This report is regarding the impact on local auto-mobile industry due to the import of used cars.

1. AUTOMOBILE
INDUSTRY
ABSTRACT
This report is regarding the impact on local automobile
industry due to the import of used cars.
Dr. Tahir Ali
Business Research Report

2. 1 | P a g e B u s i n e s s R e s e a r c h R e p o r t
Table of Contents
1. Narrow Down Chart..........................................................................03
2. History of Automobile Industry........................................................04
3. Current Market Share Holder...........................................................05
Pak Suzuki...................................................................................05
Atlas Honda……………………………………………………………………..05
Indus Motors Toyota…………………………………………………………06
4. Current Performance of Automobile Industry.................................07
Cars Production & Sales Level……………………………………………09
Market Share of Local Cars……………………………………………….09
5. Overview of Imported Cars…………………………………………………….10
Comparison between Imported & Used Cars………………………10
6. Problem Statement…………………………………………………………………13
Hypothesis……………………………………………………………………….14
Population………………………………………………………………………..15
Sample Table……………………………………………………………………21
Questionnaires………………………………………………………………….22
Summary …………………………………………………………………………28
Conclusion……………………………………………………………………….32
7. References……………………………………………………………………………..33

3. 2 | P a g e B u s i n e s s R e s e a r c h R e p o r t
ACKNOWLEDGEMENT
In the name of “Allah”, the most Beneficent and Merciful who gave
usthe strength and knowledge to complete this report. This report is a
part of our course. This has proved to be a great experience. This report
is a combined effort of Asad Ahmed, Neelam Abdul Khaliq, Nasar
Wahab, Zainab Raza and Irtaza Zaidi.
We would like to express our gratitude to our subject teacher Dr. Tahir
Ali; who gave us the opportunity to prepare this report.
We would also like to especially thank the representatives of
Automobiles Dealers:
Mr. M. Raheel (Honda Drive in),
Mr. M. Shahid (J.P Trading Co.),
Mr. Naseem Iqbal (Suzuki Macca Motors),
Mr. Naveed Akhtar (Toyota Eastern),
Miss Quratulain Rashid (Suzuki Macca Motors)
They all participated in a focus group session to make our work better.
They gave us many helpful comments which helped us a lot in
preparing our report.

4. 3 | P a g e B u s i n e s s R e s e a r c h R e p o r t
Chart – Narrow Down Of The General Problem Area
Automobile Industry
Passenger Cars Trucks Other Vehicles
Locally Manufactured
Cars
Imported Cars
Losses To Local Manufacturers

5. 4 | P a g e B u s i n e s s R e s e a r c h R e p o r t
HISTORY OF AUTOMOBILE INDUSTRY IN PAKISTAN
The Pakistan automobile industry is a crucial part of our growing economy. It has gone through
different phases 1950’s (Private sector).1960’s (Private sector). 1970’s (Nationalization).1980’s
and onwards (Privatization & entry of private sector).
The industry started in Pakistan when the first automobile plant was set up in May 1949 by
General Motor & Sales Co., it was set up on an experimental basis, and however, it grew into an
assembly plant for Bedford Truck and Vauxhall cars. Seeing such progress, three major auto
manufacturers from the U.S collaborated with Pakistani business men to set up; Ali Automobiles
to manufacturer Ford Products in 1955, Haroon Industries to assemble Chrysler Dodge cars in
1956, Khandawalla industries to assemble American Motor Products in 1962, and Mark Trucks
Plant in 1963. However, the absence of technological knowledge, the basic professionalism, led
to demise of these organizations.
Our industry operates under franchise and technical cooperation agreement with Japan, Europe,
Korea and China.
The auto industry in Pakistan is fast evolving as a robust industry. Some sub-sectors of this fast
growing industry, like motorcycle production, have already achieved economies of scale. The
level of motorization has also been gradually rising over the years. In 1998-99, it was three cars
per 1000 persons, which has significantly increased to 11 cars per 1000 persons in 2005-06. The
indigenous production of motorcycles increased by 25 per cent during 2005-06, reaching to an
all-time high of 520,124 as compared to 106,797 units in 1996-97, which accounts for around
380 per cent increase in motorcycle production during the last nine years. The production of
trucks as well as that of buses has also posted sufficient increase during the last 10 years. Some
2,994 units of trucks were being produced in the country in 1995-96 which, over the years, have
increased to 4,518 units, showing a rise of 51 per cent. In the case of buses, the rise in production
is more pronounced as compared to that of trucks as their production augmented by around 74
per cent during the last decade or so. Investment in the automobile industry in Pakistan started in
the mid-50 when Kandawalla Industries established its units for assembling buses and trucks, the
company's name was later changed to NayaDaur Motors. National Motors took the
indigenization when it came out in the 60's and was said to have reached above 80% deletion of
the Bedford lorries and trucks before it closed down.
Towards the end of the seventies, all automobile assembly in Pakistan stopped, until 1983 when
PAK SUZUKI started manufacturing their vehicles in Pakistan. Further Toyota Indus Motors
was setup, followed by Honda.
Today we have four major automobile manufacturing industries, these include, Toyota Indus
Motors, Pakistan Suzuki, Honda Atlas and Diwan Farooq Ltd.

