June 03, 2008
Mr. Zeeshan Ali
Teacher, Analysis of Pakistani Industry
We herewith present our “Term Report” authorized by you as a requirement for this course. In this report, we have tried to provide updated information and SWOT analysis of Automobile Industry.
We hope we have covered all that was required for the report.
If there be any clarification demanded, we would appreciate a call from you to our group members.
In the name of “Allah”, the most beneficent and merciful who gave us strength and knowledge to complete this report. This report is a part of our course “Analysis of Pakistani Industry”. This has proved to be a great experience. This report is a combine effort of Bilal Razzak, Maaz Khalid and Muhammad Zain.
We would like to express our gratitude to our subject teacher Mr. Zeeshan Ali; who gave us this opportunity to fulfill this report. We would also especially like to thank Mr. Engr. Muhammad Atiq-ur-Rehman Technical Analyst in PAMA and our colleagues who 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.
Auto market is one of the largest segments in world trade. Changing models, improving fuel efficiency, cutting costs and enhancing user comfort without compromising quality are the most important challenges of the auto industry in a fast globalizing world.
The first phase of automotive assembling in Pakistan started in 1950 with Bed Ford truck followed by Ford Prefect, Ford Cortina and Dodge Dart. The indigenized parts in these vehicles did not exceed 20% with only exception of Bed Ford trucks with a deletion level of 80%. By the end of 70s practically all automobile assembling in Pakistan ceased.
The 2nd phase of Automobile assembly started in 1983 with the introduction of FX 800 CC Suzuki Car. In 1989 Pak. Suzuki changed the Model of FX 800 CC with Mehran 800CC. Pak Suzuki thereafter in 1992 introduced Khyber 1000 CC and 1300 CC Margalla but the indigenization levels from 1983 to 1995 were not significant (i.e. Mehran 30%, Khyber 20%, and Margalla, 15%).
In 1993, Indus Motors Company Ltd., Karachi introduced Toyota Corolla. Honda Atlas cars (Pak) Ltd Lahore in 1994 introduced Honda Civic having 1300CC engine capacity. Indus Motors, Dewan Farooq Motors and Pak Suzuki introduced smaller Cars i.e. Cuore, Cultus and Santro of engine capacities 850 cc, 1000 cc respectively in 2000.
This was known as era of competitiveness. Up to 1995, the deletion cell of MOI&P was formulating and monitoring the deletion programs. The industry specific deletion programs were formulated to specify local content requirements for cars, motorcycles, Buses and Trucks Tractors etc.
The deletion policy finalized in 1996 has the following features:
* Industry Specific Deletion program.
* No roll back from achieved Deletion Levels.
* Even handled Tariff Protection at all levels of processing.
The deletion levels were finalized by the sub-committees for cars, LCVs, Motorcycles and tractors etc., constituted by indigenization committee of EDB on the basis of technology levels prevalent in the engineering industry of Pakistan. The Industry specific deletion program (ISDP) books were published and distributed amongst the stakeholders, which resulted in a significant improvement in indigenization.
Major Policies after year 2005:
1. Tariff Based Systems (TBS)
2. Auto Industry Development Program (AIDP).
July 1st 2006, the deletion programs for the Automotive Sector have been replaced by the Tariff Based System (TBS). The deletion programs have gradually been phased out under the WTO regime to become TRIMs compliant. The TBS is the outcome of a long drawn consultative dialogue between all...