AUTOMOBILE INDUSTRY OF PAKISTAN (INFORMATION PACKAGE)

Transcription

1 AUTOMOBILE INDUSTRY OF PAKISTAN (INFORMATION PACKAGE) 0

2 Segments of Automobile Industry Pakistan Automobile Industry operates in following ranges of products: Cars & Light Commercial Vehicles (LCVs)/Pickups. Two and three wheelers. Tractors. Trucks & Buses. Vendor Industry. 1

3 Overview of Auto Industry The Automobile sector of Pakistan comprises of assembly / manufacturing industries with the following breakdown: PRODUCTS NUMBERS OF UNITS Cars 3 Tractor 8 Truck/Buses 10 LCVs/Pickup/ Van 8 Jeeps 2 Two/Three Wheelers 113 Down Stream Vending Industry comprises of around 2000 part manufacturers, are in organized sector. 2

4 Range of Automobile Products in Pakistan Cars Jeeps LCVs/Pickup/Van Tractors Motorcycles Trucks/Buses Honda Sigma Defender Suzuki Fiat Honda Hino Suzuki Toyota Massey Toyota Hilux Fortuner Ferguson Yamaha Nissan Toyota Master Universal Suzuki Isuzu Karakram(Kalash) Hero Chinese Co s Master Al-Haj FAW Farm-all Tech Afzal P.M Autos Arzoo Daewoo Pak Tayyaba P.M Autos AL-Haj FAW New Allied Orient Tayyaba Fuso Master New Allied 3

5 Market Share % ( ) Market Share % Car Motorcycle Truck Buses Tractors Jeeps LCVs/ Pick Ups Japanese Non Japanese

6 Major Joint Ventures for Automobile COMPANY JOINT VENTURE PRODUCT Indus Motor Co. Toyota & Daihatsu, Japan Corolla & Cuore Cars Atlas Honda Ltd. Honda, Japan Honda Cars/ Motorcycle Pak Suzuki Motor Co. Suzuki, Japan Cars, Van, Jeep, Pickup Suzuki Motorcycle Suzuki, Japan Suzuki Motorcycle Master Motor Corp. Yuejin & Faw, China LCVs, Buses Sind Engineering Ltd. Dong Feng, China LCVs, Bus Tayyaba Motors China Trucks Fuso Master Motors China Truck & Buses Sigma Motors Ltd. Land Rover, UK Jeeps New Allied Motors China Truck / Buses / mini van Al-Hajj Faw Motors China Truck /pickup / X-PV Afzal Motors Daewoo, Korea Buses Karakoram Motors Changan, China LCVs 5

7 Overall Production Performance of Auto Sector (No s) Products Cars Installed capacity , , , , , , ,524 Jeeps 932 1, ,475 1,217 1, ,000 Pick- Up/LCV/ Van 16,324 15,779 19,167 21,033 15,264 18,597 30,154 Total 102, , , , , , ,787 Trucks 3,313 3,779 2,995 2,728 2,284 3,431 4,744 Buses 29, Total 4,020 4,495 3,572 3,421 2,934 4,220 5,677 Tractors 91,000 60,684 72,989 72,261 48,898 51,977 35,253 45,862 Motorcycles 3,888, ,936 1,456,145 1,696,609 1,700,292 1,657,411 1,697,819 1,699,764 Auto Rickshaw 301,500 13,792 31,781 45,211 44,947 35,246 48,712 48,573 Total 1,013,412 1,560,915 1,814,081 1,794,137 1,744,634 1,781,784 1,794,199 Grand Total 4,594,950 1,119,502 1,704,151 1,971,675 1,973,188 1,884,639 1,922,423 1,983,663 Source: PAMA ( & Industries 6

8 Local Content Levels Achieved S.No Automobile Percentage 1 Cars Tractors Motor cycles Commercial vehicles Buses / Trucks