6. 5 | P a g e B u s i n e s s R e s e a r c h R e p o r t
Current Market Share Holders
Suzuki
The firm was founded in 1983 as a joint venture between the government of Pakistan and Suzuki
Motor Japan, formalizing the arrangement by which Awami Auto Ltd. had produced the Suzuki
SS80 from 1982. Suzuki originally owned 25% of the stock, and have gradually increased their
holding; they now own 73.09%. Pak Suzuki is the market leader in Pakistan Automobile Market
by having more than 60 % (December, 2011) of Market Share. Having Market Share of more
than 50% since its inception, Pak Suzuki always strive to introduce new and innovative Products
and Services.
Pak Suzuki has the largest Dealers network offering 3S (Sales, Service and Spare Parts) facilities
across Pakistan. Its recently launched Suzuki Swift Brand has helped Pak Suzuki increase their
Market Share in 1300cc segment. Apart from giving automobile related services like Suzuki
Finance and Suzuki Insurance, Pak Suzuki also deals in Pak Suzuki Certified Used Cars.
All cars by Suzuki Pakistan generally lack essential features which are standard in other cars,
such as airbags, rear windshield defogger and rear seat belts. As of 2006, the Pakistani-
assembled Suzuki Mehran is sold equipped with a CNG tank and is one of the few cars in the
world which still uses a carburetor-based engines.However from the end of 2012 Suzuki Mehran
got equipped with EFI engine.
Toyota
The Indus Motor Company Limited (IMC) is a joint venture between the House of
Habib, Toyota Motor Corporation, Japan (TMC), and Toyota Tsusho Corporation, Japan(TTC)
for assembling, progressive manufacturing and marketing of Toyota vehicles inPakistan since
July 1, 1990. Indus Motor Company are Manufacturers, assemblers, distributors and importers of
Toyota and Daihatsu vehicles, spare parts and accessories in Pakistan.
The company was incorporated in Pakistan as a public limited company in December 1989 and
started commercial production in May 1993. The shares of company are quoted on the stock
exchanges of Pakistan. Toyota Motor Corporation and Toyota Tsusho Corporation have 25%
stake in the company equity. The majority shareholder is the House of Habib.
IMC's production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an area
measuring over 105 acres (0.42 km2
).
Indus Motor Company’s plant is the only manufacturing site in the world where both Toyota and
Daihatsu brands are being manufactured.
Heavy investment was made to build its production facilities based on state of art technologies.
To ensure highest level of productivity world-renowned Toyota Production Systems are
implemented.

7. 6 | P a g e B u s i n e s s R e s e a r c h R e p o r t
IMC's Product line includes 6 variants of the newly introduced Toyota Corolla, Toyota Hilux
Single Cabin 4x2 and 4 versions of Daihatsu Cuore. They also have a wide range of imported
vehicles.
Honda
The Atlas Honda Limited is a joint venture between the Atlas Group and Honda Motor
Company, Japan. The Atlas Honda was created by the merger of Panjdarya Limited and Atlas
Autos Limited. In 1988, both these motorcycle manufacturing concerns were established by
the Atlas Group. Atlas Honda manufactures and markets Honda motorcycles in collaboration
with Honda Motor Company. Atlas Honda also manufactures various hi-tech components in-
house in collaboration with leading parts manufacturers like Showa Atsumitech, Nippon
Denso and Toyo Denso. Atlas Honda Plants are located in Karachi,and Sheikhupura.
Honda Atlas makes two Honda Models in their plant located in Pakistan. They are Honda Civic
and City. Honda Atlas began their assembly of Honda City in the year of 1997. The car was at
first available in the 1.3 liter but soon was available in both 1.3 and 1.5 liter engines. Along with
these two models, the company sells Honda Accord to Pakistani customers but is imported from
Japan. Honda Atlas assembles four motorcycles in Pakistan, the CD70, CD100, CG 125 and CG
125 Deluxe

