jump20 percent by March, says MakotoSugitani, a senior director at NewedgeJapan. If so, that would work out to arecord $4.20 a kilogram.The global economic recovery andwhite-hot growth in China are poweringdemand for rubber products. World

auto sa les, propelled by Chinesedemand, will increase 8 percent thisyear, to 68.5 million cars, and 7.2percent, to 73.4 million cars, next year,figures Ashvin Chotai, London-basedmanaging director at Intellig enceAutomotive Asia.Tiremakers are passing on the highercosts, and future hikes can't be ruledout. "We don't do a lot of raw-materialhedging" says Keith Price, a spokesmanfor Akron-based Goodyear.Top Glove, based in Selangor, Malaysia,the world's biggest rubber-glove maker,passes on "the majority" of higher costs,says Executive Director Lim CheongGuan. Rising costs are "a headache,"says Sakae Kubota, managing directorof Okamoto Industries, Japan's biggestcondom maker. However, competitionfrom other brands may limit thecompany's ability to raise prices, Kubotaadded.

City District Government Karachi(CDGK) has sought the approval for 12new mega projects costing Rs 2 billion,which will begin in the current financialyear after app roval from SindhGovernment.The projects include the construction of4 new flyovers, 6 major road, installationof storm water drainage system andconstruction of causeway at Malir River.Thi s was s tated by K ar achiAdministrator Fazlur Rehman whileaddressing the meeting of officers ofWorks and Services Department in DCOCamp Office on Oct 7.The meeting was called to review anddiscuss the ongoi ng developmentprojects and start of new projects in thecity. During a briefing on this occasion

the EDO Works and Services said thatall the ongoing projects will completeon time.Administrator Fazlur Rehman directedthe officers to ensure timely completionof development projects by acceleratingthe pace of work and to carry on theplanning for new projects.He said that the city government willconstruct a flyover at Korangi Crossingwith the cost of Rs 350 million in thisyear while another flyover will be builtnear Abbasi Shaheed Hospital inNazimabad with the same estimatedcost. "The flyover at Ibne-Sina Road,Korangi Nullah and Gujjar Nullah willhave an estimated cost of Rs 200million," he said.City Government will also construct

many major roads including from ModelColony Avenue to Khokhrapar Malirwith a cost of Rs 100 million, fromParacha Chowrangi to Northern BypassHub River Road Phase-I with a cost ofRs 300 mil lion, from MosamyatChowrangi to Superhighway (4.5kmroad) with a cost of Rs 200 million.Administrator Karachi said that thecauseway at Malir River will be madetwo tracks with a cost of Rs 150 millionwhile the roads at Banaras Chowk andadjacent areas will be constructed witha cost of Rs 782 million and theconstruction of road from Mazar toSurjani Chowrangi Manghopir Road hasan estimated cost of Rs 150 million.-PR

CDGK seeks 12 newmega projects' approval

The Squeeze on GlobalRubber Supplies

Freakish weather hurts rubberproduction across Asia

Industry Update

37



Indian mega manufacturer Mahindra(specializing in utility vehicles andtractors since 1945-after executivesvisited the Willy's factory in America-and now branching out into financialservices) officially unveiled their firstforay into the two-wheel realm ofmotorcycles.Targeting the transportation needs of arapidly growing Indian market ,Mahindra sh owed off its nascentendeavor in Mumbai today (Sept. 30)with an affordable and somewhat stylishmotorcycle with the bold name (insertyour own Austin Powers reference here);the 2011 Mahindra Mojo motorcycle.The 2011 Mahindra Mojo wi ll beavailable in both a 125cc and 300ccversion. The Mojo 300cc is aimed atearning its kudos by way of the title asthe most powerful motorcycle producedin India. The liquid-cooled, 4-valvesingle produces a claimed peak powerrating of 26 horsepower at 8500 rpm.The 292cc engine in the bigger Mojoutilizes a 6-speed transmission to get allthat screaming horsepower to theground via 17" al loy spoke wheelsmounted with disc brakes front and rear(single 320mm front and single 220mmrear).In keeping up with the times the Mojohas inverted front forks and a monoshock suspension arrangement for therear. The press release, backing up the

heavy ad campaign, boasts that theMahindra Mojo's LED taillight and twinbarrel headlight is "sure to rewrite thedesign standard of the Indian bikeindustry."Going by the pict ure the MojoMotorcycle actually has a pretty hipprofile, with tubular trellis frame designand decent flow in its wedged bodywork,tank, under fairing and bikini screen.

