Suzuki And Toyota Share Prices Drop As The Big Three Express Disappointment At The New Auto Policy

auto-plantjp_20140212143324309

Pak Suzuki, like the rest of the automakers is not happy with the new auto policy, but Khawaja Asif has made it clear in his statement, “For the last three to four decades, three manufacturers had the monopoly on the market while having established dealerships that always discouraged new entrants. The new policy aims at consumers’ protection and then enabling them (consumers) to dictate the producers.”

The Suzuki spokesman called the new auto policy a disaster and I quote, “The government is requesting auto companies to come and invest in Pakistan, on the other hand, it is not giving equal incentives to the existing players who are ready to invest billions.”

To which FBR replied, “The existing carmakers have been enjoying the protection and incentives for decades,” that says a lot that the government shares the people’s sentiment at the current state of our auto industry.

Perhaps the government read the 7 points that Pakistan’s auto policy must have that we wrote earlier? 

Over the years Pak Suzuki’s share price, sales and profits have all increased but what has not improved is customer satisfaction, choices and quality of vehicles, passenger safety (Suzuki Mehran doesn’t have rear seatbelts), localization (even after assembling the same cars for over two decades) among other things. Lets overview the new auto policy for new entrants for the next five years:

1) One-of duty free import of plant and machinery

2) 100 CBU’s(completely built units) import with 50% current duty after ground breaking by the investor

3) 10% duty on non localized part compared to 32.5% currently

4)25% duty on localized part compared to 50% currently

Hyundai Dewan Farooq Motors plant video, said to be Pakistan’s most advanced plant has been non-operational for a while.

Sick Units/Non-operational units like Hyundai and Kia would have the same benefits for three years not five. So the thought of giving the same benefits to established players that includes Suzuki, Toyota and Honda be fair with the potential investors, regardless of where they orignate from? Because the big three have:

1) Know-how of the system

2) Know-how of the Pakistan auto industry

3) Exclusive spare parts producers

4) Established workforce

5) Established premises

6) Sales network

7) Established system of after sales service.

And yet, despite holding ground for so long in Pakistan, they haven’t been able to introduce technology, safety equipment such as ABS and airbags, and neither have they been able to bring the emissions levels upto global standards. Khawaja Asif said, “The car assemblers have not yet introduced international quality technology, including air bags, environmental friendly engines and ABS brakes”, he further added,”Under this policy, we have targeted to increase cars’ production from the existing 150,000 to 350,000 by the end of this policy in 2021.”

Suzuki-Swift

Suzuki’s reaction to the auto policy comes as a desperate cry. Our sources from within the auto industry told us that Suzuki was working on a new ad for the Suzuki Swift. We dug deeper on whether or not the car that they are planning to promote was the Swift facelift. But alas! It wasn’t, the new ad is for the same Swift we have had since 2010 while the images of next generation Suzuki Swift have already been leaked on the internet. Our sources also updated that Pak Suzuki may have postponed the idea of running the ad altogether after the new auto policy was announced.

In under just a couple of days, the industry is witnessing shifting dynamics as the big three’s monopoly is being broken by the new auto policy however, it will take at least an year or two for any new car company to start producing here. The share prices of Gandhara Nissan, Dewan Motors and Honda Atlas rose in the stock market while Indus Motors whose share price sunk by 0.34% and Pak Suzuki’s share price sunk by 1.94%.

People of Pakistan have already realized the fact that locally assembled cars are below par. It is baffling to see that buyers consider a three years old Japanese used car to be superior than a brand new locally made one.

Perhaps it is time for Pakistan to focus on creating a homegrown brand that has the ability to forecast market trends and consumer demands to reach out to not just Pakistani consumers, but sell to the whole world because the opportunities in the automotive industry will always be there and continue to present themselves, waiting to be converted into cash. Tesla for example, prompted Porsche and other established companies to bring out a rival for their Model S. A new car company prompted decades old car companies towards a new segment.

Written by Danish Jabir, further reporting and editing by Baber K. Khan

  • munib

    People talk about our politicians being “chor”. I say, these 3 companies (suzuki, honda toyota ) are even bigger chorz than politicians.

    For last 40 years they have been looting people and now when Gov has finally done something good for pubilc, they are crying crocodile tears.

    Well done Khawaja Asif !

  • Dr. Aamir Liaquat Hussain

    People say this bcz that’s what media shows us.
    There are thieves everywhere.
    From politicians to beaurocracy and from Army to Judiciary. All are corrupts but we just blame one segment to save others.
    These businesses are one of biggest thieves.