8. 7 | P a g e B u s i n e s s R e s e a r c h R e p o r t
CURRENT PERFORMANCE OF AUTOMOBILE
INDUSTRY IN PAKISTAN
Pakistan Automotive Manufacturers Association (PAMA) has just released the local
automobile industry’s sales and production numbers for the month of August’12. As per the data,
car sales have witnessed a substantial decline of 30% YoY to 20,687units in 2MFY13 as against
the sales of 29,537units in the corresponding period last year. However, on monthly basis,
industry sales remained with 10,335 units in the month of August’12 in comparison of 10,352
units in the previous month. Overall industry sales were lower because 1) higher based effect due
to end of the Government of Punjab’s yellow cab scheme 2) massive increase in the prices of
various variant due to Rupee devaluation and increased of being Euro II compliant 3) suspension
of Alto which is 1000cc car have shifted interest of the buyers toward imported cars.
Pak Suzuki Motor Company Limited (PSMC) has witnessed a 37% YoY decline to 11,617
units in 2MFY13 as against the sales of 18,301 units in same period last year. Suzuki Cultus
under the domain of 1000cc segment witnessed a decline of 14% YoY to 2,308 units in the
comparison of 2,672units in the same period last year, followed Suzuki Mehran whose sales
were down by 12%YoY to 4,832 as against 5,515 units in 2MFY12. Biggest decline was seen in
the sales of Suzuki Bolan which has experienced a decline of 41% YoY to 1,624 units in
2MFY13 as against the sales of 2,775 units in the 2MFY12. Sales of Bolan and Mehran were
lower due to higher base effect as during the same period last year sales of these two were higher
because of the deliveries to the Government of Punjab on account of Yellow Cab Scheme. In
addition to that, suspension of the Alto production which was the hot cake segment under the
1000cc category has also impacted the sales negatively. However, Suzuki Swift maintained its
higher sales as during 2MFY13 its sales were up by 45%YoY to 3,793 units as against the sales
of 2,608 units in 2MFY12.
Indus Motor Company Limited (INDU) witnessed has also witnessed 30% YoY a decline in
sales to 6,179 units in 2MFY13 as against 8,829 units in the same period last year. Toyota
Corolla posted decline in sales of 28% YoY to 5,264 units in 2MFY13 as against 7,362units
were recorded in 2MFY12. However, sales of the Hilux, under pick-ups segment showed a rise
in sales by 35%YoY to 846 units as against 627 units in the same period last year.
Honda Atlas Cars Pakistan Limited (HCAR) stood the only cars assembler whose sales have
increased in 2MFY13, as its sales showed a growth of 20%YoY to 2,891 units against the sales
of 2,407 units in the 2MFY12. The higher sales were only because the increase in demand for the
CITY whose sales were up by 48% to 2,184 units in 2MFY13 as against the sales of 1,475 units
in 2MFY12, while, sales of the Civic were down by 24% YoY to 707 units as against the sales of
932 units in 2MFY12. However, on the monthly basis, the sales of the company were down by
25%.
As far as the market Share is concerned, Pak Suzuki Motor Company leads the market with 56%
Market share followed by Indus motor company and Honda Atlas Cars with 30% and 14%
market share respectively in 2MFY13.

9. 8 | P a g e B u s i n e s s R e s e a r c h R e p o r t
We see further pressure on the car sales going forward due to exorbitant increase in prices and
persistent influx of imported cars as around 54,000 cars were imported in FY12 by the auto
dealers under gift, personal baggage scheme which is termed as the misuse of privilege by the
local industry players. The local industry has also demanded the GoP to restrict the import of
used cars to 3 years as they complained these tempered meter and non-Euro Compliant. We
believe if the measure are taken by the GoP we can see a bounce back in sales volume.

