Auto Sector forms one of the largest sections in the planetary trade. It is drives the economic growing and concern activities. Auto Industry puts multiplier impacts on the economic development. Every Global production during economic roar period of 2006 the one-year production for autos and trucks stood at 50.35 million and 20.57 million[ 1 ]that were roll out of the assembly lines universe over. The car industry has come long from doing a low start in 1890s and emerging as a market leader in fabrication activities and one of the major employment suppliers approximately supplying occupations to one in seven people straight or indirectly[ 2 ]. Component of auto was the dominant major section in the industry. In the technology sector, the car industry is rather justly termed as the female parent of all the industries[ 3 ]. Auto Industry incorporates about every aspect of the technology such as electrical, proficient or mechanical.
Growth of the Auto market has been straight relative to the public presentation of the car industry. Changing theoretical accounts, bettering fuel efficiency, cutting costs and heightening user comfort without compromising quality are the most of import challenges of the car industry in a fast globalizing universe. Hence there is a demand for researching the potency of the industry maintaining in position the better quality, favourable costs, fuel efficiency and attractive designs.
The Pakistani car sector has played an of import function in the growing and development of the local economic system in footings of gross coevals, foreign exchange, human resource development and engineering transportation. Harmonizing to the statistics of 2006- 07[ 4 ]there were 82 vehicle assembly programs in the industry bring forthing rider autos, light commercial vehicles, trucks, coachs, tractors and 2/3 Wheelers. Besides these there were over 600 participants in the seller industry. The Auto Sector supply employment to over 192,000, attracted foreign investing of US $ 1.5 billion million and paid Rs. 63 billion in revenue enhancements[ 5 ]. The car industry has played a important function in the big scale fabrication industry as it contributed $ 3.6 billion entire economic system besides import permutation ensuing in one-year foreign exchange nest eggs of over $ 1 billion[ 6 ].
Car Industry in Pakistan is an emerging market for cars and automotive parts and offers huge concern and investing chances. The entire part of Auto industry to GDP in 2007 was 2.8 % while Engineering Development board is actively implementing Auto Industry Development Program ( AIDP ) with the purpose to increase the GDP portion up to 5.6 % and achieve car exports mark of US $ 650 million[ 7 ]. The Car industry has been an active and turning field in Pakistan for a long clip, nevertheless non as much established to calculate in the outstanding list of the top automotive industries of the universe. Initially to internal political instability and jurisprudence and order state of affairs and of late planetary economic lag has impacted upon the public presentation of Auto Industry. With the exclusion of Tractors where the production has gone up by 12 per centum the cumulative production of all other automotive vehicles in the state such as rider autos, landrovers, coachs, trucks, light commercial vehicles and
two/three Wheelers have encountered monolithic downswing by 30.57 per centum i.e. from 616,964 to 428,335 units, during ( July-March 2008-09 ) as compared with the corresponding period of last twelvemonth[ 8 ].
Statement of the Problem:
Car Industry is the cardinal driver of the economic growing in Pakistan. It has helped in development of industrial foundation, transportation of engineerings, nest eggs in foreign exchange and creative activity of occupations. The industry is playing a polar function in economic development of the state and can justly be termed as female parent of all industries and the engine of growing[ 9 ]. Until 2007, the car industry was executing inordinately but due to some internal and external both political and economic factors it has slowed down and happening it hard to retrieve.
The purpose of the research is to analyze the technological base of the industry, its capacity and capablenesss. Emphasis of the survey shall be on understanding and analysing the challenges and chances for Pakistan. The purpose is to place and analyse the challenges and chances.
Hypothesis:
Car Industry has cross-cutting impact on all the subdivisions of the industry. It development would impact upon bettering the gait of economic growing in the state.
Under this research the countries that shall be studied are a ) Impact of pecuniary and financial policies and planetary meltdown B ) Advanced engineering acquisition barrier degree Celsius ) Under developed human capital vitamin D ) Credit handiness vitamin E ) Volume of local content and degree Fahrenheit ) Researching export potency
Mamam
Chapter 2
An overview of Pakistan ‘s Auto Industry:
In the planetary universe trade the Auto Sector is one of the largest sections. It is considered as the “ major driver of economic growing and concern activities. It puts multiplier impacts on the economic system ”[ 10 ]. Every twenty-four hours 1000s of vehicles roll off the assembly lines universe over. Out of which the auto signifier the major constituent.