9 Production of Cars/Pick-up/LCV/Mini Van Manufacturers Pak Suzuki Motors Cars (Units: No s) Capacity Status liana 150,000 Disctd Swift Opt 2,578 4,376 7,128 5,945 5,047 3,319 Cultus Opt 12,453 12,414 13,600 12,785 14,467 14,142 Mehran Opt 22,271 25,935 33,839 34,278 28,485 30,381 Alto Disctd 10,665 12,873 15, Wagon-R Opt 0 2,532 5,067 Bolan Opt 10,541 14,359 21,594 13,046 13,991 23,952 Total 59,408 70,571 91,783 66,204 64,666 76,861 Honda Atlas Civic 50,000 Opt 5,648 6,408 5,396 9,608 10,020 8,341 City 7,852 9,294 7,089 11,638 13,585 15,930 Total 13,500 15,702 12,485 21,246 23,605 24,271 Toyota Indus Corolla 75,000 Opt 43,382 41,419 46,352 32,882 28,124 51,392 Dewan Farooq (Hyundai) Cuore Disctd 5,145 6,280 3, Total 48,527 47,699 49,987 32,882 28,124 51,392 Santro Plus 20,000 Non-Opt Nissan Nissan Sunny 6000 Non-Opt Nexus Automotive Chevrolet Joy 3000 Non-Opt Raja Motors Fiat UNO 2000 Non-Opt Total 275, Grand Total 121, , , , , ,524 8

10 Manufacturers Jeeps Capacity Status Sigma Defender Opt Toyota Fortuner Opt Total 1, ,475 1,217 1,109 Manufacturers Pak Suzuki Motors Pick-up /LCV/Van Capacity Status Ravi Opt 12,590 15,860 15,953 10,808 12,300 23,372 Toyota Indus Hilux Opt 2,030 3,060 4,930 3,676 4,468 4,811 Dewan Farooq Shehzore Non-Opt 1, Disctd Dong Feng Pick-up Non-Opt Karakoram Motors Kalash Opt Master Pick-up Opt Tayyaba Motors Mini Van Opt New Al-Hajj FAW Pick-up Opt 0 0 New (X-PV) Opt 0 0 New P.M Autos Pick-up 3000 Opt 0 0 New New Allied Motors Source: PAMA & Industry Mini Van Opt 0 0 New Total 285,000 15,779 19,167 20,929 15,264 18,597 30,154 9

11 Production by CC-Wise CARS (No s) Type of Vehicle cc 17,664 60,360 62,111 66,299 60,223 56,920 78, cc 15,716 23,473 25,287 28,888 12,785 17,209 19, cc 9,299 37,957 46,574 59,068 47,324 42,476 54,333 Total Cars 42, , , , , , ,524 10

12 Trend of Import Duty on CBU New Car up to 800 cc 100% 75% 75% 50% 50% 50% 50% 50% 50% 50% 801 to 1000 cc 100% 75% 75% 50% 50% 55% 55% 55% 55% 55% 1001 ~ 1300 cc 120% 100% 100% 50% 50% 60% 60% 60% 60% 60% 1301 ~ 1500 cc 150% 100% 100% 70% 50% 60% 60% 60% 60% 60% 1501 ~ 1600 cc 150% 125% 100% 70% 65% 75% 75% 75% 75% 75% 1601 ~ 1800 cc 150% 125% 125% 80% 65% 75% 75% 75% 75% 75% Above 1800 cc 250% 200% 150% 100% 75% 90% RD: Regulatory Duty % RD % RD % RD % RD 11

13 CBU rate of Import duty on used and new Cars are as under: Category FIXED* DUTY (in USD) on used cars Custom duty for new cars Sales Tax With Holding Tax Up to 800cc 4,800 50% 17% 5% 800 to 1000 cc % 17% 5% 1001 to 1300cc 12,000 60% 17% 5% 1301 to 1500cc 16,900 60% 17% 5% 1501 to 1600cc 20,500 75% 17% 5% 1601 to 1800cc 25,400 75% 17% 5% 1801 to 3000cc % RD 17% 5% 3001cc&above % RD 17% 5% * Federal Government has made certain changes in its notification No. SRO 577(I)/2005 dated vide SRO562 (I) 2014 dated By virtue of these amendments, fixed amount of duty and taxes on import of cars up to 1800 cc has been increased by about 10%. 12