No doubt the Mahindra is going to scorebig with this new 2011 motorbike. In acountry hungry for transportationalternatives to serve its burgeoning andyouthful (read: style conscious) workforce numbering in the hundreds ofmillions, it's a smart move. I wonderhow long before Yoshimura has anaftermarket pipe for it? (The Mojo is not currently avai lable in the USA)

2011 MahindraMojo 300 | Preview

In India, Mahindra ‘Mojo’ Motorcycle LaunchedBy Bollywood Actor Amir Khan


When the second-generation GMHybrid System is applied to a four-cylinder common rail diesel the fueleconomy improvements are achievedalong with a corresponding reductionin emissions according to MaurizioCisternino, the GM powertrain Europeadvanced engineering hybrid innovationmanager.During a present ation at the USDepartment of Energy’s 2010 Directionin Engine Efficiency and EmissionsResearch Conference he spoke about aninternal study that included test-bedexperimental engine work and vehicle

tests using an Opel/Vauxhall Corsa witha 1.3litre diesel 95hp Euro 5 engine withmanual transmission. The activitieslooked into the optimisation of hybridcontrol and calibration strategi esincluding: start/stop functionality;star t/ st op ac t ivat ion str ate gy ;enhancement of vehicle transi entperformance; and drivability subjectiveas sess ment in coast and br akeregeneration modes.The test ing r eve al ed a gene ralimprovement of CO and HC emissionsthanks to the decrease in engine idlingtime. There was also a reduction in

exhaust emissions thanks to lowergeneration and quicker DOC light off.Furthermore, nitrogen oxide emissionsimproved by 13 per cent when the EGRfunctionality was mated to the hybridfunctionality, while electric assist alsohelped to reduce emissions.Now GM will continue it’s testing in anattempt to evaluate the synergies of mildhybrid technology with a turbochargerfor optimal turbo-charging; as well aslower temperature EGR; and a valvedeactivation for energy recovery.

GM hybrid study reduces fuel consumption

38


October-2010

www.automark.pk

[email protected]


CHEVROLETModel Price

Rs. 569,000CHEVROLET JOY CNGRs. 539,000CHEVROLET JOY Petrol

Price updated October’ 2010

MEHRAN VX 800ccMEHRAN VX (CNG) 800cc

MEHRAN VXR (CNG)

MEHRAN VXR

ALTO VX 1000cc

ALTO VX (CNG)

ALTO VXRALTO VXR (CNG)

Rs. 443,000Rs. 489,000Rs. 495,000

Rs. 539,000

Rs. 564,000

Rs. 622,000

Rs. 643,000Rs. 692,000

SUZUKIModel Price

TOYOTA COROLLAModel Price

ALTIS 1.8 VVTi M/T

2.OD SALOON M/T

GLI 1.3 VVT-i Rs. 1,450,000XLi 1.3 VVT-i Rs. 1,325,000

2.OD SAL SUNROOF Rs. 1,830,000

2.OD Std. 2000cc Rs. 1,400,000Rs. 1,740,000

Rs. 1,740,000

ALTIS 1.8 VVTi A/T Rs. 1,830,000

LIANA 1.3L RXI MT PETROL

CULTUS VXR

CULTUS VXR (CNG)

CULTUS VXLCULTUS 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 VX PetrolBOLAN VAN VTR PETROL

SUZUKI VAN CARGO

BOLAN VAN VTR GL PETROLBOLAN VAN VTR CNG

LIANA 1.3L LXI (CNG)

Rs. 837,000

Rs. 878,000

Rs. 886,000Rs. 933,000

Rs. 1,140,000

Rs. 1,210,000

Rs. 1,191,000

Rs. 1,256,000

Rs. 512,000

Rs. 522,000Rs. 582,000

Rs. 635,000Rs. 497,000

Rs. 1,255,000

Rs. 463,000

Rs. 514,000

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. 1,370,000

S. Super Saloon 1.6L CNG Rs. 1,450,000

DAIHATSUModel Price

Rs. 7,45,000Rs. 7,30,000

CX ECO (CNG)CX AUTOMATIC

Rs. 7,00,000CUORE 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. 625,000Master 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. 1,424,000CITY I-VETC MT Rs. 1,294,000

CIVIC VTI Mt

CIVIC VTI Mt Oriel

Rs. 1,659,000

Rs. 1,834,000

ACCORD CR-V Rs. 5,316,000

CIVIC VTI Pt Rs. 1,779,000

Rs. 1,909,000

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



Automotive Industry - Update

41



The automobile industry is among theworst hit industries by the recession.Demand for cars witnessed hurtingdeclines exacerbating the alreadyexisting woes of excess productioncapacities. The soft business climate,which characterized the industry evenbefore the recession, worsened evenfurther with the recession inducingpunishing falls in auto sales, draggingthe industry’s major giants into the red.Slowdown in business operations,including gl obal t rade , ac t asimpediments to growth brought aboutby the economic recession. Currentmarket distortions are manifested in theform of restricted access to credit,decline in purchasing power, reductionin household wealth and the resultingpostponement of new car purchases,decline in per capita automobile traveland volatile fuel prices, which althoughcurrently jumpy are skewed moresharply for future upward corrections.The bailout packages offered as succorto the bleeding companies Chrysler,Ford and GM, stand testimony to thedeterioration of the automotive sector.Although the overall deceleration inmarket activity is undeniable, developingcountries have recorded diverse trendsin automobile demand. As against thestagna nt deman d in deve lop edcountries, developing countries likeChina and India have posted increasein sales after a temporary knee-jerk loss