The roots of the Auto Industry could be traced back to 1949. However, the “ first vehicle that was a Bedford truck produced the National Motors Limited in 1953 at its assembly works at Karachi. Subsequently, buses, light trucks and autos were assembled in the same works ”[ 11 ]. During its early portion of the development phase the industry remained extremely regulated until early 1990 ‘s. However, after deregulating major Nipponese makers, entered the market that brought with it some component of competition in the industry. These developments heralded entry of Nipponese vehicles in Pakistan ‘s Auto Industry, and assembly of HINO Trucks, Suzuki Cars ( 1984 ) , Mazda Trucks, Toyota ( 1994 ) , Honda ( 1994 ) , Daihatsu was started. Korean companies besides ventured into Pakistani industry with the debut of Hyundai autos ( 1999 )[ 12 ]. For the intent of analyses the development of Pakistani Auto Industry in being divided into stages. Under each stage the developments that took topographic point shall be briefly indicated.
Initial Developmental Phase 1949-69: The initial period with year-wise advancement is briefly outlined below[ 13 ]:
1949: Vauxhall Cars introduced by General Motors & A ; Gross saless. Bedford Trucks introduced by General Motors & A ; Gross saless. Ford Trucks introduced by Ali Automobiles.
1953: Exide battery started production.
1956: Contrivance Cars introduced by Haroon Industries.
1958: Ford Angela Cars introduced by Ali Automobiles.
1959: Ford Pickups introduced by Ali Automobiles.
1960: Ford Combi introduced by Ali Automobiles.
1961: Preciseness car parts fabrication started at Allwin Engineering.
1962: Lamberate Scooter introduced by Wazir Ali Engineering. Jeep CJ 5, 6, & A ; 7 introduced by Kandawala Industries. Bedford Truck piecing started at Ghandara Motors.
1963: Macintosh Trucks introduced by Hye Sons. General Tyres & A ; Rubber Company started production in Karachi.
1964: Medium frequency Tractors introduced by Rana Tractors. Vespa Scooter and Rickshaw introduced by Raja Auto Cars. Honda Motor Cycle introduced by Atlas Autos. Ghandara Industries launched Localization Plant for Bedford Trucks.
1965: Specialized Vehicles Production at Jaffer Industries.
1967: Toyota vehicles introduced by Monnoo Motors.
Second Phase 1972- 84: Under this period developments get downing from nationalisation of industries and deregulating took topographic point as detailed below[ 14 ]:
1972: Nationalization, Pakistan Automobile Corporation ( PACO ) was formed. Ali Autos renamed Awami Autos, Wazir Ali Engineering renamed Sindh Engineering, Haroon Industries Renamed Republic Motors, Ghandara Motors renamed National Motors, Kandawala Industries renamed Naya Daur Motors, Hye Sons renamed Mack Trucks, Jaffer Industries renamed Trailer Development Corporation, Rana Tractors renamed Millat Tractors, Tractor Corporation of Pakistan formed.
1974: Yamaha Motor Cycle launched by Dawood Yamaha, Diesel Engines fabrication started at Bela Engineering.
1976: Suzuki Motor Cycle introduced by Sindh Engineering.
1977: Kawasaki Motor Cycle introduced by Saif Nadeem Kawasaki. Suzuki Jeep introduced by Naya Daur Motors.
1978: Plastic parts fabrication at SPEL
1980: Suzuki Pickups introduced by Awami Autos, Mazda Truck introduced by Sindh Engineering, Project approved for production of wheel Rims at Balochistan Wheels under TAA with GKN-Sankey.
1981: Wire Harness production at Ayenbee, Production of Specialized Auto Parts at Agriauto Industries.
1982: Suzuki Cars production started by Pak Suzuki. Bolan Castings started production, Belarus Tractors introduced by Fecto Tractors
1983: Fiat Tractors introduced by Al-Ghazi Tractors, Vendor Development & A ; Technical Cell ( VDTC ) formed.
