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Automobile Sector

- - - - - Auto Automobile Automobile Sector

627 replies to this topic

#1
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    Indus Motor raises car prices by Rs 54,000-80,000

    By Arshad Hussain

    KARACHI: The Indus Motor Company Limited has raised prices of all its brands of cars by Rs 54,000 to Rs 80,000 throughout the country from Thursday (today) following the decision of the federal government to levy five percent withholding tax on locally manufactured vehicles.

    The federal government, through the Finance Bill 2007, imposed a five percent withholding tax and one percent surcharge duty on all local car manufacturers.

    An industry source said, “Pak Suzuki, Honda Atlas, and Dewan Farooq group are also considering to raise prices of their vehicles from six percent to l2 percent after the budget speech.”

    Most of the authorised dealers said that they have closed bookings of the vehicles, as the companies are not ready to pay the withholding tax and surcharge from their own pockets.

    Indus Motor increased the price of Toyota Corrolla XLi by Rs 54,000 to reach Rs 939,000, Corrolla GLi by Rs 69,000 to make it Rs 1.38 million, Corrolla 2.0D by Rs 63,000 to equate Rs 1.102 million, Corrolla 2.0D SE by Rs 68,000 to make it Rs 1.187 million, Corrolla 2.0D Saloon by Rs 78,000 to Rs 1.357 million, Toyota Altis IM by Rs 75,000 to Rs 1.379 million and Toyota Altis IA (t) by Rs 80,000 to Rs 1.399 million.

    Similarly, the price of Daihatsu Cuore has been raised to Rs 4,61,000 from Rs 434,000 and Cuore AC CNG to Rs 503,000 from Rs 474,000. Cuore Automatic prices have gone to Rs 483,000 from Rs 464,000.

    Industry sources said the own-money of all the makes of Toyota has gone up by Rs 50,000 to Rs 70,000. The own-money on most of the Toyota vehicles was almost zero before the budget announcement, they added.

    H M Shahzad, chairman All Pakistan Motor Dealer Association (APMA) said, “the decision of the federal government to restrict auto dealers to import only three-year old cars has paralysed them to compete in the local market.”

    “The automobile industries will now have a free-hand to raise the prices of cars on their will,” he added.

    He demanded from the government to withdraw its decision of imposing three-year old vehicle condition and allow them to import upto five-year old vehicles.

    “We were expecting the government would accept our demand to allow the import of vehicle without any transfer of residents or luggage and gift scheme, but the government has impost this three-year condition to support this raise in prices,” he said.

    Car sales stood at 146,784 units during the first eleven months of the current fiscal, 4.79 percent above the last year’s sale of 140,071 units.

    Large slides have been witnessed in the sales of Honda City and Honda Civic during the period mentioned. Sales of Honda City have fallen by 31.91 percent to 10,149 units from 14,907 units last year. Civic managed to attract only 5,936 buyers compared to 11,657 during the same period last year.

    However, the sales of Daihatsu Cuore, Hyundai Santro, Toyota Corolla, Suzuki Cultus and Suzuki Alto have been rising.

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    #2
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    'We plan to invest approximately US$ 6 million over next 5 years'

    ZAMIR SHEIKH talks to Zane Dubash, Business Manager Audi Pakistan
    The Pakistani business executive community has always preferred a European car brand.
    There is a large gap in the market for those individuals who have made it in
    terms of career, financial stability, and who appreciate a sporty, progressive and sophisticated brand of vehicle. This is where we feel our main target customer is located.

    We have a very simple investment strategy. Success is underpinned by a progressive and forward-thinking approach to managing and developing the company. We plan to invest approximately 6 million US $ over the next 5 years", said Zane Dubash, Business Manager Audi Pakistan in an interview with Money Plus.

    He said commercial operations for Audi have already started in October 2006 and our after sales facility is situated at a prime location in Karachi. We are planning to open our exclusive showroom at Avari Towers, Karachi by the end of June 2007. Lahore sales and after sales centre are currently under construction and we believe it will be operational by August 2007.
    Giving brief about organisation and its operation in Pakistan, he said the official importer of Audi in Pakistan is Premier System's (Pvt) Ltd, which is an I.T. system integrator. It has several business units. Premier Systems (Pvt) Ltd. is also an associated concern of Bosicor Pakistan Ltd, which is a private oil refinery located on Hub.