  • 1childDIESeveryMINUTEinPAKISTA

    So what if these three loot customers as we all know they do , majority of the society is corrupt , from serving donkey meat ,to dead animals , poisonous pesticides , corrupt judiciary , corrupt doctors , fake medicines , corrupt police , corrupt businessman, corrupt and murderous politicians , corrupt army generals , why should they be any different

  • munib

    Therefore, logically, these 3 should be allowed to continue looting ?

    Wow . . . amazing logic !

  • munib

    Yes there are thieves everywhere and so, everywhere they all should be exposed , right ?

    Thats what is being done.

  • Kamran Usman

    Pak-Suzuki, Toyota and Honda should take this positively and up their game. Salute to the government for releasing the consumer friendly policy. The big 3 should improve their products and sanitize their prices instead of crying… well done Khwaja Asif and other government machinery including CCP.

  • dedhHushiar

    it is an unfortunate reality of our society , it does not mean that we should allow them to loot , the above comment proves and shows selective outrage of privileged society

  • Shoaib Muhammad

    Suzuki Mehran have seat belts since 2012

  • sajid

    Biggest chor & munafiq Aamir Liaqat , Indian

  • Ahmed

    As if we care, Paksuzuki can pack their bags and go from this country any day, we have enough imported car options under 10 lac, so we don’t care much what they think about this policy. Notice how Toyota and Honda are not crying that much, because they don’t suck that much.

  • Kashif Akbar

    i still believe the new company that comes up first to manufacture and offer a car early will get the benefit of big sales. we are sick of mehran-cultus-wagonr and we are also sick of 7 year old city. a good car packed with quality features we dont care about being cheap. let’s see after the government , how the industry takes up the shape. what ever comes out, but one fact is now evident, even if mehran dont stop production, atleast buyer will stop buying it.

  • Hassaan

    We dont care about cry babiea.they have given nothing except crapy cars and we are forced to buy these

  • Muhammad Rizwan

    Pakistan must establish a national auto industry. just like utility store corporation and Ufone. these automakers can’t do anything with govt. industry. and produce such cars that are cheap, of international standard and exportable, and with options starting from 660cc to 4000cc, small car, sedan, van, suv. this will bring competition and policy will be imposed by competition. Because in Musharraf’s regime SOGO, adam type vehicles were introduced which were cheap but big 3 stolen their parts and as a result those companies stopped production.

  • Muhammad Rizwan

    politicians are industrialists and jageerdars. no one else. every bussiness is controlled by these 20-40 families

  • abrar ahmed

    very good

  • Mandvi

    WE DON’T HAVE THE INFRASTRUCTURE FOR SUCH A DRAMATIC INCREASE NUMBER OF CARS ON OUR ROADS. Especially in Karachi

  • Asif

    he said about rear seat belts.

  • Bil

    Ap jaise log kisi hal mai khush nai. . . .keeray nikalna is your hobby. . . .

  • Junaid Khan

    It’s rubbish new policy for car company to establish their plant with wide discount on duties etc. it’s only for Khawaja Asif to get underhand money from current player for upcoming elections well before two year. I am confident that this is only announcement.

  • White-hawks.com

    Agreed

  • Jayy Khan

    lol

  • RT

    I feel kind of a fresh air after reading this article. Kia and hyundai come back will be enough to start the cracking in the monopoly of 3 F*ks in auto industry.

  • Danial Khan

    I pray for this policy and i wish government approve this policy as soon as possible. And INSHALLAH we see the new brands like Volkswagen,Fiat and Audi. I appreciate Nawaz Sharif’s government.

  • Gulraiz

    f**ck these three bastards that have sucked our blood for last 30 years i would love to see suzuki go out of business finally a good news!!!

  • آدم کا تکبروالا بچہ

    Why so negative and be positive and look on the brighter side.

  • Guest

    It is not really necessary to introduce the new generation Swift. As the shape is really similar, it would not provide any visual variety on the roads.
    However they can upgrade other elements to provide a refresh, such as the better K12 engine, which would enable less tax and better performance. Other improvements can be projector headlamps, another colour for the interior.

    The race towards newer and newer model is a part of planned obsolesence, something Pakistani society is still safe from. The national cost of planned obsolesence would be too big, and needless. We need worthwhile improvements, not superficial improvement like the body change of Corolla in which engines are the same old ones.

  • Guest

    Whatever it is, it has started to bear fruit for Pakistani consumer. Toyota has made ABS as standard, even if you have to pay for it. But before, even if you had the money, you could not get it. This is an example of how healthy competition benefits the society.