Third Phase – The Preparatory Phase 1985- 05: During this stage the Auto Industry followed Deletion Programmes that were based on the preparation and execution of mandatory local content conditions. These programmes were both Industry Specific and Product Specific. “ Under these programmes one-year omission marks for each theoretical account of vehicle would be set by giving pick to assembler to take constituents from the basket transporting fixed indices based on their single values. The Engineering Development Board ( EDB ) was required to carry on the proficient audits yearly to find the accomplishment or deficit of omission marks. In instance of deficit, the assembly program would be penalized by bear downing the CBU rate of responsibility on the value of constituents which were non indigenized in that period ”[ 15 ]. During this period following developments of the industry took topographic point[ 16 ].
1986: Hinopak Motors Limited formed as joint venture company between PACO, Al-Futtaim, Hino Motors & A ; TTC.
1987: Production of Nissan Diesel Trucks by Ghandara Nissan.
1988: Pakistan Association of Auto Parts and Accessories Manufacturers ( PAAPAM ) formed.
1989: Second auto works sanctioned by the GoP ( Indus Motor Company ) .
1992: Denationalization of Pak Suzuki Motor Co.
1993: Production of Toyota Corolla by Indus Motor Company Limited First export of Buses and Trailers by Hinopak Motors Limited. 1994: Production of Honda Civic by Honda Atlas Cars Pak Ltd. Import of Vehicles under Yellow Cab Scheme. Pakistan Automotive Manufacturers Association ( PAMA ) formed.
1995: Engineering Development Board ( EDB ) formed First PAP Show in Islamabad.
1996: First Industry Specific Deletion Programme ( ISSDP ) printed for the period up to 2001.
1997: VDTC renamed AT & A ; TC. Second PAP Show held in Lahore. Aircon Systems production starts at San pak Lahore. Production of Sohrab Motorcycle.
1998: Export of Light Commercial Vehicles by Pak Suzuki Motor Company. Saigol Quingqi starts production of bikes with Chinese coaction.
1999: Dewan Farooque Motors starts production of Korean Pickup named Shahzore. Hinopak Motors Ltd. taken over by Hino Motors and TTC of Japan.
2000: 3rd PAP Show in Karachi. Raja Motors starts production of UNO Cars. Production of Daihatsu vehicles by Indus Motor Company Ltd.
2001: Molded Insides fabricating starts at Procon Engineering.
2002: Adam Motors launches Chinese Truck named Zabardast. Revised and updated ISDP for the period up to 2005 finalized.
2003: Sindh Engineering launches scope of Chinese Trucks. Economy of the state is at Take-off phase and so is the Auto Industry. 1st PAMA AutoExpo held in Islamabad ( May 12, 13, 2003 ) .
Fourth Phase – Development Phase 2005 onwards:
5 Writer: Sharfuddin Pirzada, Secretary Fiscal Research and Statistics Wing, CBR.
Industry Profile:
Car Industry in Pakistan5
Introduction
The car piecing industry claims to be playing a critical function in Pakistan ‘s economic system. Undoubtedly, with a long concatenation of backward and forward linkages, it mobilizes and generates diverse activities in the services sector. The upstream economic parts and downstream impacts of the car industry signify its cardinal function in pitching up the economic system of a state. It is frequently contented that no economic system can develop on modern lines without the development of its car industry. Many material-producing industries such as Fe and steel, aluminium, plastic and gum elastic industries etc. rely on automotive industry purchases for a significant portion of their production. Similarly, the services sector relies on the automotive sector as a major subscriber to their growing. The industry is a planetary phenomenon. A little figure of companies with world-wide acknowledgment are the major participants around the universe.
With this background, the intent of present survey is to determine the strength of car industry in Pakistan. The focal point is on its growing within the bing protective barriers, its function in the development of seller industry, its revenue enhancement part, consumer satisfaction, and future chances.
Historical Background
The history of car fabrication in Pakistan Begins from 1950 with the installing of assembly works by international car company General Motors in the private sector.
( 5 Writer: Sharfuddin Pirzada, Secretary Fiscal Research and Statistics Wing, CBR. )
Notwithstanding the important addition in fabrication of assorted merchandises during 1960 ‘s, the auto-manufacturing was severely hurt in 1970 ‘s due to authorities policy of nationalising the industries in Pakistan. For case, despite accomplishing accelerated indigenization of approximately 80 % in the fabrication of Bedford trucks by 1972, the piecing units about ceased its operation during the staying period of decennary. However, from 1980 onward, particularly after the denationalization of car industrial units, a new stage of the industry started with the coaction of local companies and foreign makers in the signifier of joint ventures. Major joint ventures include:
I ) Pak Suzuki Motor Co. with Suzuki, Japan for fabricating Cars, Van, Jeep, Pick-up ;
two ) Indus Motor Co. and Toyota & A ; Daihatsu, Japan to fabricate Corolla & A ; Cuore Cars.
three ) Atlas Honda Ltd with Honda Japan to fabricate Honda Cars/Motorcycle
four ) Gandhara Nissan Ltd with Nissan Japan for the production of Cars & A ; Trucks ; and
V ) Dewan Farooq Motors with Kia and Hundai, Korea for fabrication of Cars and LCVs.
