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Automotive industry in Pakistan. By Ali Raza Behrani under-graduate of SIBA
1.
2.
3. Before purchasing a car what a customer
need from a car?
Drive quality Fuel efficiency Comfort
Value for money
and safety.
More Durable Lower on the list
of considerations
5. Problems in Pakistan regarding Automobile
Industry?
Locally assembled cars
Overpriced
Low fuel
economy
Occasionally
quality of local
cars
Substandard
parts.
6. Khalid Rashid: A Auto dealer
• “Used cars are not a threat; the problem is that manufacturers do not listen to
customers, they are not willing to face reality.”
• If that happens continuously than
• Many people prefer to buy a Japanese assembled used car
7. •The local industry produced just over 116,000
passenger cars (800cc to 3000cc) in FY 2013-14 and sold
just over 118,000 cars in the same period (a mere 0.6%
increase over last year).
8.
9.
10.
11.
12.
13.
14. What about Price?
• http://www.paksuzuki.com.pk/automobile/pages/allpricesautomobil
e.aspx
• Can middle class Pakistanis afford a vehicle ?
15. What are the some other factors ?
Local Cars
• New ones
• lack of choices in every engine size
• customer perception about locally
assembled cars is not good
regarding Smaller engines
• not good value for money after
sale
• Less affordable
• 1000cc and below category are the
Mehran, the Cultus and more
recently the Wagon R.
Japnese cars
• Used ones
• More available choices in every
engine size
• Perception about Japnese used
cars is satisfactory regarding
Smaller engines
• Good value for money after sale
• More affordable
• Mostly from 660cc to 1000cc Cars
are imported
16. Lack of Variations in Small Engines
Import of used car’s: from Japan
High Price’s of the Car’s
17. Government policy’s regarding Import of the cars
Three year old
car’s age limit
Political
uncertainty
Energy
crunch and
Five year old
car’s age limit
Financial
crisis
Terrorism
18.
19.
20.
21.
22. Prices in the Other Countries?
• Similar vehicles are 30 to 50% cheaper in
• India, Thailand and Vietna
• Why?
• Because Local industry is unable to produce any electrical or
mechanical components locally
• Because the manufacturing process and in the fact that the local auto
industry functions like a cartel(1An association
of manufacturers or suppliers with the purpose of maintaining prices
at a high level and restricting competition).
33. Due to higher sales:
A.Director said:
i. Margins increased
ii. Treasury income increased
iii. Control on fixed assets has been improved
iv. 450 new jobs during FY14 has been generated
37. Auto industry as main drivers of:
What?
• Economic growth
• Stability
• Technological progress
• Major employer
• Taxpayer
38. What are the Economic factors?
• Macro-Economics factors
• low GDP growth
• higher car prices due to the depreciation of the rupee
• wealth disparities (reflected in the fact that 49% cars
sold in 2013-14 were priced from Rs 1.2 million
upward)
• lack of affordable car financing schemes as a result of
high interest rates.
39. Workforce in the other countries associated
with Auto industry:
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
Japan America South Korean
Workforce %
Workforce %
40. Contribution in the taxes by the Auto Industry
9.50%
13%
8%
4%
0%
2%
0% 0%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
Japan Us India Pakistan
Percentage
Countries
Taxes contribution by the countries
Federal State
41. Government role
• lowered the age limit of used cars that can be
imported into Pakistan.
• from five to three-year-old cars.
• In result Automobile car’s became more expensive.
• local auto industry is unwilling or unable to produce
cars that are in keeping with customer needs and
demands
• The result is that the consumer is the ultimate loser.
42. A. Government should quickly make new auto policy and
decides how it wishes to pursue growth:
i. Through manufacturing
ii. Trading
A. “No auto manufacturing country permits liberal import of
used cars as Pakistan. The government will do well to
tighten this policy if the domestic auto industry is to
flourish.”
43. Import of used cars in other countries
•Ali Asghar Jamali said:
•Countries like India and Thailand had restricted the
import of used cars,
•and using tariff and non-tariff barriers
•In-order to ensure that domestic production is not
hurt irretrievably(impossible to recover or get back).