10. 9 | P a g e B u s i n e s s R e s e a r c h R e p o r t
56%30%
14%
Market Share
Suzuki
Toyota
Honda
Market Share of Local Cars

11. 10 | P a g e B u s i n e s s R e s e a r c h R e p o r t
OVERVIEW OF IMPORTED USED CARS
The numbers match the reality on the roads. Imports are gaining ground. 26 out of every
100 cars sold in 2011-12 were imports, according to data compiled by PAMA.
The share of imported cars has phenomenally increased as more than 55,000 cars reached the
country, up 162% from 21,000 cars imported a year ago.
However, at the same time, sales of locally assembled cars also surged by 23 percent to 157,325
units compared with the preceding year’s 127,944 units.
In line with the local trend, Toyota, Suzuki and Honda constitute the largest share in the import
market. Other than these three, Mitsubishi and Nissan also have a noticeable share.
Car importers are trying to convince the government to increase the age of imported used cars to
10 years from the current 5 years.
Car importers believe they can easily double car imports from the present 55,000 to around
100,000 if the government increases the age limit.
1000cc and below lead the way
Of the five engine categories, around 45% of total imports belong to 1000cc and below category
that includes Toyota Vitz, data shows.
Toyota Vitz and Toyota Passo are the leading Toyota models while Daihatsu Mira is also
popular in small cars, dealers said.
The other four engine categories, 1000cc and above, together constitute the remaining 55% of
car imports.
Analysts believe that the share of 1000cc and below category will further increase with the
changing dynamics of the local market. With the discontinuation of DiahatsuCuore and Suzuki
Alto, imported cars of 1000cc or less are expected to fill the gap left in the local market.
The reason behind the rising demand of imports is the shrinking difference between the price of
locally assembled cars and their foreign counterparts.
Customers prefer used Japanese cars because of variety, uniqueness and quality despite them
being slightly more costly than local counterparts.
Vitz 2006 and 2007– one of the popular imports in the 1000cc category – is available for Rs0.9
to 1 million while Suzuki Cultus, popular local hatchback in the same segment, is available for
Rs965, 000.
The relatively classier locally assembled Suzuki variant Swift – belonging to the 1000cc to
1300cc category –is priced between Rs1.2 million and Rs1.3 million, slightly higher or in the
same range as imports from Japan.
Cars and other automobile vehicles are being imported through three major schemes; personal
baggage scheme, transfer of residence scheme and gift scheme. Of the total, 98% have been
imported under the personal baggage scheme while 1,050 cars reached the port under transfer of
residence and gift schemes.

12. 11 | P a g e B u s i n e s s R e s e a r c h R e p o r t
Cars with up to 1000cc engines is the leading category more than 24,507 cars units, bringing its
share to 44.5% of total car imports in fiscal year 2012.
The second leading category was 1301cc to 1500cc cars which stood at 17,601 units and made
32% of total car imports.
The third category was 1001cc to 1300cc segment in which 7,882 units were imported and
constituted 14.3% of the market share. In the gas guzzler category of cars belonging in the
1601cc to 1800cc category, 3,986 units were imported.
Comparison between Imported Cars & Local Cars
45%
14%
32%
9%
Imported Used Cars Categories
upto 1000cc
1001cc to 1300cc
1301cc to 1500cc
1501cc to 1800cc
21000
55000
127944
157325
2011 2012
Comparison
Imported Cars Local Cars

13. 12 | P a g e B u s i n e s s R e s e a r c h R e p o r t
Overall Market Share
74%
26%
Market Share
Local Cars
Imported Used Cars

14. 13 | P a g e B u s i n e s s R e s e a r c h R e p o r t
PROBLEM STATEMENT
The purpose of this research report is to examine the effects of
Imported used cars on the local automobiles manufacturers.

15. 14 | P a g e B u s i n e s s R e s e a r c h R e p o r t
HYPOTHESIS:
Directional Hypothesis:
Instability in local currency increases the losses to the local automobile
manufacturers. (Positive relationship)
Heavy government taxes on the import of spare parts leads to the heavy
losses to the automobile manufacturers. (Positive relationship)
Rapid increase in the import of used cars, increase the losses to the
automobile manufacturers. (Positive relationship)
Non Directional Hypothesis:
There is a significant difference in the instability of local currency and the
losses to the local automobile manufacturers.
There is a relationship between the government taxes and losses borne by
the local automobile manufacturers.
There is a significant difference between the import of used cars and losses
borne by the local automobile manufacturers.