The industry in Pakistan is divided into five major classs that include: Cars/ LCVs ; Tractors ; Buses/ Trucks ; Motorcycles and three Wheelers ; and Vendor industry. Presently the industry consists of 67 industrial units, involved in the assembly and fabrication concern and supplying ample employment chances. During the past few old ages, the industry has registered a brilliant growing runing from 28 % to 58 % . The Car/ LCV fabrication is placed at the centre due to its major part in the overall value add-on by the car sector. There are 15 fabricating units involved in the fabrication of cars/LCVs supplying employment to about
6 Beginning: Engineering Development Board, Islamabad
6000 individuals, with an investing of Rs. 21 billion.6 Six units are engaged in the fabrication of tractors ; two-wheelers and three-wheelers industry consist of 39 units, and for fabrication of Buses and Trucks there are five units. All these units of car sector are working as a hub for seller industry in the state spread over around 1000 units. Although, deficiency of mechanization at different degrees of economic system and full certification restricts the ability to gauge the part of the car sector in footings of value add-on, employment, and foreign exchange nest eggs, notwithstanding the handiness of assorted claims, suffice is to province that the part is significant and rather seeable in the economic system.
Capacity and Production:
The car sector has shown an impressive growing during the past few old ages ( Table 1 ) . The major factors that have contributed in this rush are better public presentation of the economic system, addition in the buying power of the general populace, continued growing in the place remittals, and easy entree to the fiscal aid through attractive auto funding strategies. With increasing of rising prices and escalation in borrowing rates, the fiscal aid for purchase of autos is still available and booming. This phenomenon may be attributed to handiness of extra liquidness in the fiscal Sector. The higher than production demand has resulted in long waiting line of clients waiting for bringing of autos for a period of 4 to 8 months despite doing the full payments at the clip of booking. The auto traders and speculators have invested to a great extent on engagement of assortment of autos theoretical accounts in progress and have developed a concatenation of bringing from the makers. It has farther increased the force per unit area of demand. Thus, a speedy bringing requires payment of ‘premium ‘ , which is fast worsening due to the import of autos under the latest government alteration.
( Beginning: Engineering Development Board, Islamabad )
Table 1: Capacity and Production of Auto-Industry during Last 4 Old ages
Merchandise
Capacity ( Latest )
2001-02
2002-03
2003-04
2004-05
Cars
Production
153,000
40,088
62,073
98,461
126,403
Gross saless
41,838
61,955
97,620
127,309
Trucks
Production
24,550
1,134
1,929
2,022
3,345
Gross saless
1,208
1,883
1,868
3,345
Buss
Production
4,800
1,086
1,296
1,380
1,762
Gross saless
1,065
1,332
1,363
1,605
LCVs
Production
30,000
9,055
12,548
14,896
25,177
Gross saless
9,033
12,383
14,933
25,056
Sport utility
Production
513
820
802
414
Gross saless
503
814
698
425
Tractors
Production
50,000
23,801
26,240
35,770
43,200
Gross saless
24,001
26,832
35,900
43,578
Motorcycle
Production
807,000
120,627
165,105
303,383
416,189
Gross saless
120,113
161,863
301,746
417,066
Beginning: Engineering Development Board and PAMA.
The crisp addition in demand has resulted in higher production of car during the past few old ages. The bing makers have envisaged the ambitious programs for increasing their production capacity. The following Table 2 indicates company-wise future programs of enlargement in their production capacity.
Table 2: Installed Capacity of Major Car Manufacturers
with their Projections for 2012
Unit of measurement
Current Capacity
Projection for 2012
% Growth
Suzuki
80,000
250,000
212.5
Indus Motors
37,000
130,000
251.4
Honda
30,000
60,000
100.0
Dewan
15,000
48,000
220.0
Nissan
6,000
15,000
150.0
Entire
168,000
503,000
199.4
Beginning: Engineering Development Board, Islamabad.