    Q: Audi's vision for Pakistan?
    A: As a company we have two-mission statements. In Short term mission to establish the Company and develop it to a profitable operation, providing adequate market coverage, and an excellent level of customer service and technical support. In long-term mission, to be the leading automobile importer in Pakistan as a dealer of Audi as well as its subsidiary companies.

    Q: What potential do you see in the Pakistani market for a brand like Audi?
    A: Audi's success stems from creativity, commitment and enthusiasm. The wishes and emotions of our customers are the guiding principle behind our approach. We strive to lead the way with our innovations, and to set new standards.

    Q: What is your outline of investment?
    A: We have a very simple investment strategy. Success is underpinned by a progressive and forward-thinking approach to managing and developing the company. We plan to invest approximately 6 million US $ over the next 5 years.

    Q: Plan of official launch of Audi in Pakistan?
    A: Commercial operations for Audi have already started in October 2006 and our after sales facility is situated at a prime location in Karachi. We are planning to open our exclusive showroom at Avari Towers, Karachi by the end of June 2007. Lahore sales & after sales centre are currently under construction and we believe it will be operational by August 2007.

    Q: Audi – Models and Price Tags?
    A: In Pakistan, Audi is planning to launch the complete range starting from the smallest model the sporty Audi A4 to the exclusive Audi A8. Audi has entered the SUV market recently and has been a huge success globally. In Pakistan, the Audi Q7 received an overwhelming response. The Prices for the Audi A4 starts from Rs3.6 million, the Audi A6 from Rs5.2 million. The Audi A8 with a 3.2 liter engine at approx Rs8.3 million. The most popular model in Pakistan, which we are selling is the Audi Q7. Its price starts from Rs5.9 million. All vehicles come naturally in a fully loaded configuration, which is part of the standard country setting for Pakistan.

    Q: Auto industry in Pakistan and government policies?
    A: In today's world, the car-person ratio is used as an indicator of the economic prosperity of any nation. One in every 200 person own a car in Pakistan as compared to 40 persons in Asia, 4 persons in Europe and 3 persons in North America. The ratio of those who can afford to buy a new car is much lower— one person in 2,900.
    The demand for imported luxury cars has been growing at a substantial rate. Some factors driving this trend are: reduction in customs duties, especially on 1800cc vehicles, 90% of the demand of imported luxury vehicles is for senior corporate executives and owners of large and medium size enterprises, drastic reduction in car financing rates, competition between leasing companies and banks has brought down the rates from 22% to below 13% for good credit rated companies and creation of officially appointed agents by Automobile manufacturers which has stopped the grey market imports, and has created customer satisfaction as after sales service will be provided.
    The business of luxury cars (imported) is growing rapidly at an average pace of 30% to 40% per annum. This growth had been fuelled by the reduction of customs tariffs by 25% in 2005, and another cut expected for this year.

    Q: Do you think Pakistani consumer is ready to buy an expensive brand like Audi when there are brands like Mercedes Benz, BMW, and Porsche already available and have somewhat established here?
    A: The Pakistani business executive community has always preferred a European car brand. There is a large gap in the market for those individuals which have made it in terms of career, financial stability, and who appreciate a sporty, progressive and sophisticated brand of vehicle. This is where we feel our main target customer is located.

    Q: How do we plan to counter our competitors in Pakistan, and why would a consumer choose an Audi?
    A: Audi defines the style and substance, the power and grace and the heart and soul of one of the world's truly great Marque. It's a benchmark, an emotion, a state of mind – the foundation of our past, the inspiration of our present, the direction of our future – and this is why Audi sets the standard in performance, design and prestige. We believe the success of a company or a brand is its people. When people are working with customers, they are doing more than the company's business. They are building and managing relationships. Everything they do to impact customer relationships impacts on how the company is perceived.
    The success of any brand company or product is due to its customers. I would like to thank the readers on behalf of the automobile world for putting trust in our brand; the continuous growth of the industry is only because of them.