in growth momentum.Agai nst the background of anautomotive industry that is currently ina state of flux triggered by the recession,social, demographic, and environmentaltrends, the natural gas vehicles (NGVs)market not surprisingly faces a mixedbag of challenges and opportunities. Thetrickle down impact of the depressingbusiness climate in the automotiveindustry on the NGV market is reflectedin the growth rates, which have largelyfailed to meet the optimistic expectationsof the pre-recession era. Sales of NGVsrecorded disproportionate declines inthe year 2009, with North Americareporting the worst erosion in sales, asa result of the general tendency ofconsumers to either postpone or evencance l p ur chase of e xp e nsi veautomobiles during difficult economicconditions. With the financial crunchresulting in deep cutbacks on capitale xp e ndi tur e s, as a utomo bi lemanufacturers turn defensive againstuncertain economic pr ospe cts ,i n v e st m e n t s i n R & D a n dcommercializat ion of a lternativetechnology vehicles have taken a hit.This in turn has displa ced timelydevelopment of NGVs. Over the last twoyears, lower oil prices have corruptedthe economic incentive for buying NGVs.Preoccupat ion of both the automanufacturers and consumers in dealingwith the current crisis weakens the

e mp has is on c leane r vehi cletechnologies in the immediate short-term.However, as the year 2010 limps out ona broken economy and paralyzed creditmarkets begi n to reviv e, marketprospects are expected to look up.Additionally, the stimulus and rescuep ackage s offe red to automotiveindustries by governments in Japan andKorea, among others, are being designedto support environmentally friendlyvehicles, which in turn augurs well forthe NGV market. In the post recessionperiod, sales of eco-friendly automobiles,wh ich qualify as next -genera tionalternative-energy powered vehiclescritical to meet carbon reduction goals,wil l r emai n impor tant f or theautomotive industry’s long-term growth.Natural Gas Vehicles (NGVs) especiallyrepresent a bridge that connects to thelower carbon future envisaged by mostgovernments worldwide.Key factors expected to drive futuregrowth in the market include growinglevels of acknowledgment, amonggovernments, consumers and fleetmanagers alike, over the environmentalbenefits of lower emissions from NGVs,and the instrumental role played byNGVs in achieving national self-sufficiency in meeting energy needs.Technology developments that helpresult in incremental improvements inbasic NGV engineering design, such as,

Report by Global Industry Analysts, Inc.

GIA announces the release of a comprehensive global report on NaturalGas Vehicles (NGV) market. Although current growth remains moderated

by the recent world economic recession, global market for natural gasvehicles (NGV) is nevertheless expected to recover poise and

register 28.7 million units in vehicle population by the year 2015.Primary factors fingered to drive this growth include economic and

promotional support extended by governments, volatility in oil prices,technology innovations that further the practicality of NGVs as an

alternative fuel vehicle technology and focus of the automotive industryon cleaner vehicle concepts. Sturdy demand patterns in developingmarkets, particularly Asia-Pacific, also augurs well for the market.

Global Natural Gas VehiclePopulation to Reach 28.7

Million Units by 2015

continued on next page42



India’s first CNG-ElectricHybrid Bus from

Tata MotorsIn the presence of top Ministers of ourcountry and DTC (Delhi TransportCorporation) officials, Delhi ChiefMinister Mrs. Sheila Dikshit createdhistory by flagging off India’s first CNG-Electric Hybrid Bus in New Delhi.Designed and manufactured by TataMotors. Mr. P. M. Telang, MD India Operations,Tata Motors, said on the occasion, “TheCNG- Electric Hybrid Tata Starbus is aresult of Tata Motors’ advances inalternate fuel technologies, includingelectric vehicles. We are grateful to theGovernment of Delhi and the DTC forgiving us this opportunity of showcasinghybrid buses in the city of Delhi duringthe Commonwealth Games. We willeagerly look forward to the feedback ofthe DTC and passengers.”As of now Tata Motors will run only foursuch hybrid buses during the CWG 2010.Tata have developed these low floorhy b r i d b us e s f o r i nt r a-c i tytransportation as they have been

powered by an electric motor and CNGengine.The system is built in such a way thatboth electric motor and CNG engine canwork par al le ly to re duce fuelconsumption and increase efficiency of

the vehicle. The Hybrid bus also utilizesthe energy los t during braki ng torecharge its batteries making it moreenvironment friendly.


durability of components like naturalgas regulators and on-board LNG tanks,

enhancement in engine performance,

will al so ai d in turbocharging themarket’s growth in the medium to long-

term period. R&D revolving around

storage infrastructure/technologies forcompressed natural gas (CNG) and

liquefied natural gas (LNG), is also

deemed as critical to the market’s futuregrowth.

As stated by the new market research

report on natural gas vehicles, Asia-Pacific is the largest and the fastest

growing regional market for NGVs, by

vehicle population. The region continuesto remain a key growth area for the total

market, displaying a robust CAGR of

more than 25% over the analysis period.Economic growth, increased spending

power, an d rise in demand f or

automobiles, particularly in regionalpowerhouses such as China and India,

have been driving NGV sales in Asia-Pacific over the recent years, thereby

adding to the NG V popula tion.