Seller Industry
The seller industry has passed through several phases of development and has achieved a degree where some of the merchandises are being exported. This verifies that attempts to better quality and maintain quality control have started giving dividends and hence happening its strength by recovering its portion from the international unfastened market of the industry. The tabular array bespeaking the major merchandises of the car seller industry is given below.
Table 4: The Merchandises of Vendor Industry in Pakistan
Domestic Use
Domestic Use and Exports
Piston
Wheel Rims & A ; Spokes
Wheels
Timing Gears
Engine Valves
Transmission
Seat Belts
Gear Box Shafts
Gaskets
Silencer and Exhaust Pipes
Bumpers
Piston Cylinder Liners
Surs
Engine Valves
Daze Absorbers
Hand Breaks
Rubber Trims
Radiator Cop Assy
Gears
Saddles
Radiators, Auto Air Conditioners
Seat of Motorcycles
Silencer and Exhaust Pipes
Hub & A ; Fire Wheel
Beginning: Engineering Development Board, Islamabad
The proficient procedures available for the fabrication of car parts include planing, hammering, projecting fiction, plastic & A ; rubber casting, machining, mold & A ; Die fabrication, imperativeness work, electrical and electronic constituent assembly, 3-D optical maser scanner and CAD/ CAM.
It is of import to observe that seller industry is lasting due to its cost effectivity. After the full conformity of TRIM as per WTO agreements, some of the local sellers have developed better
proficient and production efficiencies with the coaction of foreign companies ( see Table 5 below ) that have allowed them to vie within the extremely competitory environment.
Table 5: Technical coaction of Vendor Industry with
Foreign Companies
Components
Collaborating Company
Sellers in Pakistan
Daze absorbers
Showa, Kayaba Japan.
M/S Honda Atlas Ltd
M/S Agri Auto Ind.
Radiators
U.E. Radiators Japan
M/S Alwin Engg.
Toyo Radiators Japan
M/S Loads Pvt.Ltd
Car A/C
Sanden, Denso Japan
M/S Sanpak, M/S Thal Engg
Radio Cassette Player
Panasonic Thailand
M/S Automate Ind.
Lamps
Koito Japan
M/S Techno Pak
Spark Plugs
NGK Japan
M/S Shaigan Electric
Glass
NGS Japan
M/s NGS Pak
Steering Case Set
I.S.Seiseki Japan
M/S Polymer & A ; Preciseness
Brake Drum Assembly
Nissin Kogyo Japan
M/S Alsons Auto Ltd
Beginning: Engineering Development Board, Islamabad.
Omission Policy or Local Content Requirement ( LCR )
With the aim to promote development of a domestic constituent industry and consistent and sustainable proficient substructure for fabrication of car industry, the authorities adopted a omission policy and imposed the status of local content demand. This policy non merely created occupations and reduced the consequence on the balance of payments of imports of vehicle parts, but besides stimulated domestic technological capableness more by and large through spill over consequence. It was further enhanced by joint ventures between local companies of the domestic constituent industry and multinational companies. The periodic degrees of omission for autos, LCVs, bikes, tractors and coachs are fixed on the footing of engineering degrees prevalent in the technology industry
of Pakistan. The industry-wise ISDP marks adopted for the last five old ages are given below.7
Table 3: Industry Specific Deletion Targets ( ISDP ) – Automotive Sector
Merchandises
2001
2002
2003
2004
2005
CARS ( 800 CC to 1200 CC )
50-70
53-70
56-70.25
59-70.5
62-71
Tractor
Between 40 & A ; up to 80 HP ( 2×2 )
82.50
62.5-83
65-83
68-83
69-85
Above 80 HP ( 2×2 ) and ( 4×4 )
0.00
0.00
45-65
47-66
50-67
Motor CYCLES ( 70 CC to 175 CC )
74-83
81-85
82-86.5
83-88
84-90
Commercial VEHICLES
Different Capacities
42.7-63
42.7-65
42.7-67
42.7-67
43.7-68
BUSES ( 30 t0 75 Passengers )
44.7-46.5
45.8-47.5
47-48.5
47-50
48-52
SPORTS UTILITY VEHICLES ( SUV ) 4×4
0.00
40.00
43.00
45.00
48.00
Beginning: Engineering Development Board, Islamabad
The latest place sing local content degree achieved in fabrication of cars include 50-70 % for autos, 43-88 % for tractors, 84-90 % for bikes, 50-55 % for commercial vehicles and 43-52 % for coachs and trucks.