16. 15 | P a g e B u s i n e s s R e s e a r c h R e p o r t
POPULATION
Local Authorized Dealers (Karachi)
Pak Suzuki:
1. I.G Motors
Address: C-15, Block-20, F.B. Area, Karachi.
Phone: (021) 36808871-3, 36805935-7, (021) 111-717-273
E-mail: igmotors@gmail.com
Website: www.igmotors.com.pk
2. Suzuki Khair Agency
Address: 12, Merry Mansion, Frere Road, Karachi
Phone: +92-21-32724541
3. Riaz Motors
Address: 273/1 Korangi Creek, Near CBM Karachi.
Phone: (021) 35122190-3
E-mail: sales@riazmotors.com.pk
4. SNA Motors
Address: Plot No. SB-9, Sector No. 27, Korangi Industrial Area, Karachi.
Phone: (021) 35077161-65, 35067132
E-mail: snamotor@gmail.com

17. 16 | P a g e B u s i n e s s R e s e a r c h R e p o r t
5. Suzuki South
Address: Plot No. 25/1, Sector No. 23, Korangi Industrial Area, Karachi.
Phone: (021) 35077433, 35077436
E-mail: info@suzukisouth.com.pk
Website: www.suzukisouth.com.pk
6. Polad& Co.
Address: Polad Building, M.A. Jinnah Road, Opp. Gul Plaza, Karachi.
Phone: (021) 32720532, 32720574 (021) 111-111-497
E-mail: suzukipolad@yahoo.com
7. Mandviwalla Motors(Pvt) Ltd
Address: Mandviwalla Chambers, Old Queens Road, Off M.T. Khan Road, Karachi.
Phone: (021) 111-111-135
E-mail: info@mandviwalla.com.pk
8. Suzuki Defence Motors
Address: Plot No. 145, Phase-I, Defence Housing Authority, Main Korangi Road, Karachi.
Phone: (021) 35892430-1
E-mail: sdm263@yahoo.com
9. Suzuki Macca Motors
Address: FL, 08-09, Main Rashid Minhas Road, Karachi.
Phone: (021) 34588991-5
E-mail: suzukimaccamotor@msn.com
Website: www.maccamotor.com

18. 17 | P a g e B u s i n e s s R e s e a r c h R e p o r t
10. Nadeem International
Address: Plot No. 164, JogiMor Main National Highway Karachi.
Phone: (021) 35001524-31
E-mail: azm@cyber.net.pk
11. Margalla Motors
Address: 166-A, Sir Syed Road Opp. Khalid Bin Waleed Road, Block-III, P.E.C.H.S., Karachi.
Phone: (021) 34531374-5, (021) 111-007-786
E-mail: margallamotors@yahoo.com
12. Danish Motors
Address: 167-F, Block III, Khalid Bin Waleed Road, P.E.C.H.S., Karachi.
Phone: (021) 34557151-2, 34558458-9
E-mail: danishmotors@hotmail.com
13. Naseer Autos
Address: D-55-A/1, Estate Avenue, S.I.T.E, Karachi.
Phone: (021) 32573266-69, 32567160-1
E-mail: naeemrafay@yahoo.com
14. Suzuki Western Motors
Address: F-44, Estate Avenue S.I.T.E, Karachi.
Phone: (021) 32571786, 32582981-82
E-mail: suzukiwestern@yahoo.com

19. 18 | P a g e B u s i n e s s R e s e a r c h R e p o r t
15. Plaza Motors
Address: 331 AM, Preedy Street, Opp. Preedy Police Station, Saddar, Karachi.
Phone: (021) 32722925, 32720771
16. Suzuki Carachi Motors
Address: 1, Banglore Town, Main Shahrah-e-Faisal, Karachi.
Phone: (021) 34547145, 34545376, 34385042
E-mail: sales@carachimotors.com
Website: www.carachimotors.com.pk
17. Suzuki Motorways
Address: Near Cantonment Board Faisal, Main Shahrah-e-Faisal, Karachi.
Phone: (021) 34573361-2, 34576624-5
E-mail: suzukimotorways1@hotmail.com
18. Khalil Motors
Address: D-3, Al-Hilal Co-Operative H.S. Opp. Askari Park, Main University Road, Karachi.
Phone: (021) 34923526, 34944113-4
E-mail: khalil.motors@yahoo.com

