AUTOMOBILE SECTOR OF

PAKISTAN
 Overview

Features of deletion policy in 1996:

 Industry Specific Deletion program.

 No roll back from achieved Deletion Levels.
 Even handled Tariff Protection at all levels of processing.
 Major Policies After 2005

 Tariff Based Systems (TBS)

 Auto Industry Development Program (AIDP).
 Policy Wise Growth Of Auto Sector (PC + LCV)

More than 30 policy changes

Taxi Scheme

Source: PAMA
 Information About Auto Sector

Description 2007-2008

Total Investment Rs. 100 Billion

Total Contribution to GDP 3.5%

Total Revenue to GOP 10%

 Installed Capacity Of Cars And LCVs

Capacity unit/annum
Pak Suzuki Motor Co. Ltd, Karachi
Public Limited Company with 72.82% shares and management held
by Suzuki Motor Corporation, Japan.
150,000

Indus Motor Co. Ltd, Karachi

Joint venture between Habib Group, Pakistan,
Toyota Tsusho Corporation, Japan (Toyota and Cuore
50,000

Honda Atlas Cars (Pak) Ltd, Lahore

Joint venture between Atlas Group Pakistan and
Honda Motor Co. Japan.
20,000

Ghandhara Nissan Ltd

Technical cooperation agreement with Nissan Motors, Japan.
6,000

Dewan Farooq Motors Ltd

Technical cooperation agreement with Hyundai
Corporation, South Korea. 25,000

251,000

Source: PAMA (Updated to FY. 2007-2008)

 Present Situation Of Sector

 In the budget 2007-08, government announced a withholding @ 5 percent on

purchase of cars which was reduced to 2.5 percent and imposed from 1st
September 2007.
 
 Last year, the ECC approved the five years policy (AIDP) for auto sector prior to
announcement of budget.
 
 The uplift in the car market is also suffering due to strict regulations announced
by State Bank of Pakistan recently for car financing.

 With low custom duty rates for CBUs and unprecedented import of used cars,
the local industry is putting utmost effort to survive and looking at the
government not to deviate from the pre-announced policy.
 Policy Wise Growth Of Auto Sector (PC + LCV)

Source: PAMA
 Present Situation Of Sector

 In the budget 2007-08, government announced a withholding @ 5 percent on

purchase of cars which was reduced to 2.5 percent and imposed from 1st
September 2007.
 
 Last year, the ECC approved the five years policy (AIDP) for auto sector prior to
announcement of budget.
 
 The uplift in the car market is also suffering due to strict regulations announced
by State Bank of Pakistan recently for car financing.

 With low custom duty rates for CBUs and unprecedented import of used cars,
the local industry is putting utmost effort to survive and looking at the
government not to deviate from the pre-announced policy.
 Production Of Cars

CAR 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

1300-1600cc (2000cc Diesel) Upto-Mar'08

Honda (Civic) 4,610 5,998 12,359 12,274 5,610 4,347

Honda (City) 3,786 7,417 11,771 17,606 10,461 6,206
Suzuki (Baleno) 2,608 4,153 5,965 2,939 0 0
Suzuki (Liana) ~ ~ ~ 5,370 5,964 2,306
Toyota (Corolla) 12,861 20,525 23,007 31,094 35,036 24,396
Nissan (Sunny) 51 26 0 0 0 0
Kia (Classic NGV) 459 188 465 0 0 0
Kia (Spectra) 384 73 1 0 0 0
1000cc
Suzuki (Khyber/ Cultus) 8,097 10,810 15,591 21,342 29,880 19,852
Suzuki (Alto) 4,775 7,196 11,411 17,513 21,546 14,407
Hyundai (Santro Plus) 3,114 7,902 6,101 8,604 2,225 1,527
800c
Daihatsu (Cuore) 4,580 6,468 8,525 7,883 12,786 8,933
Suzuki (Mehran) 16,748 27,705 31,207 35,433 36,988 26,933
Suzuki (Bolan) 4,359 5,201 7,319 10,429 15,520 13,051
TOTAL CARS: 66,432 103,662 133,722 170,487 176,016 121,958