High Protection to Automobile Industry
The fabrication of car industry has been basking high protection for decennaries in Pakistan. The long period protection was provided on the evidences that the industry being at the initial phase required due support to achieve autonomy in fabrication of vehicles. However, this alimentary intervention resulted in inefficiency within the industry every bit good as higher cost to the consumer. The absence of competitory environment provided easy chances for the makers to do net incomes and hence, the growing in the field of R & A ; D left far below than other parts of the universe. A
( Indicative marks maintaining in position that the duty based system to be put in topographic point at an appropriate clip to guarantee publicity of indigenization in line with our international commitments. )
periodical image of imposts duty on the imports of car is given below ( Table 6 ) .
Table 6: Ratess of Customs Duty on Imports of Automobile
Time period
Cars
Buss
Tractors
1981-82
70 – 350
50
20
1991-92
100 – 435
80
10 – 20
2000-01
100 – 250
20
30
2002-03
75 – 200
20
30
2003-04
75 – 150
20
30
2004-05
50 – 100
20
10 – 30
2005-06
50 – 75
20
10 – 30
Beginning: Respective Customss Tariffs, CBR, Islamabad
It is apparent from the above tabular array that the undue protection remained in topographic point in the yesteryear. The duty rate of car sector remains as one of the outliers in the duty construction of Pakistan.
Gross Grosss
The car industry is lending favourably to the treasury in the signifier of revenue enhancements, particularly indirect revenue enhancements. However, the industry, as a whole, has contributed Rs. 3.8 billion in Income Tax aggregation during 2004-05, which was merely approximately 2 % of the entire direct revenue enhancement gross. Given the instead meagre sum of direct revenue enhancements, there is a demand to hold a elaborate and in-depth reappraisal of the automotive sector so that a consistent relationship between production, gross revenues and profitableness could be developed for accurate appraisal of revenue enhancement liabilities. The following Table 7 high spots the income revenue enhancement aggregation from some of the major participants in the car industry.
In footings of indirect revenue enhancements, the car industry has generated important sum of revenue enhancements in the form of gross revenues revenue enhancement and imposts responsibilities. This has been due to significant addition in the imports of
wholly built, wholly knocked down and semi-knocked down ( CBU, CKD, SKD ) Cars and car parts. It is deserving stressing that the aggregations of indirect revenue enhancements from the car sector should non be regarded as the revenue enhancements paid by the industry, as the load of these revenue enhancements is passed on to the consumers – the typical forward shifting of indirect revenue enhancements. However, the significance of the industry as primary generator of economic activity and revenue enhancements can non be denied.
Table 7: Collection of Income Tax from Major Automobile Industries
Rs. in Million
Table 7: Collection of Income Tax from Major Automobile Industries
Rs. in Million
Name of Company
2001-02
2002-03
2003-04
2004-05
Pakistan Suzuki Company Limited
365.4
471.2
1426.9
845.6
VPL Ltd
265.1
526.0
657.3
788.6
Indus Motor Company
219.1
477.7
1058.2
725.2
Atlas Honda Ltd.
160.7
308.1
265.1
207.0
Hinopak Motors Ltd.
47.4
63.2
44.2
126.0
Millat Tractors
249.2
175.4
204.3
170.2
Al-Ghazi Tractors Ltd.
309.8
470.1
306.3
597.9
Sub-Total
1616.7
2491.7
3962.3
3460.5
Share ( % ) in Entire Income Tax of Auto Industry
81.9
86.1
87.6
90.0
Beginning: PRAL, Islamabad
The overall aggregation of revenue enhancements from the car sector during the past four old ages is given below in Table 8.