14 Tariff Structure (Existing) Cars LCVs Motorcycle Bus Rigid/ Truck Prime Mover Trailer Tractor Raw Material Sub Component Component Sub-Assembly CKD- Localized parts CKD- non Localized parts Below 280HP 10% Above 280 HP 0% 5 0 CBU RD Below 280HP 30% Above 280HP 15% *under SRO 567(I) % SKD/CBU duty was imposed on tractors. Normal Tariff 10% duty below 35hp and above 100hp- 15% duty on 35hp to 100hp category. 15 *15/10 (10%-below 35 hp and above 100 hp) 13

15 Imports of Cars & Jeeps Category (CC-WISE) Cars up to ,272 14,108 7,596 3,129 4,565 5,248 24,778 26,537 20,563 16,848 From 1001 to ,131 2,631 1, ,282 8,040 2, From 1301 to ,967 3,801 2, ,488 18,425 12,484 3,532 2,040 From 1601 to ,324 4,590 2,732 3,538 2,523 From 1801 to ,267 2,517 1, Above Jeeps (4x4) 9,251 3,097 2, ,241 1,250 1,479 Total Old 23,483 13,084 4,604 5,641 9,626 56,166 44,820 28,981 22,738 Total Others Grand Total 43,280 26,967 16,121 5,562 6,582 10,761 56,973 45,481 29,036 23,028 Source: FBR 14

16 Trucks Production of Truck & Buses (Units: No s) Manufacturers Capacity Hino 5,950 2,244 2,655 1,700 2,070 1,307 1, ,058 1,476 Ghandhara Nissan 4, Master Motors Ghandhara Industries (Isuzu) Dong Feng Afzal Motors 3, Bibojee Services (Kamaz Prime) Roma Motors Dewan Automotive Engr. Tayyaba Moors Fuso Master Motors New Allied Motors Al-Hajj FAW motors New (Trial) ,000 New New 50 3,000 New Total 28,650 4,637 5,293 3,313 3,779 2,965 2,728 2,284 3,431 4,744 15

17 Buses Manufacturers Hino Ghandhara Nissan Blue line shows non operational units Master Ghandhara Industries (Isuzu) Dong Feng Afzal Motors Fuso Master Motors Daewoo Pak Motors Total 1,073 1,

18 Motorcycle & Rickshaws Capacities and Production Products Installed capacity Honda 750, , , , , , , ,193 Suzuki 60,000 14,592 18,550 20,259 21,389 20,178 24,501 22,105 Chinese 3,078, , ,567 1,105,573 1,090,797 1,000,813 1,033,812 1,024,466 Motorcycles -Total 3,888, ,936 1,456,145 1,696,609 1,700,292 1,657,411 1,697,819 1,699,764 Auto Rickshaw 301,500 13,792 31,781 45,211 44,947 35,246 48,712 48,573 G. Total 4,189, ,728 1,487,926 1,741,820 1,745,239 1,692,657 1,746,531 1,748,337 Source: Industries CC 766,651 1,159,237 1,372,716 1,374,452 1,290,679 1,338,084 1,348, CC 108, , , , , , , CC 62, , , , , , , CC 528 1,038 1,350 2,220 3,987 11,403 18,382 Total 938,936 1,456,145 1,696,609 1,700,292 1,657,411 1,697,819 1,699,764 17

19 Capacities and Status of Tractor Industry 1 Manufacturer Location Capacity Status Origin Product range Millat Tractors Ltd Lahore 40,000 Operational 2 Al-Ghazi Tractors Ltd UK/AGCO (Massey Ferguson) 50, 60,75,85 HP DG Khan 25,000 Operational UAE (Fiat) 55,65,75,85 HP 3 Universal Tractors Karachi 3,000 Operational Romania 53 and 85 HP 4 Hero Motors Hyderabad 3,000 Operational UMG Ukraine 57,62 and 80 HP 5 Farm-all Technology 6 Lahore 3,000 Operational URSUS 50 and 60 HP Arzoo Tractors Lahore 3,000 Operational Rakovica IMR 50 HP 7 PM Auto industries Hyderabad 5,000 Operational HEMA Turkey 50,60 and 80 8 Orient Industries Karachi 9,000 Operational Republic of Serbia 50 and 60 HP Grand Total 91,000 18