  • Guest

    Mandvi is right and realistic. The roads are too congested. Back in the time of Shokat Aziz when car financing became very easy, many people who were not cultured in driving courtesy, got cars and as a result there was havoc on the roads. 8+ hours traffic jams became a common event.

    There is no parking. There are many many problems. However, Mandvi can take another outlook. E.g Karachi is seeing improvement in the form of BRT. More people will use bus to commute and less will use cars. Cars will only be used for leisure trips. In essence, Pakistan can move from automobile freedom of USA style to leisure-only car use like China. You know Chinese consumer buys 2 million (=20 lakh) cars every months. For many popular models, more than 2000 pieces are sold everyday. Yet China is continuously making new cities and new infrastructure for all those cars. They have consumed more cement in 3 years than USA consumed in more than 100 years.

    Pakistan can also become exporter of these cars if the production is of export quality.

  • Guest

    Not at all. Pakistan has limited social security and people will still buy an “investment”. People do care about having a cheap car because it can get snatched anytime and you have to buy a cheaper one, so if it gets snatched you can buy another one. Also, you need to keep enough money with you that if you are shot during the snatching, you can pay for the hospital.

    Newcomers will not be able to market a car cheaper than Mehran. And even if they do, people will still continue to buy Mehran, because Mehran will hold the resale value better, a safety net for the days when your father gets a heart attack God forbid, or your brother has a traffic accident, or your wife or sister has a delivery complication. The only way to stop the production of Mehran is that government regulates some certain safety features, to which Mehran cannot be upgraded. Only then Mehran will go out of production.

    And it will disrupt the market because overall the cars would become more expensive in the new AND used car market (see the situation of Cuore and Alto). But it will still be better for us all.

  • Guest

    You are right. There was this TV program around 2 years ago, in which they said they would expose the low level corruption. Then they showed the corruption of milk-man (doodh wala), butcher (qasai), school teacher, head master, the corruption of news agent, gatekeeper, etc.

    So, corruption is on all levels. The society is at all time low levels of morailty. What else, if some good step has been taken, people belonging to the same mentality are opposing it.

  • Guest

    Last time we knew, that famous person who comes on TV called Aamir Liaquat was a Pakistani citizen, holding Pakistani nationality, Pakistani ID card and Pakistani passport (and maybe a fake degree too, so I’m not saying he is so perfect).

    What do you mean by “Indian”?
    Did you use it as a racial slur?

    Or “Indian” is a word used for you to convey displeasure and hatred?

  • Muhammad Yasir

    ahahah … so true !
    absolutely loathe these kind of people !

  • Muhammad Yasir

    if there are cars CHEAPER than mehran , on offer by the newcomers , PEOPLE WILL BUY IT ON IMPULSE!

    your argument is invalid since people are looking for budget cars for AGES now and even Mehran’s price tag of 7 lacs is A MID RANGE PRICE not kind for many pakistanis !

  • Muhammad Yasir

    Please let there be SUPER CHEAP CARS !

  • Kamran Shahid

    Enjoyed the TEST DRIVE of FAW V2, un believable ……………. yar JF-17 Thunder, Made in China hai…………. FAW V2 china ki wo car hai jo Indian Cars ki quality jesi hai……….. maza a gya yaar….leave OBSOLETE SWIFT………..Leave Wagon Rrickshaw

  • dumb-suzuki

    Just want to sale my cultus and hey suzuki F*** you big time

  • Bring in the Alto K10 Pak Suzuki !!! Remove the shitty Wagon R ! 😛

  • junaid javed

    well said shitty bastards

  • junaid javed

    hahahahah dreams

  • G. Hussain

    New auto policy is big change from momoplist industry to burrs market. As pretesety pakistani consumers are paying very price for inferior quality and bery less saftly as compared to standered safty applicanle in wordwide. I belive new policy will help for pakistani consumers to get better quality and saftty at reasonable price as cirrently Pak-suzuki selling Suzuki Mehran at Rs.693000/- + Rs.25000/- premium for the car even not having boster beak where as in rest of world woth out ABS-brak no one cAn think of making cars. This matter of national safty I suget as nation we must make certain standereds and Auto assenleres must be given target to produce vehicles as per that standerrd. Further more Pal- suzuki made full money monting in Pakisatn and just one example should be enough to understand i.e Suzuki India is selling about 1200000 units per annm and profts are much lower as compared to Pak-suzuki sales which was just less than 100,000/- and quality of products which is not discussable at all.

  • Sajjad

    That’s great. I saw that was coming. Now i am curious to find out which new player set foot in Pakistan. 😀

  • Gulraiz

    you are the man thats benefiting from the monopoly of three scums i guess youre the man on payroll of those suzuki turds…f**ck them bithches

  • Dr. Aamir Liaquat Hussain

    Apke ghar say kia chori kiya ha mene kher say?