Table 8: Collection of Federal Taxes from Automobile Industry
( Rs. Million )
Tax Head
2001-02
2002-03
2003-04
2004-05
Gross saless Tax
5,579
8,871
11,432
17,429
Customss Duty
5,528
9,370
12,826
23,585
Withholding Tax
278
564
870
1,515
Income Tax
1,973
2,893
4,521
3,846
Entire
13,658
21,698
29,649
46,375
Notwithstanding the important addition in fabrication of assorted merchandises during 1960 ‘s, the auto-manufacturing was severely hurt in 1970 ‘s due to authorities policy of nationalising the industries in Pakistan. For case, despite accomplishing accelerated indigenization of approximately 80 % in the fabrication of Bedford trucks by 1972, the piecing units about ceased its operation during the staying period of decennary. However, from 1980 onward, particularly after the denationalization of car industrial units, a new stage of the industry started with the coaction of local companies and foreign makers in the signifier of joint ventures. Major joint ventures include:
I ) Pak Suzuki Motor Co. with Suzuki, Japan for fabricating Cars, Van, Jeep, Pick-up ;
two ) Indus Motor Co. and Toyota & A ; Daihatsu, Japan to fabricate Corolla & A ; Cuore Cars.
three ) Atlas Honda Ltd with Honda Japan to fabricate Honda Cars/Motorcycle
four ) Gandhara Nissan Ltd with Nissan Japan for the production of Cars & A ; Trucks ; and
V ) Dewan Farooq Motors with Kia and Hundai, Korea for fabrication of Cars and LCVs.
The industry in Pakistan is divided into five major classs that include: Cars/ LCVs ; Tractors ; Buses/ Trucks ; Motorcycles and three Wheelers ; and Vendor industry. Presently the industry consists of 67 industrial units, involved in the assembly and fabrication concern and supplying ample employment chances. During the past few old ages, the industry has registered a brilliant growing runing from 28 % to 58 % . The Car/ LCV fabrication is placed at the centre due to its major part in the overall value add-on by the car sector. There are 15 fabricating units involved in the fabrication of cars/LCVs supplying employment to about
19
6 Beginning: Engineering Development Board, Islamabad
6000 individuals, with an investing of Rs. 21 billion.6 Six units are engaged in the fabrication of tractors ; two-wheelers and three-wheelers industry consist of 39 units, and for fabrication of Buses and Trucks there are five units. All these units of car sector are working as a hub for seller industry in the state spread over around 1000 units. Although, deficiency of mechanization at different degrees of economic system and full certification restricts the ability to gauge the part of the car sector in footings of value add-on, employment, and foreign exchange nest eggs, notwithstanding the handiness of assorted claims, suffice is to province that the part is significant and rather seeable in the economic system.
Capacity and Production:
The car sector has shown an impressive growing during the past few old ages ( Table 1 ) . The major factors that have contributed in this rush are better public presentation of the economic system, addition in the buying power of the general populace, continued growing in the place remittals, and easy entree to the fiscal aid through attractive auto funding strategies. With increasing of rising prices and escalation in borrowing rates, the fiscal aid for purchase of autos is still available and booming. This phenomenon may be attributed to handiness of extra liquidness in the fiscal Sector. The higher than production demand has resulted in long waiting line of clients waiting for bringing of autos for a period of 4 to 8 months despite doing the full payments at the clip of booking. The auto traders and speculators have invested to a great extent on engagement of assortment of autos theoretical accounts in progress and have developed a concatenation of bringing from the makers. It has farther increased the force per unit area of demand. Thus, a speedy bringing requires payment of ‘premium ‘ , which is fast worsening due to the import of autos under the latest government alteration.
20
Table 1: Capacity and Production of Auto-Industry during Last 4 Old ages
Merchandise
Capacity ( Latest )
2001-02
2002-03
2003-04
2004-05
Cars
Production
153,000
40,088
62,073
98,461
126,403
Gross saless
41,838
61,955
97,620
127,309
Trucks
Production
24,550
1,134
1,929
2,022
3,345
Gross saless
1,208
1,883
1,868
3,345
Buss
Production
4,800
1,086
1,296
1,380
1,762
Gross saless
1,065
1,332
1,363
1,605
LCVs
Production
30,000
9,055
12,548
14,896
25,177
Gross saless
9,033
12,383
14,933
25,056
Sport utility
Production
513
820
802
414
Gross saless
503
814
698
425
Tractors
Production
50,000
23,801
26,240
35,770
43,200
Gross saless
24,001
26,832
35,900
43,578
Motorcycle
Production
807,000
120,627
165,105
303,383
416,189
Gross saless
120,113
161,863
301,746
417,066
Beginning: Engineering Development Board, Islamabad