20 Tractor Production (No s) Tractors Capacity Millet Tractors (Massey Ferguson) 40,000 40,177 42,188 32,003 32,003 21,600 28,105 Al-Ghazi (Fiat) 25,000 31,430 28,582 16,117 18,856 11,920 16,647 Universal 3, Hero Motors 3, , Farm-All 3, Arzoo Tractors 3, PM Auto Industry 5, Orient Tractor 9, ,001 1,110 Total 91,000 72,989 72,261 48,898 51,977 35,252 45,862 Source: PAMA & Industries 19

21 Indigenous Capabilities Down Stream Vending Industry comprises of around 2000 part manufacturers, 400 are in organized sector. Capable in producing: o Interior trims o Plastic Parts o Forgings o Casting o Machined Parts o Rubber Parts o Electrical parts 20

22 Vendor Industry Technical Collaboration Components Vendors in Pakistan Collaborating Partners Shock absorbers Radiators Car A/C M/s Honda Atlas Ltd M/s Agri Auto Ind M/s Alwin Engg. M/s Loads Pvt. Ltd M/s Sanpak, M/s Thal Engg Showa, Japan, Kayaba U.E. Radiators, Japan Toyo Radiator Japan Sanden, Japan, Denso Radio Cassette Player M/s Automate Ind Panasonic Thailand Lamps M/s Techno Pak Koito, Japan Spark Plugs M/s Shaigan Electric NGK, Japan Glass M/s NGS Pak NGS, Japan Steering Case set M/s Polymer & Precision I.S. Seiseki, Japan Brake Drum Assembly M/s Alsons Auto Ltd Nissin Kogyo, Japan 21

23 Vendor industry Vendor industry has managed to localize a large number of automotive parts, including sheet metal parts, rubber and plastic parts, aluminum parts such as Engine Fuel Systems Cooling Systems Electrical Systems (Alternator, starter motor, battery, battery cable) engine parts Mountings and Brackets Drive Train Clutch, Clutch pressure plate Transmission Shift lever & Parts Transmission Gears Suspension, Steering, Wheel & Tyre Chassis Modules (front, rear,suspension modules) Steering (power), Columns Tie Rods, Tie Rod Ends, knuckles, Pitman Arm. Struts, Arms and Rods Leaf Springs, Cross Members, Shock Absorbers Wheels and Tyres, Ball Joints etc. 22

24 Axle/Brake/Body Control Axle, Shafts, Wheel Hubs, Brake Drum, Discs, Brake Shoe Body & Exterior and Climate Control Interior Body panel, door panel parts, side panel parts, fenders, chassis, frame, mud guard, bumper, AC, ducts Seats, dashboard, panels, switches, door, roof trims, floor trims, mats, carpets etc) Electronics Electric Parts (Wiring harnesses, cables, battery, alternator, motor starter, Audio system General Parts Fasteners, bolts, brackets, clips, clamps, bearing, gears, pipes and hoses, filters, bushes, seals, gasket, plugs 23

25 Auto policies In Pakistan auto sector is regulated through: Tariff Based System (TBS) for Automotive Sector Auto Industry Development Program (AIDP) Tariff Based System (TBS) for Automotive Sector As of July 1st 2006, the deletion programs for the Automotive Sector have been replaced by the Tariff Based System (TBS) through following SRO s o [SRO 656 (I) / 2006 dated June 22, 2006 (For OEMs)] o [SRO 693 (I) / 2006 dated July 1, 2006 (For OEMS)] o [SRO 655(I) / 2006 dated June 22, 2006 (For Vendors)] The basic framework of Tariff Based System is as under: Imports in CKD condition would be allowed only to assemblers having adequate assembly facilities and registered as such by the concerned Federal Government Agency. In Parts/ components indigenized by June 2004 have been placed at higher rate of Customs Duty i.e. 50% for cars Parts not indigenized would be allowed at CKD rate of Custom Duty i.e. 32.5% for cars. 24