Source: PAMA
 Production Of Trucks

TRUCK 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Upto-Mar'08

Hino 792 1,020 1,196 1,499 2,244 1,831

Nissan 627 898 1,306 1,652 829 593

Dong Feng 510 104 23 4 3 0

Master ~ ~ 551 466 380 341

Isuzu N.A. N.A. 128 897 954 552

TOTAL TRUCKS: 1,929 2,022 3,204 4,518 4,410 3,317

Source: PAMA
 Production Of Buses

BUS 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Upto-Mar'08

Hino 756 1,195 1,392 668 744 635

Nissan 60 96 120 48 31 48

Dong Feng 480 89 110 40 8 10

Master ~ ~ 21 6 5 5

Isuzu N.A. N.A. 119 63 205 140

TOTAL BUSES: 1,296 1,380 1,762 825 993 838

Source: PAMA
 Production Of Farm Tractors

FARM TRACTOR 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Upto-Mar'08

Fiat (New Holland) 12,114 16,637 20,840 24,574 27,018 18,195

Millat (Massey Ferguson) 14,126 19,133 22,360 24,313 27,080 19,031

TOTAL FARM TRACTORS: 26,240 35,770 43,200 48,887 54,098 37,226

Source: PAMA
 Production Of Motorcycles

MOTORCYCLE  2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Upto-Mar'08

Honda 115,924 190,679 287,271 360,561 331,621 329,816

Yamaha 27,427 50,407 71,560 74,423 56,282 48,633
Suzuki 13,610 27,863 26,234 16,954 27,309 23,712
Sohrab 6,801 12,396 12,065 14,804 7,514 4,578
Sohrab (Triwheeler) 1,343 3,031 3,258 2,166 2,817 1,498
Qingqi(2 & 3 wheeler) 10,064 19,007 15,801 17,198 15,926 22,135
Hero ~ ~ ~ 34,018 25,798 18,646
Ravi ~ ~ ~ ~ ~ 17,763
Sazgar (Triwheeler) ~ ~ ~ ~ ~ 7,268
TOTAL MOTORCYCLES: 175,169 303,383 416,189 520,124 467,267 474,049

Source: PAMA
 Sales Of Cars

CAR 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

1300-1600cc (2000cc Diesel) Upto-Mar'08
Honda (Civic) 4,637 6,097 12,352 11,998 6,513 4,146
Honda (City) 3,749 7,271 11,714 16,136 11,848 6,355
Suzuki (Baleno) 2,588 4,062 5,879 3,173 0 0
Suzuki (Liana) ~ ~ ~ 4,571 6,067 2,420
Toyota (Corolla) 12,867 20,321 23,002 30,527 35,762 24,223
Nissan (Sunny) 69 25 1 0 0 0
Kia (Classic NGV) 687 81 546 0 0 0
Kia (Spectra) 434 127 7 0 0 0
1000cc
Suzuki (Khyber/ Cultus) 7,927 10,795 15,611 21,390 29,837 19,342
Suzuki (Alto) 4,701 7,148 11,431 16,823 21,988 13,685
Hyundai (Santro Plus) 3,135 6,922 7,009 7,031 3,470 1,745
800cc
Daihatsu (Cuore) 4,579 6,339 8,592 7,883 12,776 8,671
Suzuki (Mehran) 16,582 27,432 31,165 35,982 37,007 26,675
Suzuki (Bolan) 4,360 5,228 7,241 10,451 15,566 12,984
TOTAL CARS: 66,315 101,848 134,550 165,965 180,834 120,246

Source: PAMA
 Sales Of Trucks

TRUCK 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Upto-Mar'08
Hino 758 948 1,262 1,449 2,035 1,919

Nissan 614 845 1,326 1,478 871 828

Dong Feng 511 75 27 16 2 0

Master ~ ~ 565 464 378 303

Isuzu ~ ~ 165 866 938 610

TOTAL TRUCKS: 1,883 1,868 3,345 4,273 4,224 3,660

Source: PAMA
 Sales Of Buses

BUS 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Upto-Mar'08
Hino 795 1,187 1,293 649 770 682

Nissan 36 107 93 79 47 28

Dong Feng 501 69 131 47 16 18

Master ~ ~ 23 10 6 4

Isuzu ~ ~ 65 142 139 120

TOTAL BUSES: 1,332 1,363 1,605 927 978 852

Source: PAMA
 Sales Of Farm Tractors

FARM TRACTOR 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Upto-Mar'08

Fiat (New Holland) 12,617 16,888 21,163 24,649 26,927 18,342

Millat (Massey Ferguson) 14,215 19,012 22,415 24,153 27,125 18,754

TOTAL FARM TRACTORS: 26,832 35,900 43,578 48,802 54,052 37,096

Source: PAMA
 Sales Of Motorcycles

MOTORCYCLE  2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Upto-Mar'08
Honda 117,201 190,424 287,172 360,110 332,068 330,122

Yamaha 27,886 50,435 71,498 74,293 56,243 47,697

Suzuki 13,788 27,435 26,002 17,183 27,424 23,184

Sohrab 2,403 12,494 12,127 13,943 7,835 4,835

Sohrab (Triwheeler) 585 3,013 3,186 2,218 2,839 1,510

Qingqi(2 & 3 wheeler) 10,010 17,855 17,081 15,757 15,035 23,359

Hero ~ ~ ~ 33,136 25,909 18,833

Ravi ~ ~ ~ ~ ~ 17,483

Sazgar (Triwheeler) ~ ~ ~ ~ ~ 7,268

TOTAL MOTORCYCLES: 171,873 301,656 417,066 516,640 467,353 474,291

Source: PAMA
SWOT ANALYSIS
 Strengths

 Increasing Demand for Cars.

 Resale of Local Assembled Cars.
 Quality of local cars.
 OEM.
 CNG kit.
 Mechanics.
 Weakness

 WTO—Deletion program:
The condition of the LCR was an aberration to the Clause 5.2 of the WTO
Agreement on Trade Related Investment Measures (TRIMs), Article III–-
National Treatment under the GATT, 1994.
 Input Cost:
It is estimated that by the year 2012, auto industry consumption of electricity
will cross 500 – 600 MW from around 250 - 300 MW, as of now.
 Protection level.
 Lack of skilled manpower for modern machinery.
 Scarcity of raw material especially steel.
 Opportunities

 Import German technology and skills.

 Foreign Investment and setup production facilities.
China National Heavy Duty Truck Corporation (CNHDTC)
 Ethanol Fuel.
 Threats

 Smuggling of auto parts.

 Competition from import cars.
 Fuel prices.
 Decreasing tariff structure.