Additionally the incent ives, andmandates for aggressively converting

vehicles to NGVs are driving increased

adopt ion of NGVs in the region.Major market participants include AB

Volvo, Alternative Fuel Systems (2004)

Inc., Bayerische Motoren Werke AG,Chrysler Group LLC, Caterpillar Inc.,

Cummins Inc., Daimler AG, Fiat S.p.A.,

Ford Motor Company, General MotorsCorporation, Honda Motor Co. Ltd.,

Hyundai Motor Company, Isuzu Motors

Ltd., Landi Renzo S.p.A., Mazda MotorCorporation, Mitsubishi Motors

Corporation, Nissan Motor Co., Ltd.,PSA Peugeot Citroën S.A., Renault SA,

Suzuki Motor Corporation, GFI Control

Systems, Toyota Motor Corporation,Volksw age n AG, among other s.

The research report titled “Natural Gas

Vehicles: A Global Strategic BusinessReport”, announced by Global Industry

Analysts, Inc., provides a comprehensive

review of trends, product developments,mergers, acquisitions and other strategic

industry activities. The report provides

market estimates and projections forthe United States, Canada, Japan,

Europe (France, Germany, UK, Italy,

Spain, Russia, and Rest of Europe), Asia-Pacific (Pakistan, China, India, Australia,

Bangladesh, New Zealand, Malaysia,

Indonesia, and Rest of Asia-Pacific),Latin America (Argentina, Brazil,

Colombia, Venezuela, Chile, Mexico,

and Rest of Latin America) and Rest ofWorld......

43



GM promotes electricvehicle in Shanghai ExpoGeneral Motors has been committing tointroducing advanced technologies of autoindustry into Chinese market."added by Gan Wenwei.

On August 31, General Motors deliveredtwo Chevrolet Volt electric vehicles tothe Bureau of Shanghai World ExpoCoordination and provided services forVIPs coming to visi t the Expo.Chevrolet Volt is the first electric vehiclewith extended range in the world, whichhas the significance of milestone in theelectrification development of GeneralMotors. The production version ofChevrolet Volt enters Chinese marketand conducts the trial operation at theExpo site, which are to show the publicadvanced driving system and forward-looking technologies, as well as goodvision of General Motors for sustainabledeve lop me nt of f utur e urb antransportation."General Motors, accompanied by itsChinese partner SAIC, has shown themore intelligent, more efficient andcleaner urban transportation vision tomore than 1.4 million visitors at theSAIC-GM pavilion." said Gan Wenwei,President and General Manager of GMChina Investment Co., Ltd. "ChevroletVolt is the important step to realize thereduction of reliance on oil and exhaustemission in the auto industry. We delivertwo Chevrolet Vol t vehicles of theproduction version that enter into Chinaat the earliest time to the Bureau ofShanghai World Expo Coordination. Itproves again the firm commitment ofGeneral Motors, as one of the global

partners of World Expo, to support thesuccess of Expo."As the vehicles specialized for VIPs ofShanghai World Expo, Chevrolet Voltwill also show the performances andadvantages to people from variousindustries, such as the government, autoindustry and academic circle andmotivate all parties to discuss thesustainable development of future urbantransportation.According to the scheme, Chevrolet Voltwill officially appear on Chinese marketin the year 2011. China will be then thefirst market to introduce the ChevroletVolt outside of the U.S."General Motors has been committingto introducing advanced technologiesof auto industry into Chinese market."added by Gan Wenwei. "Along with theincreasingly growing individual traveldemand and otherwise chal lengescaused by the resulting future urbantr anspor tation development, theadvanced technolog ies of GeneralMotors will provide consumers with thebe st t rans por tat ion solut ions. "Chevrolet Volt is currently the only typeof electric vehicle that can work underall-weather and all-road circumstanceswithout consideration of the capacity ofthe battery. When the driving range isless than 60 kilometers, it can becompletely driven by a vehicle-loadedlithium ion battery of 16 KWH to realize

"zero fuel consumption, zero exhaustemission". When the electric power ofthe vehicle-loaded battery runs out toits minimum limit, the vehicle-loadedengine generator will automatically startto provide electric power for the vehicleto achieve additional range up to 450kilometers or so.Chevrolet Volt realizes the running ofvehicle driven by electric power at full-time and full speed. The electric drivesystem of e xte nd ed r an ge ty pecompletely removes the concern ofconsumers on the short range of electricvehicles.Chevrolet Volt to be launched in Chinesemarket will also be equipped withOnStar system. Apart from the overallvehicle safety and communi cationservices, Chevrolet joins hand withOnStar to develop the first smart-phonesystem in the auto industry that reallyapplies to electric vehi cles. Thi stechnology can help the owner of aChevrolet Volt to achieve 24-hour all-weather remote control of the vehicleand each function of OnStar system andbring in more comprehensive drivingexperience for the own er. Thistechnology even realizes the initialinteraction between the driver and thevehicle as well as the function of remotecontrol in the electric auto industry...


