'Pakistan Automobile Industry Essay\r'

' motorcar market is one of the largest segments in human trade. In a steadfast globalized world, this manufacturing is approach huge ch wholeenges same cutting cost, upgrading models, improving give the sack might and enhancing customers comfort without compromising quality. I categories political machine exertion of Pakistan in different phases. In first phase, automobilemotive assembling of Bedford truck fol miser adapteded by ford perfect, ford Cortina and scheme Dart started in 1950s in Pakistan. By the end on the 1970’s the assembling of vehicles came to a freeze out-of-pocket to the low quality set of topically produce vehicle break down yet continued the assembling of Bed get over trucks.\r\nBy the end of 70s practically all assembling ceased in Pakistan. In 1983, befriend phase of car assembling started with the world of Suzuki FX 800 CC car. And with in six days Pak. Suzuki changed the model of FX 800 CC with Mehran 800 CC. Pak. Suzuki ther e after introduced Khyber potassium CC and Margalla 1 three hundred CC in 1992. But in more than decennium days, take of participation in festering was non signifi similarlyshiet. From 1993, Pak gondola industry moves toward instruction when Indus motors comp whatever Ltd. Karachi introduced Toyota Corolla and Honda atlas cars Ltd. , Lahore introduced Honda Civic having 1300 CC engine capacity.\r\nSmaller cars also introduced by Indus motors, Pak Suzuki and Deewan Farooq motors in 2000. I. e. Cuore 850 CC, Cultus 1000 CC, Santro hundai 1000 CC. Automobile industry in Pakistan laughingstock be broadly divided into future(a) segments: • Cars & Light Commercial Vehicles. • transports and Buses. • Tractors. • vendor Industry. It is the industry which ope pass judgments under franchises and technical cooperation agreements with Japanese, European and Korean manufacturers. • Two and Three Wheelers ordinary companies that argon traded on Pak istani bourgeon exchanges. Automobile assembler • Ghandhara Industries • Ghandhara Nissan • Hinopak Motors • Hyundai Motors.\r\n• Indus Motors Comp any • prevail Motors • Millat Tractors • Pak Suzuki • Sigma Motors • Volvo Pakistan Limited • Al-Ghazi Tractors • Atlas Honda • Dewan Farooque Motors (BMW Pakistan) • Ghani Automobile Industries Pakistan Automobile industry at Present: The automobile industry has been strugglers ever since its creation. Although long clipping has past since its establishment, it has not been competent to cook a mark among the very stars of the automotive world. Although it has tried and made significant emanation towards the deed of topical anesthetic anaesthetic anestheticly produced vehicles transfer of raw(a) engineering has become a resume weakness of the industry.\r\nAn opposite reason for the low progress of the industry is due to the elevated cost of give the axe in Pakistan. stack train made ad honestments to their vehicle by ever-changing their fuel preferences from petrol to CNG, just to get by in their lives. The Pakistani industry has so far creation unable to adopt the GLOBALLY gullible notion and safety standards. Most cars in the country rely on double fuel systems. Moreover Pakistani industry is s gutter relying on car models which have long been stopped producing in other super power countries. Pak Suzuki has gained to the advancedest degree k directly monopoly in the segment of producing small cars and faces almost no competition at all.\r\nThe politics policies and regulation of the state bank of Pakistan too contribute a great band of being a wall surrounded by the Pakistani automobile industry and its success. By increasing the interest rate on car financing the industry has suffered a huge shift towards downfall. SWOT depth psychology Strengths: Increasing Demand for Cars: In Pakistan linguistic contex t there are 9 cars in 1,000 persons which is one of the lowest in the emerge economies which itself speaks of high potential of growth in the auto sector and more so in the car production.\r\nRising per capita income with changing demographic distribution and an anticipated influx of 30 to 40 million tender people in the economically progressive workforce in the attached fewer classs provides a stimulus to the industry to expand and grow. Resale of Local Assembled Cars: Resale of locally assembled cars is recrudesce due to availability of spare separate and after sales services and indorsement Used merchandise cars have been sell below their cost at the showrooms for the break six months but consumers are not inclined to buy because of their low re-sale value and problems in separate availability.\r\nQuality of local cars Initially when the import of cars was liberalized the quality of local assembled cars was unsatisfactory so the people of high income direct group sta rted purchase imported cars and the sales of the local assembled cars started decreasing so the local assemblers started enhancing the quality of their vehicles so we can say that the quality of local cars is neat the strength of the auto industry. OEM: The local OEM of Pakistan is soundly equipped with enough advance technology and skilled repulse to produce split according to the desired quality of any foreign company.\r\nCNG kit The advantage of buying local assembled cars is that they comes with factory fitted CNG kits at the clock when the prices of fuel rising at high pace internationally. Mechanics: For local assembled cars chemical mechanism are readily available in market and much cheaper so the purchaser has not to worry about any problem that can occur in the car in long bourne whereas the availability for imported cars is a bigger issue for the owners and if somehow they are able to find one then the mechanics charges much higher than actually it should be ch arged. Weakness:\r\nWTOâ€Deletion programme: THE beingness switch over Organization (WTO) has rejected Pakistan’s request for the extension of the deletion program which enabled it to lay down the consideration of the local content requirement (LCR). Under LCR, the automobile and other engineering industry was call for to use locally manufactured split and accessories in terms of government’s deletion policy. The condition of the LCR was an aberration to the article 5. 