  • Guest back again

    You behave like your “ghaib ka ilm غیب کا علم” is impressive. You know everything about who is benefitting from what.
    Unfortunately you are sexually stimulated, and there is no blood going to your brain. If you had blood going to your brain, then you would have read the last last sentence of my post. That there is only one way Mehran goes out of production, and if it happens, it would disrupt the market and make everything expensive, but it “will still be better for all of us”.

    Your desire to copulate with another phylum will only serve to suck your own blood out of you. They are already taking your artificial money, if you start intercourse with them, you will end up giving your “natural mani قدرتی منی” to them also.

  • Guest yet again

    You are getting the market wrong. Car purchases are not impulse.

    It will be impossible for new entrants to beat Mehran, because it is already established. Suzuki has already milked everything out many times over. Newcomers have to set up tool and plant and gain market acceptance. And the licensing cost for a newer model would be higher anyway. If someone manages to sell cheaper than Mehran, the build quality will also be cheaper, which the consumers won’t accept – as you may agree that Mehran’s build quality is already worse.

    Remember Revo? It was cheaper than Mehran. But people paid more for Mehran and still did not buy Revo. Because people who buy Mehran are the people who cannot afford to take a risk. But somebody buying S-class is someone who can. If the S-class does not work out they can still buy a Civic. But people buying Mehran are already on the edge. Maybe people who are buying Mehran as the 4th car of the house may consider the other “cheaper” option. But people whose standard is Mehran would not.

    Additionally, Mehran is easily understood by the mechanics. No matter if the car is cheaper, if it is more complex, or has spare parts availability issues, nobody would buy it. People who buy Mehran buy it exactly because they have no other options to commute. They cannot afford long breakdowns in which they are searching for competent mechanics or relevant spares.

    And just face it: Mehran has resale value. People who do not have lots of capital, buy everything as an investment. Something that can easily be sold when an emergency happens. The new entrants, even if they are cheaper, would not come with a resale value. So people would not buy, unless it is a clone. If you see the example, people bought Chondas because they were a copy of CD-70. Therefore no need to think about mechanics, spares or resale. But other motorbikes, no matter even cheaper than Honda, could not make a place in the market.

    I just hope the government makes a regulation about vehicle safety such as collapsible steering or ABS, and make the Mehran go out of production. But it will happen that all the cars will become expensive. New standards will be set in the auto market.

  • Muhammad Yasir

    if all the cars become expensive … then whats the use 🙁 ?

  • Jaun Raza

    Ganjo ka palto

  • Dr. Aamir Liaquat Hussain

    palto kuttay wese mene imran khan k paas dekhay hain. wo net b use krty hain yeh nhi pta tha.

  • Strong

    First you have to sLIck, only then you can fLIck.

    Strong language won’t take you far in life.

  • Guest another time

    The society will move forward. Cars will initially become expensive, but as the market grows, options will increase, the number of cars available would go up, resale craze would reduce in the long run.

    So in the long run, resale values of cars will go down, and it will become overall cheaper to buy a second hand car, which would cater to the budget section. But it would take a few years to adjust.

    Initial purchase cost is not the lone factor in the world. Ride comfort, safety performance, quality performance, visual and aesthetic appeal of the roads, fuel economy possibilities, etc. will also increase.

  • Ali

    Yar kyu hamari job k peechay paray hu?

  • Shakil Sadiq

    Pay Back Time..
    Indus, Pak Suzuki & Honda Pakistan.. What have you guys done except introduce the concept of,” On Money( or whatever it is called).”
    For a change, the ground realities have finally been acknowledged by GOP; the ground is more even now than ever before. From archieved models to low quality deletion, has been your gift to this Nation, that has suffered, unendingly, because of your monopolistic attitude and your collective mantra to sell RUBBISH to your buyers. Let those Corporate Profits & Sale Enhancements speak out now…..
    Rather than correcting your approach towards your Industry, all we hear from you guys are cries of Foul… well guess what ? Its pay back time.
    Why for the Love of God, can’t you guys see the potentiality of this Market ? and why can’t you guys give value for money? Pak Suzuki, have you ever realized the advantage you’ve had being the First Entrants to this Market? And what have you provided in return? Cars that are moulded plastic, Death Traps.. and we have had enough of your Bu.. Sh.. that Pakistan has a limited market appetite.. look how the Auto Industry next door both in the 2 wheeler as well as the 4 wheeler category has matured. They are global players today, because other than their Corporate Bottom Lines, they invested in R & D, in Quality & listened to the Market.. they didn’t excel in selling junk !!
    And why should our Industry always be held hostage by the Japanese Car Manufacturers ??
    So, wake up guys.. let this Nation also live some share of its dreams to own Quality Manufactured, Comparative to Global pricing cars… And to the German, French & Korean Manufacturers, welcome to a powder keg of potentiality.