44


Mr. H. Onishi, Managing Officer, Toyota Motor Corporation, Mr. Ali S. Habib, Chairman, Indus Motor Company andIMC Management with the Nationwide Best Performance Award winner - Toyota Central Motors

at the 19th Annual Dealer Conference


Indus Motor Company (IMC) held its19th Annual Dealer Conference recentlyat a local hotel in Karachi. Mr. HirojiOnishi, Managing Officer, Toyota MotorCorporation, Japan was the Chief Guest.The Dealer Conference, which had thetheme, “Leading Together” was attendedby the Company’s dealers, guests fromJapan, senior management from Houseof Habib, business partners and theIndus Team.Speaking on the occasion, Mr. HirojiOnishi praised IMC on achieving themilestone of 52,000 record sales in2009-10 an d congr atu la te d theCompany on increasing its productioncapacity to cater to the demand for itsvehicles. He revealed that Pakistan isone of the most promising countries forToyota and we expect an enormouspotential for futur e growth. Herequested IMC and its dealerships tokeep in mind the philosophy of“Customer First” for better CustomerCare.Prior to the Conference, Mr. H. Onishi

also visited IMC plant where he wasshown the manufacturing processes andwas given a presentation on IMC’sperformance, milestones, productionimprovement activities and future plans.Mr. Ali S. Habib, Chairman, IMC, in hisaddress, mentioned that Paki stancontinues to face a challenging economicenvironment, and the automobile sectorwhich saw unprecedented decline overthe previous two fiscal years has shownmodest signs of recovery in 2009-10.The automobile industry is underconstant pressure from the governmentto reduce prices, despite forex and rawmaterial price escalations, topped byimpending threats to ease the importsof used cars, as a punitive measureagainst the industry. He urged Industeam and its dealerships to continueexerting their fullest despite thechallenges and to attain the higheststandards of quality in all aspects of theb usine ss for greate r C ustomerSatisfaction.Mr . Par ve z Ghias, CEO, IMC ,

highlighted the record accomplishmentsof IMC in the year 2009-10 andexpressed his gratitude to the customers,employees, deal ers, vendors andstakeholders for their contributions. Hestated the Company’s best ever qualityresult of SQA (final product leavingplant) and local parts supplies. Hereiterated the fact that Indus Motor isnot just a car manufacturer, it is awareof the contribution it needs to make toimprove society at large. As a “ConcernBeyond Cars”, the Company has severalsocial projects and initiatives in the areasof road safety, education, environment,health, community development andr esp onse to na tural ca la mities .To recognize the dealers’ efforts, awardswere presented during the conferenceto the best dealerships in the threeregions. The Nationwide Sales Awardwas won by Toyota Faisalabad Motorswhere as the Service, Parts, CustomerRelations and the overall NationwideBest Performance Awards were baggedby Toyota Central Motors…..

Indus Motor holds 19thAnnual Dealer Conference

Speaking on the occasion, Mr. Hiroji Onishi praised IMC onachieving the milestone of 52,000 record sales in 2009-10 and

congratulated the Company on increasing its production capacityto cater to the demand for its vehicles. He revealed that Pakistanis one of the most promising countries for Toyota and we expect

an enormous potential for future growth.

Corporate Event - Update Press Release



In the 1950s, theJapanese askedW . Ed w ar dsD e mi n g , a nA m e r i c a nstatistician andm a n a g e m e n ttheorist, to help

them improve their economy. Byimplementing Deming's principles oftotal quality management (TQM), Japanexperienced dramatic economic growth.In the 1980s, when the United Statesbegan to see a reduction in its own worldmarket share in relation to Japan,Amer ican business rediscoveredDeming. Total quality managementexperts or gurus, Joseph Juran andPhilip Crosby, also contributed to thedevelopment of TQM theories, models,and tools. TQM is now practiced inbusiness as well as in government, themilitary, education, and in non-profitorganizations.TQM is "a system of continuousimprovement employing participativemanagement and centered on the needsof customers". Key components of TQMare employee involvement and training,problem sol ving teams, statisticalmethods, long-term goals and thinking,and recognition that the system, notpeople, pr oduces ine fficiencies.Employee awareness and motivation areessential. The chart below depicts howthe management process constantlystrives for continuous improvement,deliver customer value, and excellence.All are responsible for ensuring quality

in terms of 'satisfying the customer' inall they do, and the approach is one ofprevention of errors and faults ratherthan detection and correction. Typically,cultural change in the company from aninspection to a prevention approach,and to one of involvement is seen asrequired. Organizational change is alsoneeded. A strong emphasis is typicallyalso placed on meeting the customers'requirements and identifying internalcustomers.

Deming’s 14 Points ForImplementing QualityImprovement:1. Create constancy of purposetoward improvement of productand service, with the aim tobecome competitive and to stay inbusiness, and to provide jobs.2. Adopt the new philosophy.3. Cease dependence on inspection

to achieve quality.4. End the practiceo f awa r d i n gbusiness on thebasis of price tag.Instead, minimizetotal cost. Movetoward a singlesupplier for any one item, on along-term relationship of loyaltyand trust.5. Improve constantly and foreverthe system of production andservice, to improve quality andproductivity, and thus constantlydecrease costs.6. Institute training on the job.7. Institute leadership.8. Drive out fear, so that everyonemay work effectively for thecompany.9. Break down barriers betweendepartments.10. Eliminate slogans, exhortations,and targets for the work forceasking for zero defects and newlevels of productivity.11. Eliminate work standards(quotas) on the factory floor.12. a. Remove barriers that robthe hourly worker of his right topride of workmanship.13. Institute a vigorous programof education and self-improvement.