20. 19 | P a g e B u s i n e s s R e s e a r c h R e p o r t
Honda Atlas:
1. Honda Shahrah-e-Faisal
Address: 13-Banglore Town, Main Shahrah-e-Faisal
Phone: (021) 4527070, 4527373, 4547113-6
Fax: (021) 4526758
2. Honda S.I.T.E.
Address: C-I, S.I.T.E, Main Manghopir Road
Phone: (021) 2577411-2, 2569381, 2570301
Fax: (021)2577412
3. Honda South
Address: I-B/I, Sector-23, Korangi Industrial Area
Phone: (021) 5050251-4
Fax: (021) 2577412
4. Honda Drive-In
Address: 118-C, Main Rashid Minhas Road
Phone: (021) 4992832-36
Fax: (021) 4992823
5. Honda Defence
Address: 67/1, Korangi Road, Near HINO Circle
Phone: (021) 5805291-94
Fax: (021) 5805293

21. 20 | P a g e B u s i n e s s R e s e a r c h R e p o r t
6. Honda Quaideen
Address: 233-A-2, PECHS
Phone: (021) 4556071-73
Fax: (021) 4554644
Toyota:
1. Toyota Central Motors
Address: 3, Kathiawar Housing Society Main Sharah-e-Faisal Karachi
Phone: (92-21): 4532246, 4536246-49
Fax: (92-21): 4546047
E-mail: toyota@cyber.net.pk
2. Toyota Eastern Motors
Address: 118. Rashid Minhas Road Karachi
Phone: (92-21): 4614077, 4614177
Fax: (92-21): 4610177
E-mail: toyotaeastern@yahoo.com
3. Toyota Southern Motors
Address: Plot 13, Sector 23, Korangi Industrial Area, Karachi
Phone: (92-21): 5053181-86, 5061551-53
Fax: (92-21): 5053187
E-mail: tsmkhi@hotmail.com

22. 21 | P a g e B u s i n e s s R e s e a r c h R e p o r t
4. Toyota Defence Motors
Address: 118, Defence Housing Authority Main Korangi Road, Karachi
Phone: (92-21): 5386022-7, 5888826, 5888849, 5888862
Fax: (92-21): 5887085
E-mail: toyotadefence@hotmail.com
5. Toyota Western Motors
Address: C-38, Estate Avenue, S.I.T.E. Karachi.
Phone: (92-21): 2564531-35
Fax: (92-21): 2564536
E-mail: toyowest@cubexs.net.pk
6. Toyota Society Motors
Address: 150-F, BLOCK 2, P.E.C.H.S. Khalid Bin Waleed Road, Karachi.
Phone: (92-21): 4383213-14, 4383217, 4523289-90
Fax: (92-21): 4523289
E-mail: toyota@cyber.net.pk
7. Toyota University Motors
Address: 7 - 9, ChandniChowk, Main University Road, Karachi.
Phone: (92-21): 4940417, 4941747, 4943145, 4947130
Fax: (92-21): 4949202
E-mail: toyota_university@hotmail.com

23. 22 | P a g e B u s i n e s s R e s e a r c h R e p o r t
Dealers Of Imported Cars (Karachi)
Undefined - Not registered / A list is not available.
Customers Of Local Cars (Karachi)
Undefined - Not registered / A list is not available.
Customers Of Imported Cars (Karachi)
Undefined - Not registered / A list is not available.
Pakistan Association of Automotive Parts and
Accessories Manufacturers - PAAPAM (Karachi)
South Office (Karachi)
Address: 204, 2nd Floor, Suleman Center, SC-5, ST-17, Sector 15, Korangi
Industrial Area, Karachi.
Phone: +92-21-35113841, +92-21-35412514
Fax: +92-21-35113842
Cell: +92-300-8230095
E-mail: chairman@paapam.com, paapam@gmail.com
Karachi Office: karachioffice@paapam.com