  • Abdullah

    I am very happy with the Auto Policy………..however, there should have been a clause that no models older then 5 years like Mehran, Bolan and Honda City can be sold in the market….

  • junaid javed

    hahahha you talking about Karachi the mega city come to peshawar , you go out on bike and you stuck in traffic ,, you go out on bicycle you stuck in traffic on each and every road there are billions of cars already no Parking facilities no nothing 1875 InfraStructure British Empire built that roads n communication streets for their vehicles and “Tangas” for that time with 20% of new roads and modifications here it is boom Traffic Jam

  • junaid javed

    hahahha you talking about Karachi the mega city come to peshawar , you go out on bike and you stuck in traffic ,, you go out on bicycle you stuck in traffic on each and every road there are billions of cars already no Parking facilities no nothing 1875 InfraStructure British Empire built that roads n communication streets for their vehicles and “Tangas” for that time with 20% of new roads and modifications here it is boom Traffic Jam so its reality

  • junaid javed

    you are right bro infrastructure needs to be continuously upgraded for more urbanization and traffic needs and demands for a modern world we are 3rd world country no infrastructure with increasing traffic in this scenario you add cheap and more vehicles what a disaster it would be 😛 since no infrastructure all over pak except islamabad means “pakhootono ko un k name per maro fuck them ANP”” mahajiro ko mahajiro k nam per maro fuck them MQM” punjabio ko punjabii k nam per maro f them PMLn sindio ko sindi hony k nam per maro PPP” qomiat k name per sisyast karo aur apni apni qoom ki maro paisa bano and esh karo

  • junaid javed

    but still they suck GDMs in city civic and grande range cars are much better in every aspect

  • junaid javed

    i m opposing that because we dont have infrastructure to accommodate new flood of cheap cars which is coming come to peshawar a backward city with low urbanization less market low business you out on bike bam stuck in traffic jam 😛 pak is 3rd world country Parking and traffic demand is even big problem for modern developed countries 1st we need infrastructure then cars present infra structure is of 1875 😛 for tangas

  • junaid javed

    dear Aamir bahi why you are so obsessed with media every time you talk about it 😛 you are also a big part of it indeed 😛

  • Jaun Raza

    yeh wala kutta ap ki baji ko bi bohat passend hai raat ko sath na sulai to neend nahe ati :p 😀 bhai himat kerkay apnai orginal naam se ao to maza aye . kutta agher shair ki khaal phen lay wo shair nahe ban jata 😀

  • Muhammad Yasir

    ah … i see.
    much clear and much better now !

  • Hamza

    It’s amazing to see this kind of step being taken by the government. But still there’s no Policy for import of Electric Cars, specially when they are starting to become a little cheap..

  • Imran Akhtar

    and more pollutant cars which already have scandals on emissions tests

  • Zulfiqar Ali Soomro

    So ur saying XLi got abs too? Source of this information?

  • Rizwan

    Amazing news. Suzuki specially deserve this ……….
    Our bad luck that we lost brands like Hyundai and Cheverolet which are givinglatest and superb models in india at cheap prices. Even suzuki there is far advance than Pak Suzuki

  • Guest

    Alto K10 was obsolete. Wagon-R has a big interior, better brakes, the doors open wide, the trunk is big, the side mirrors are good, and it does not bounce around. It is a 1000 times better than Alto chassis.
    Don’t be so shallow. Focus on the character, not the face.

  • I think you bought Wagon R and now justifying it… there’s no justification for a thing which is wrong from the base. It’s unstable, bad-looking, tires look like toys and no class… And character? It’s basically an unstable car at least with the stock tyres it’s dangerous.

  • farok sayer

    In Pakistan you pay withholding tax to the government when u buy a car and pay more when u are a non filer, you pay tax to get your car registered and after you take delivery after 5 months the FBR send you a notice asking you to disclose your source of income and how you financed your purchase.You end by visiting Faridkot house which is a mess becuz of the orange line.Welcome to Pakistan.

  • farok sayer

    Bro , no more time left for Nationalized industries , after steel mill and PIA only freeloaders will be employed by these companies.

  • farok sayer

    hahahahah, strange reasoning

Top