26 Auto Industry Development Program (AIDP) Government has approved the long term auto policy (five year tariff plan for Cars/LCVs) on January 2007 while the non-tariff incentive part of the policy comprises of technology acquisition, Human Resource Development, Auto Cluster Development and new entrant policy were approved by Government in November Auto Industry Investment Policy (AIIP) under AIDP Auto Industry Investment Policy (AIIP) Under AIDP facilitate new Entrant which mean a potential assembler / manufacturer of global significance who had no assembly / manufacturing of similar vehicles in Pakistan in the past and intends to assemble / manufacture a vehicle by himself or through an agreement with a Pakistani company. (AIDP is available at Benefits New Entrants will be allowed to import 100% CKD kit, at the leviable customs duty applicable to non localized parts, for a period of three years from the start of assembly/manufacturing. NOTE: Government is going to announce new auto policy soon which is expected to be more open and investor friendly 25

27 New Entrant Policy for Motorcycle Industry with New Technology The minimum investment for any New Entrant with new technology will be US$ 100 million New Technology will be defined by the Engineering Development Board and would be approved by the ECC on the recommendations of the Committee comprising representatives from BOI, Ministry of Commerce and chaired by Secretary Industries. The Committee shall also be empowered to decide on proposals relating to introduction of new technologies by the existing manufacturers as well as the localization plans. The new entrant shall have the incentive of importing localized CKD kit in any form at custom duty leviable on non- localized CKD Kit (10%) in any form for a period of five years subject to localization plan. The additional Custom Duty leviable shall not be charged on sub-components and components imported in any kit form. The Concessions shall be withdrawn on parts localized by the new entrant each year, in accordance to the approved localization plan. At the start of commercial production by new entrants, localization level shall be kept at a minimum of 25%. By the end of five years, localization level shall reach a minimum of 85% at an average rate of at least 15% per annum each for the subsequent four years. 26

28 Investment Opportunities in Auto Sector Small Car Segment As present Pakistan is having extremely low ratio of 16 cars / 1000 persons. Low cars/1000 person ratio offers a huge potential for car sales in Pakistan Government is focusing on bringing new investment in auto sector to increase competition in the local market with the aim to enhance volumes by offering more incentives to new investors under new entrant policy in the draft Automotive Development Policy. The new investor package under new policy is at finalization stage At present, the small cars segment in Pakistan is characterized by no competition (only Pak Suzuki), High prices, and quality issues. As a result there is a huge potential for further investment to cater for existing and future growing demand. Pakistan is producing around 1.7 million motor cycles every year, while total number of motorcycles on road has exceeded 20 million. At least one percent of these motorcycle riders have the ability to graduate from bike to small car every year. This will lead to a potential of additional annual demand of 200,000 units of small cars a year to be filled through new investors. Pakistan offers huge opportunities for investment in small car segment of Pakistan. 27

29 Cars above 1800 CC The Auto industry presently is manufacturing cars up to 1800 CC only The demand for higher capacity cars is being met through imports of new and used cars. New investment in this sector may fill the gap. Tractor industry At present, there are eight manufacturers operating in the sector out of which two players i.e. Al-Ghazi Tractor Ltd and Millat Tractors Ltd are dominating market with the market share of over 96% Still there is a supply demand gap in high horse power segment of more than 85 HP and below 50 HP Motorcycle industry At present around 100 motorcycle manufacturers are operating in the country with an installed capacity of 3.19 million units. Despite having large production capacity of Motorcycle in the country, still motorcycle sector needs to diversify its product range to: o Higher CC segment such as 150 cc and above, o Automatic scooters and o Mopeds in future as well. 28

30 Investment Opportunities in Auto Parts Industry o Around 45% of Auto parts are not made locally. o Car sub-assemblies, assemblies, components are presently being imported. D-8 countries can consider manufacturing of following parts and components for OEMs in Pakistan. o High-tech technology to manufacture certain critical components (engine gearing & transmission parts) in Pakistan for local consumption and to supply to regional hubs. o Brake discs and pads o Brake lining o Clutch discs and clutch assemblies/facings o Spark plugs o Halogen lamps o Shock absorbers o Sheet metal and plastic parts etc Market size is sufficient for establishment of units for local manufacturing of aforesaid parts and components i.e. for both OEMs and the aftermarket. 29

31 DISCLAMER This information package aims at enabling the investors to make a preliminary assessment and information contained in this publication is for information purposes only. All the material included in this document is based on data/information gathered from various sources. Although, due care and diligence has been taken to compile this document, however, the contained information may vary and it should not be relied upon as such. Investors are expected to make their own investment decisions 30

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