24. 23 | P a g e B u s i n e s s R e s e a r c h R e p o r t
QUESTIONNAIRE
Q.1 Do imported cars make an impact on the local automobile industry?
A. There is a significant impact of imported cars on local automobile industry in Pakistan.
Q.2 Are imported used cars effecting the local employment?
A. The CBU imports are affecting the employment of workers in auto industry besides that it is
also inflicting damage to foreign reserves and national economy.
Q.3 In what ways do local cars provide better customer satisfaction as compared to imported
used cars?
A. Local automobile industry has an edge due to its wide 3s (sales, services and spare)
dealership network.
Q.4 What is your opinion about the role of government in this situation?
A. Government is supporting the import because it is generating profits for the local
government and destroying local auto mobile industry by imposing additional per unit tax.
Q.5 What are your comments with respect to the increment in the demand of imported cars is due
to the lack of technological advancement in the local sector?
A. Imported cars are more technologically advance and provide features such as air bags ,
power windows , better mileage , sound system , automatic transmission , suspension and AC
performance by comparing two same priced cars.
Q.6 What will be the effect of increase in price on local automobile industry?
A. The ever increasing price of local cars is driving the customers towards imported cars.
Q.7 In your opinion is the heavy burden of tax and inflation factor decreasing the demand of
local manufactured cars?
A. Yes, continuous increment in government taxes towards local automobile industry is
damaging the sales as well as demand is also going downwards.
Q.8 What is your opinion about the relationship between currency exchange rate and local
automobile industry?
A. The continuous devaluation of local currency is leading the automobile industry on the verge
of shutting down.
Q.9 State your opinion regarding the competition between local and imported cars?
A. Local automobile industry is facing tough competition for imported cars in lower segment
specially whose prices are below 10 lacs.

25. 24 | P a g e B u s i n e s s R e s e a r c h R e p o r t
Q.10 What is the impact of imported used cars on the market share of local manufacturers?
A. Imported cars have successfully captured the local market and now standing at 26% beating
atlas Honda who is standing at 14% market share.

26. 25 | P a g e B u s i n e s s R e s e a r c h R e p o r t
Questionnaire About Imported Used Cars
1. Your preference while buying a new car:
Local Cars Imported Used/Reconditioned Cars
2. In what ways do local cars provide better customer satisfaction as compared to imported cars?
Better Resale Value Cheap Maintenance
Cost
Wide Dealership
Network
Availability of
Spare Parts
3. Increment in demand of imported cars is due to the lack of technological advancement in local
sector.
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
4. Current prices of local cars are satisfactory.
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
5. The import of used cars is increasing the competition in local sector.
Highly Agree
Agree
Neutral
Disagree
Highly Disagree

27. 26 | P a g e B u s i n e s s R e s e a r c h R e p o r t
6. Our local sector is losing the market due to imported used cars.
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
7. The comfort level of low priced imported cars is high as compared to same priced local cars.
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
8. Vast variety of reconditioned cars is driving the customers towards them.
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
9. Buyers prefer imported cars due to their looks.
Highly Agree
Agree
Neutral
Disagree
Highly Disagree

28. 27 | P a g e B u s i n e s s R e s e a r c h R e p o r t
10. Our market has become saturated due to vast import of used cars.
Highly Agree
Agree
Neutral
Disagree
Highly Disagree

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SUMMARY
Research issue:
Losses to local manufacturers due to imported cars.
Main area:
Automobile industry
The importance of the auto industry for a country cannot be understated. In Pakistan especially,
the automobile sector has contributed handsomely to the GDP and is always a popular
destination for Foreign Direct Investment. Foreign automobile companies have invested Rs. 10
billion in recent years in the local industry.
Research objective:
The objective of the research is to reduce the problem of imported cars which is affecting our
local automobile industry.
Hypothesis:
To examine the effects of imported cars on local automobile industry.
Literature reviewed:
Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) and
3000 automobile parts manufacturers are on the verge of closure as a result of import of
54,000 used cars in 2011-12. (PAAPAM)
The leniency granted for the import of used cars due to lack of tariff barriers has flooded
the market with cars that are much below standard. These cars are neither beneficial to
the economy nor do they provide the customer with any advantages as they cost far more
than their actual worth and end up being a liability due to their ever rising maintenance
costs. (Protecting Local Auto Industry, Dawn News, 16th
July 2002)
Industry has already been facing the menace of smuggling, under invoicing and mis-
declaration and new proposal will also only result in junk being dumped into the country
and not the technology and Pakistan will follow into the footsteps of New Zealand, where
the local auto manufacturing industry has been vanished completely.
(http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online /business/10-
May-2012/no-consensus-on-auto-policy-draft-yet/)
For any county, one of the most important economic factors is protectionism but
somehow our govt. fails to see this aspect. Instead of providing local industries with the
capital, tax benefits and govt. support, it ends up sabotaging a perfectly well-functioning