Total QualityManagement VS Six SigmaTQM is "a system of continuous improvement

employing participative management andcentered on the needs of customers".

Key components of TQM are employeeinvolvement and training, problem solving

teams, statistical methods, long-termgoals and thinking.

Exclusive Article on Quality by Engr Khurram Mateen



14. Put everybody in the companyto work to accomp lish thetransformation.

J M Juran sees quality planning as partof the quality trilogy of quality planning,q uali ty c on tr ol and q ua lit yimprovement.

Juran's 'QualityPlanning Road Map'consists of the followingsteps:1. Identify who are the customers.2. Determine the needs of thosecustomers.3. Translate those needs into ourlanguage.4. Develop a product that canrespond to those needs.5. Optimize the product featuresso as to meet our needs as wellas customer needs.6. Develop a process, which is ableto produce the product.7. Optimize the process.8. Prove that the process canproduce the product underoperating conditions.9. Transfer the process toOperations.Illustration of Quality Trilogy via aControl Chart:Juran concentrates not just on the endcustomer, but identifies other externaland internal customers.Six Sigma is a management philosophy

developed by Motorola that emphasizessetting extremely high objectives,collecting data, and analyzing results toa fine degree as a way to reduce defectsin products and services.The term “Six Sigma” is a statistical termthat refers to 3.4 defects per millionopportunities (or 99.99966 percentaccuracy), which is as close as anyoneis likely to get to perfect. A defect canbe anything from a faulty part to anincorrect customer bill.

Six Sigma Consists of 5parts havingabbreviations DMAIC:Define: formally define the goals ofthe design activity that are consistentwith customer demands and enterprisestrategy

Measure: The team identifies thekey internal processes that influenceCTQs and measures the defects currentlygenerated relative to those processes.

Analyze: The team discovers whyidentifying the key variables that aremost likely to create process variationgenerates defects.

Improve: The team identifies themaximum acceptable ranges of the keyvariables and validates a system formeasuring deviations of the variables.The team modifies the process to staywithin the acceptable range.

Control: Tools are put in place toensure that the key variables remainwithin the maximum acceptable rangesAll Six Sigma processes are executed bySix Sigma Green Belts or Six SigmaBlack Belts, which are then overseen bya Six Sigma Master Black Belts, termscreated by Motorola.Six Sigma can be costly to implementand can take several years before acompany begins to see bottom-lineresults.

Comparison andContrast of TQM and SixSigma

Six Sigma is a shorter-term strategy; itis designed to generate immediateimprovements to p rof it margi n.Compared to t raditional qual it ymanagement programs such as TQMthat project three or more years into thefuture.TQM and Six Sigma have anumber of similarities including thefollowing:

• A customer orientationand focus• A process view of work• A continuousimprovement mindset• A goal of improving allaspects and functions of theorganizations• Databased decision-making• Benefits depend highly oneffective implementation

ConclusionBoth measurements of quality controlwithin an organization have broughttrue success to companies who haveapplied their policies and procedures. The leaders and management teams ofany organization will have to evaluatewhich quality of control tactic is themost beneficial to the growth andimprovements of their business. Bothprocesses have taken the best of the bestcountries and companies from good togreat and I personally feel that as longas you have one of these processes inplace, you are setting yourself up forsuccess.....


About Writer:Engr Khurram MateenAssistant DirectorInternational Affairs & TrainingsStandards Development CentrePSQCA,Ministry of Science& TechnologyGovernment of Pakistan - Lahore

Exclusive Article on Quality



Right from the day of launching of theinternationally acclaimed completebuilt-up product line in May 2010,DAEWOO PAK MOTORS (PVT.) LTD,has received tremendous response fromthe commercial as well as governmentpublic transport sectors across thecountry. Customers now respond withutter satisfaction that Daewoo Buses arebest in Fuel Economy, Comfort, Safetyand Longer Life that ensures Return onInvestment in shortest time comparedto all buses in the market.Recently Karachi Coach Service (KCS),one of the biggest inter-city publictransporters operating from Karachi,has inducted three units of DaewooBH116, the most advance state-of-the-Art Air Suspension bus with 340 Hp; inits fleet to introduce the Luxury andSpeedy bus service initially from Karachito Sukkur and further to Lahore andPindi.

INTRODUCTION OF KCS:Karachi Coach Service (KCS) is honoredto be the pioneers of long route publictransport facility named KARACHICOACH SERVICE in 1989. CurrentlyKARACHI C OA CH SERVIC E isoperating from Karachi to various cities

of Pakistan

OWNERS PORTFOLIOThe owners of KCS are the famousfamily of (Late) Malik Haji Abbas Khanwho was known as Baba-e-Transportamong the transport sector.He came to Karachi in the early fifty’sand started business of transport witha camel cart. Now today by the Grace ofAll Mighty Allah and by the vision ofMalik Haji Abbas Khan, his family isrunning about 10 well known and wellestablished transport companies inpublic and Goods Transport sectors.Three sons of (Late) Malik Haji AbbasKhan who stated in the public transportsector wi th the name and style ofKarachi Coach Service (KCS) are MalikHaji M. Ismail, Malik Haji M. Ishaq andMalik Haji M.Shafiq.Malik Haji M. Ismail is also owner ofSajid Goods Transport Co. and New HajiIsmail Transport Co.