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    #3
    HaseebA

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    in ko bolo assembly shuru karo pakistan main, only then will we pakistani's have some real benefit!

    #4
    AbDuLmAtEeNkHaN

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    #5
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    June 25, 2007

    Hello Friends,

    Auto Sector may have fallout from some negative sentiments.

    It might be a good idea to go for some Profit Taking in Auto Sector.

    PSMC and INDU are good companies and may not have that much impact but some correction is possible.

    HCAR may have some tough time

    Others smaller units most probably face very difficult time.


    There is the question of 3 years condition which has more or less been dropped. This means older cars will be imported.

    A more serious matter is the talk of Withholding Tax on new vehicles...

    If this is levied then it will have negative impact on all Auto manufacturers and assemblers including PSMC and INDU

    Some selling and Profit Taking might be a good idea.

    Do your own Diligence

    ALLAH Kareem

    Taufiq



    #6
    AbDuLmAtEeNkHaN

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    Car import policy puts dealers Rs 12 billion at stake: APMDA
    ZAHEER ABBASI
    ISLAMABAD (July 02 2007): The government decision to import three years old cars, instead of five years old, has not only led to an upsurge in premium of local cars but has also put on stake Rs 12 billion of dealers as between 3000 to 3500 vehicles are stuck up at Japanese ports, said H M Shahzad, Chairman, All Pakistan Motors Dealers Association (APMDA).

    Talking to Business Recorder, he said that contrary to previous years' practice, the government did not consult them before budget and its abrupt policy change has not allowed the local dealers to clear their position.

    These vehicles, he said, are held up at Osaka, Tokyo and Yokohama ports of Japan, whereas two ships had arrived at Karachi ports before June 30, the last date of allowing five years old cars. Previously, he said, the association used to be taken into confidence before taking any budgetary measure, but this year it was completely ignored, and left high and dry.

    It was the government, he said, that had encouraged them for import of used cars two years back, saying that it wanted to break the monopoly of local assemblers selling cars in black marketing.

    "We were not taken into confidence. Thus local importers could not inform their exporters before hand about government decision in Japan, Dubai and London," he said, adding that last year they were informed two month before the budget about reduction in the age limit of used cars to five years and the Association was able to intimate to its suppliers in time.

    "It seems," he said, "that the government decision would head it back to 2004 situation when automobile industry was charging a premium of its own choice and one had to wait for six months to have a car". Giving details, he said that the premium of all cars was increased manifold from the day after the budget. Premium on Corolla XLI GLI was raised to 75,000 on June 11 from Rs 7, 000 on June 8, he added.

    Similarly, he said, the premium of Suzuki Mehran was increased to Rs 30,000, Alto Rs 35,000, Cultus Rs 40,000, Ravi pickup Rs 75,000, Suzuki Bolan Highroof Rs 85,000, Potohar Jeep Rs 1,50,000, and Honda Civic Rs 1,30,000.

    He said that the local car assemblers had increased the premium immediately after the government announced to allow import of three years old cars instead of five years.

    About import of used cars, he said that in 2005-06 as many as 60,000 used cars were imported. In 2006-07, the number of cars were reduced to 26,000; this year it is unlikely to be more than 10,000 because the current situation.

    Shariq Sohail of Rubatech and Pakistan Autoparts Manufacturers Association said that it were the dealers who were charging premium, and not the assemblers. The issue was taken up with the assemblers on numerous occasions, and they were asked to do something about the dealers charging huge premium from customers.

    He blamed government's inconsistent policies being responsible for the present situation, saying that the government, instead of allowing import of used cars, should have given incentive-based production targets to assemblers. If they failed to meet the target aimed at bridging the demand-supply gap, the government should allow import of used cars.

    He, however, did not have specific answer to why the premiums had gone up the very next day of the budget. All he said was that it was the middlemen, dealer, that was making money by charging premium.

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