30. 29 | P a g e B u s i n e s s R e s e a r c h R e p o r t
sector. The biggest example of poor decision making is the permission to import used
cars. Importing used cars is a controversial decision and affects Pakistan’s local auto
sector immensely. The progress of auto industry seems dim at this point if the govt. does
not provide enough support.
(http://www.dailytimes.com.pk/default.asp?page=20120624story_24-6-2012_pg5_13)
Methodology:
 Population:
Local Authorized Dealers (Karachi)
o Pak Suzuki Motor Company
o Indus Motor Company
o Honda Atlas Cars
Dealers of Imported Cars (Karachi)
o Undefined
Customers Of Local Cars (Karachi)
o Undefined
Customers Of Imported Cars (Karachi)
o Undefined
Pakistan Association of Automotive Parts and Accessories Manufacturers -
PAAPAM (Karachi)
o Karachi Office

31. 30 | P a g e B u s i n e s s R e s e a r c h R e p o r t
 Sampling:
Local Authorized Dealers (Karachi) - Stratified Random Sampling
o Pak Suzuki Motor Company - 18 Dealers (15%) = 2.7 Sample Size
o Indus Motor Company – 7 Dealers (15%) = 1.05 Sample Size
o Honda Atlas Cars (6%) – 6 Dealers (15%) = 0.9 Sample Size
Dealers Of Imported Cars (Karachi) - Convenient Sampling
Customers Of Local Cars (Karachi) - Judgment Sampling
Customers Of Imported Cars (Karachi) - Judgment Sampling
Pakistan Association of Automotive Parts and Accessories Manufacturers -
PAAPAM (Karachi) - No sampling technique required
 Primary data collection tool:
o Interview questionnaire
Presentation of data:
As our data is qualitative (open ended interview questions), quantitative techniques could not be
used here.
Research findings:
There is a significant impact of imported cars on local automobile industry in Pakistan
The CBU imports are affecting the employment of workers in auto industry besides that it is
also inflicting damage to foreign reserves and national economy.
Local auto mobile industry has an edge due to its wide 3s (sales, services and spare)
dealership network.
Government is supporting the import because it is generating profits for the local government
and destroying local auto mobile industry by imposing additional per unit tax.
Imported cars are more technologically advance and provide features such as air bags , power
windows , better mileage , sound system , automatic transmission , suspension and ac
performance by comparing two same price cars.

32. 31 | P a g e B u s i n e s s R e s e a r c h R e p o r t
The ever increasing price of local cars is driving the customers towards imported cars.
Yes, continuous increment in government taxes towards local automobile industry is
damaging the sales as well as demand is also going downwards.
The continuous devaluation of local currency is leading the automobile industry on the verge
of shutting down.
Local automobile industry is facing tough competition for imported cars in lower segment
specially whose prices are below 10 lacs.
Imported cars have successfully captured the local market and now standing at 26% beating
atlas Honda who is standing at 14% market share.
Analysis:
As our data is qualitative (open ended interview questions), quantitative techniques could not be
used here.

33. 32 | P a g e B u s i n e s s R e s e a r c h R e p o r t
Conclusion:
For any sector, government support is necessary. Automobile sector is like the backbone of our
economy. Any sensible government always protects this sector as millions of people are directly
or indirectly attached with it. But in our scenario, it is totally a different case as instead of
providing support; we are sabotaging our own assets as we allowed importing of junk/used cars
from abroad. Not only are we creating problems for local auto manufacturers but also damaging
our environment. These used cars are the source of income for already well established people
who are importing it but bring no benefit for the common man. These cars may be a source of
revenue for the government sector but as a whole it is damaging the well structured local sector.
As a nation, it is our responsibility to protect our asset because if we fail to protect it, millions of
people would be unemployed and then the government will be unable to feed its poeple. If we
will continuously ignore it by thinking that all is well then our automobile sector will be on the
verge of closure.