2 of the WTO Agreement on Trade Related Investment Measures (TRIMs), Article troikaâ€-National Treatment under the GATT, 1994.\r\nWTO’s closing for not extending its deletion program / LCR condition has varied impact on Pakistan’s vendor industry, automobile assemblers, car users and the government. gossip Cost In Pakistan as the inflation is increasing so as the stimulation costs and for manufacturers it is becoming harder to produce at lower cost. Increasing cost of effic iency and its unreliable and inconsistent supply adds up the cost of manufacturing and wastage of resources. It is estimated that by the year 2012, auto industry consumption of electricity allow for cross 500 †600 MW from around 250 †300 MW, as of now.\r\nProtection level: in front the TBS was introduced the auto industry was hale protected by the government but now as the import of CKD and CBU is liberalized the protection level to industry by government is decreased. omit of skilled manpower for modern machinery In Pakistan conventional machines are not able to meet the precision manufacturing and the available labor is not familiar with modern technology it caused by lack of coordination and linkages with Government/ cheat Government Supporting Bodies and Technical teaching Institutes.\r\nScarcity of raw material peculiarly steel Through previous years the world prices are rising and make costly inputs and Pakistan has left with scarce blade and Iron left, so ma nufacturers are cladding difficulties in producing cars with low prices. Opportunities: Import German technology and skills EDB wanted to build a Pakistan-German automotive supply network, providing opportunities to Pakistani automotive vendor enterprises to benefit from the German know-how and technology to improve quality, productivity, developing and marketing of value-added products.\r\n contradictory Investment and setup production facilities china National Heavy Duty Truck Corporation (CNHDTC), one of the largest heavy occupation truck manufacturers in China, has shown interest for investing in the automobile sector of Pakistan. The study is required to attract players from Germany as well as from other countries to develop business sector with the Pakistani counter split. Baggase Fuel As the fuel prices are rising in world Pakistan should switch to Ethanol Fuel as Brazil is using. Ethanol Fuel is produced by Molasses.\r\nPakistan is one of the country which produces good sum of money of molasses but the engines of the local cars do not support ethanol so Pakistan should lease the Technology to produce ethanol congenial cars. In Brazil they use 90% Ethanol and 10% petroleum whereas Pakistani cars with default engines can afford still 3% Ethanol. Global spare part market The annual gross sales turnover of the auto industry, at present, stands at Rs210 billion while export of auto separate are estimated at $35 million.\r\nAs such, the maturation in production turnover is projected to increase by 185 per pennyimeimeimeime while the exports of auto parts would make quantum jump. Threats: WTOâ€Parts indigenization Smuggling of auto parts The auto industry is broadly speaking faced by multiplicity of taxes; the probable tax regime has led to increase in prices of imported inputs and the finished goods. office manufacturers are struggling to compete with under-invoicing, throw declaration and smuggling. Import of used parts is still conti nuing at a large scale. Smuggling, under-invoicing and dumping of auto parts.\r\n tilt from import cars Auto industry is facing a threat from the import of cars which is already liberalized further it is said that government volition cut about 15% of duties till 2011 Fuel prices According to the authorities the fuel prices which currently are Rs 68. 8 and are going to increase by more Rs. 6 by the end of 3-Jun-08. diminish responsibility structure: For localized parts of CKD cars, the tariff would flash back from 50 per centime to 45 per cent in 2008-09 and further to 35 per cent in the beside two years. The tariff for CKD non-localized parts would be trim back from 35 per cent to 32.\r\n5 per cent in 2007-08 and would keep on decline by 2. 5 per cent every year to 25 per cent in 2010-11. The rate for CBU cars up to 1500cc, the tariff would be reduce from 50 per cent to zero next year (2007-08) and to be kept at that level thereafter. For CBU cars among 1500-1800cc, the cu rrent rate of 65 per cent would be rock-bottom at the rate of fin per cent annually to 50 per cent by 2010-11. For CBU cars exceeding 1800cc, the relevant rate of 75 per cent would be cut back at the rate of five per cent per annum to 50 per cent in 2010-11.\r\nFor LCVs, the tariff on CKD kits would be reduced from 20 per cent to 15 per cent at the rate of one per cent every year. However, the tariff for CBU LCVs, the rate would be reduced from 60 per cent to 50 per cent in a phased personal means by 2010-11. For two-wheelers, the tariff on CKD kits would be reduced from subsisting 30 per cent to 20 per cent in phased manner to 2010-1. Similarly, the tariff on CBU two wheelers would reduce to 60 per cent by 2010-11 from existing rate of 90 per cent.\r\nFor localised CKD parts of tractors and heavy commercial vehicles, the existing tariff of 35 per cent has been proposed to be reduced to 25 per cent in 2010-11. For hot flash movers (up to 280 HP) the tariff for CKD would be r educed from 10 per cent to five per cent next year and then kept at that level onwards. Similarly, the tariff for CBUs would be reduced to 25 per cent next year and then kept at that level for the next five years. The tariff for hot flash movers (above 280HP) and would remain unchanged, while it would be reduced for trucks from 10 to five per cent and from 30 to 25 per cent next year.\r\n'