Malik HajiM.Ishaq isalso ownerof Al-AbidG o o d sTr an sp ortCo and NewHaji AbbasG o o d sTr an sp ortCo.

KARACHI COACH SERVICEKarachi Coach Service (KCS) started itsoperations in early 1988 with a dedicatedfleet of brand new Hino A/C Buses.Karachi Coach Service (KCS) bearsheav y losse s by running emp tybuses/coaches between Karachi andHyderabad, be cau se there wa sabsolutely no concept of such servicefrom the middle of the city. Very soonKarachi Coach Service (KCS) becamethe most popular Public TransportService.As a result of this success Karachi CoachService (KCS) spread its operationsand once again introduces the First EverAir Conditioned Bus/Coach Servicebetween Karachi and Rawal pindi/Islamabad.

KCS EXPRESS:Karachi Coach Service (KCS) is aboutto launch a newly designed high qualityservice for passengers between variouscities of Pakistan, starting from Karachito Sukkar first with brand new fullye q ui pp e d Dae woo BH 116 AirConditioned & Air Suspension Buseswhich is state of the art product ofDaewoo Pak Motors Ltd.

SALIENT FEATURES OF KCSEXPRESS SERVICEKCS Express service standards withDaewoo buses are planned and designedto meet the public transportationstan dards adopted in deve lopedcountries worldwide such as:• Daewoo trained drivers and attendantsto ensure quali ty service standards• Luxury seats with dedicated headphone facility• All vehicles are equipped with latesttracking systems.• ABS brakes makes the journey moresafe and sound• Air-Suspension gives an unmatchableexperience of comfort• Seat-to-Seat, non-stop and on timeservice ......

INDUCTION OF DAEWOOAIR-SUSPENSION BUS

FLEET INKARACHI COACH SERVICE

Corporate Update

Daewoo Pak Motors Director Marketing Mr. Tahir Javed & ManagerMarketing Mr. Faisal Meraj along with the owners of KCS Malik

M. Ishaq and Malik M. Shafiq on the occasion of delivery.



Fully Electric car is new generationhybrid car. Hybrid means to take powerfrom two sources, previous hybrid carstaking power from engine and electricmotor. Engine helps to charge batteriesbut now in fully electric cars there is noengine, all power is just taken by electricmotor and it is charged while the car ison driving. All the foreign countries wantto use it, the biggest reason behind isthat it’s pollution less car which helpsto make the environment better.Nowa days pollu tion p roblem isincreasing rapidity that’s why everycountry wants to use it as a normal car.The other reason behind is to use electricas alternative fuel; fuel prices are as highas compare to use electric power.General Motors is partnering with theelectric power research institute to makesure this electric car get the infrastructure they disserve, they haveelectric charge stations to chargeli thium-ion battery of car, once thebattery fully charged the worth can travel40miles.

BackgroundYou might not know, electric carsappeared in the 19th Century just likemotor cars, but they failed to becomepopular due to many technical andpractical reasons. For example, thebattery was very heavy, stored littleenergy and took too much time torecharge. As a result, electric carsreceived far less development thanmotor cars.In the late 80s, California legislate a

Zero Emis si on Regula tion whichrequires large car makers to sell a certainpercentage of ZEV (Zero EmissionVehicle), probably 10%, before the year2000 or they will be banned from thestate. This regulation, although laterp ostponed due to the immaturetechnology developed, pushed many carmakers to accelerate their developmentof electric cars.

OperationSTARTING: Powered by electricmotor only. It does not employ theengine during starting, because startingis a heavy load action which greatlyincreases the emission pollutant.Moreover, this arrangement alsobenefits cold start emission, because theelectric pre-heated catalyst has sufficienttime to heat up before the engineintervene.

ACCELERATION: When the cargets up to speed, the engine joins andprovides power together with the electricmotor. The engi ne provid es thenecessary power that pure electric motorcannot provide. On the other hand,electric motor help easing the load takenby the engine, so emission level remainslow.

STEADY SPEED: Still engine +electric motor. However, under lightload, the engine will be switched off.

BRAKING / DOWNHILL: Thisis the most important advantage ofhybrid car. Conventional car wi lleliminate the kinetic energy by braking,which means transferring to heat loss.It will make good use of the kineticenergy to recharge its batteries throughelectric motor (now act as generator),and by the way generate braking force.These double the mileage.Electric cars are something that showsup in the news all the time. There areseveral reasons for the continuinginterest in these vehicles:• Electric cars create less pollution thangasoline-powered cars, so they are anenvironmentally friendly alternative togasoline-powered vehicles (especially incities).

• Any news storyabout hybrid carsusually talks aboutelectric cars as well.• Vehicles poweredb y fuel cel ls areelectric cars, and fuelcells are getting a lotof attention rightnow in the news.An electric car is a car powered by anelectric motor rather than a gasolineengine.From the outside, you would probablyhave no idea that a car is electric. Inmost cases, electric cars are created byconverting a gasoline-powered car, andin that case it is impossible to tell. Whenyou drive an electric car, often the onlything that clues you in to its true natureis the fact that it is nearly silent.Under the hood, there are a lot ofdifferences between gasoline and electriccars:• The gasoline engine is replaced by anelectric motor.• The electric motor gets its power froma controller.• The controller gets its power from anarray of rechar geable batte rie s.A gasoline engine, with its fuel lines,exhaust pipes, coolant hoses and intakemanifold, tends to look like a plumbingproject. An electric car is definitely awiring project.Our future is depend on electricity,nowadays al l the equipments needelectric to work, even in foreign country’sbuildings are generating there ownelectricity by solar energy, wind poweretc., because they know that there futureis not depend on just gasoline.In order to make our environmentbetter, to safe money, to safe time, togrow with the world, we should use newtechnologiesRemember that “Your Place In TheWorld Is Where You Decided It Is”...

Hybrid / Electric CarIn the late 80s, California legislate a Zero Emission Regulation which requires large car

makers to sell a certain percentage of ZEV (Zero Emission Vehicle), probably 10%,before the year 2000 or they will be banned from the state.

GM's EV1, the first mass produced electricpassenger car in the world.It uses lead-acid batteries.

Visite our website for latest

news, articles and events

www.automark.pk

Exclusive Article by Omar Rashdi


MADE IN PAKISTAN MOTORCYCLESRETAIL PRICE LIST

70cc Motorcycle

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Aan AI-70

Asia Hero AH-70

Bionic AS-70

Crown Lifan CRLF-70

Diamond SD-70

Dhoom YD-70

Eagle DG-70

Ghani GI-70

Guangta GT-70

Grace CT-70

Hero RF-70

Hero RF-70 Plus

Habib HB-70

Honda CD-70

Hi-Speed SR-70

Jinan JN-70

Leader LD-70

King Hero KH-70

Moon Star MT-70

Master MD-70

Metro Hi-Tech MR-70

New Asia NA-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.

Product &

Model Name

Pak Hero PH-70

Ravi Premium R1

Ravi Hamsafar-70

Road Prince RP-70

Royal Star RS-70

Royal RL-70

Racer AS-70

Safari SD-70

Sakai SK-70

Star DL-70

Sohrab JS-70

Sonica SM-70

Super Asia SA-70

Super Star SS-70

Super Power SP-70

Super Power Delux

Toyo TG-70

Target TT-70

Unique UD-70

Union Star US-70

United US-70

Zxmco ZX-70

Retail Price

Rs. 42,500/=

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. 39,500/=

Rs. 39,500/=

Rs. 40,500/=

Rs. 45,000/=

Rs. 38,500/=

Rs. 38,500/=

Rs. 41,000/=

Rs. 42,000/=

Rs. 38,000/=

Rs. 40,500/=

Sr./No.23.24.25.26.27.

28.29.30.31.32.33.34.

35.36.37.38.39.40.41.42.

43.44.

50AUTOMARK | October-2010

Price updated Oct-2010


MADE IN PAKISTAN MOTORCYCLESRETAIL PRICE LIST


125cc Motorcycle 100cc MotorcycleBrand & Model Name

Habib HB-125

Sitara ST-125

Ghani GI-125

Hero RF-125

Honda CG-125 STD

Honda CG-125 DX

Metro MR-125

Ravi Storm-125 Euro II

No.

1.

2.

3.

4.

5.

6.

7.

8.

Retail Price

Rs. 88,000/=

Rs. 55,000/=

Rs. 54,500/=

Rs. 75,000/=

Rs. 86,500/=

Rs. 108,900/=

Rs. 55,500/=

Rs. 78,000/=

Brand &Model Name

Asia Hero AH-100

Ghani GI-100

Habib HB-100

Honda CD-100

Sitara ST-100

Super Star SS-100

Super Power SP-100

Unique UD-100

No.

1.

2.

3.

4.

5.

6.

7.

8.

Retail Price

Rs. 46,000/=

Rs. 45,500/=

Rs. 55,000/=

Rs. 70,900/=

Rs. 51,000/=

Rs. 46,000/=

Rs. 45,500/=

Rs. 52,000/=

Sr./

No.

1.

2.

3.

Yamaha MotorcycleProduct &

Model Name

Yamaha YD100

Yamana Yama4

Yamaha YB100 Royale

Retail Price

Rs. 73,300/=

Rs. 69,900/=

Rs. 70,000/=

Sr./

No.

1.

2.

3.

4.

5.

Suzuki MotorcycleProduct &

Model NameSuzuki Sprinter ECO

Suzuki Sprinter STD.

Suzuki GS-125Suzuki GS-150

Suzuki Shogan

Retail Price

Rs. 67,000/=

Rs. 70,000/=

Rs. 79,900/=

Rs. 86,000/=

Rs. 76,000/=


Automark October 2010

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