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Thread: Why don't Honda/Toyota present an average priced car in Pakistan?

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    Default Why don't Honda/Toyota present an average priced car in Pakistan?

    I have failed to understand why these 2 car manufacturers dont present a car for middle class segment in Pakistan.
    So many local options available in India, but here...........
    Any answers from our fellow pakwheelers........?

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    its a large scale game,

    IMC is making toyota vehicles, 60% parts are imported (again toyota gets daalur), 40% sundry are locally made.

    a car sells, the amounts are divided again to feed the source and then the locals.

    Infact IMC, PS, AHL etc should be forced to produce enough vehicles that they can export them to the extent of completely offsetting the import bill of their parts. Only after then should they be allowed to operate a sales unit in the country.

    This sort of decision is done on national interest level, which in Pakistan means nothing. There is no "National interest" all that matters is "ones own money" to loot and leave.

    Wishful thinking of big giants coming in to invest in tooling and lines to make a mere 10,000 cheesy econoboxes does not work. Big money requires big decisions. Most of the big wigs will try to take the situation hostage in their favour - but there are many examples of countries doing it the right way and benefitting - (e.g. how many "made in Thailand" parts are seen as OE toyota parts around the world - compare that to any Toyota part globally that is made in Pakistan)
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    Quote Originally Posted by zamza View Post
    @majedkhan sir

    yeh to gayab ho jayein gy per new investors asmaan sy nahi giray gy unko lana parta hai with friendly policies and insurance of safe business ab yeh unko kon provide karay ga? mulla umar?

    aur boycott har chheez ka haal nahi hota

    tree ko uper sy jitna marzi kato wo nahi hatam hoga jab tak usko roots sy nahi kato gy

    I think the above highlighted is taught in ITB in every school in Pakistan.

    Realisitically Im thinking this is how generic business works in Pakistan.

    first - dhanda rakho
    second - 4$$ ociation banao (where you only talk about jack and pool money for bribes)
    third - Think of how to not disclose books for taxation
    fourth - dance.
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    @zamza : bro our cartels hav capacity 2 bribe mullah umar 2.
    Arent we sold a 20 year old cultus model for 1 million rs ? Is it worth it.....
    PS started with promise that gradually thy wl start local production. R thy doing that ?
    Be honest friends how much do u think is cultus or mehran costing PS ? Its an obsolete model......

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    @xulfikar : totally agreed. Can any1 inform the forum how much profit these cartels making.....?
    Im sure its more than 500% on a single piece they selling us.

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    Quote Originally Posted by majedkhan View Post
    @xulfikar : totally agreed. Can any1 inform the forum how much profit these cartels making.....?
    Im sure its more than 500% on a single piece they selling us.

    Sent from my GT-I9500 using PW Forums mobile app
    From my understanding, its not a whole lot.

    Try comparing the prices of similar sized cars in other countries. One car argue that similar cars in the west have a lot many features, which is true, but then its also significantly more expensive. As an example, costs of cars in japan

    Toyota Axio (1.3L): USD 20,000
    Toyota Vitz(1.0L): USD 17,000
    Toyota Vitz(1.3L): USD 18,000
    Toyota Vitz(1.5L): USD 24,000
    Toyota Prius (1.8L): USD 30,000

    Suzuki Alto (660cc): USD 12,000
    Suzuki Swift(1.2L): USD 16,300


    So for comparison purposes, the new shape of Alto, the build quality, the abs, airbags, etc that these foreign cars come with...almost doubles the price as compared to a local teen dabba Mehran. Both PakSuzuki and Suzuki japan are making profit (they are not NGOs or trusts) but nowhere close to that 500% figure you pulled out of thin air.

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    On a lighter note, if Indus and atlas makes small cars, What would PakSuzuki sell,


    Anyways coming back to the topic, The goverment hasnt been very much friendly with the local assemblers, And (taali do hath se bajti hai) local assemblers and the goverment both are responsible for the crappy auto industry of Pakistan.

    Another thing is that Pakistans auto industry is around 20-25 years old, One cant compare it to that of Japans, The market is small if Japanese cars are imported, Let cars alone, if anything is imporrted and sold cheaper and effects yours and mine business we would bribe the goverment to stop it or atleast do what ever we can.

    The goverment is responsible to see that their isnt monopoly/cartail and also see the local industry isnt damaged by imports

    Just for example take Phillips, They are importing bulbs from China and have shut down the plant in Pakistan, In case Philips was manufacturing in Pakistan and some importer starts bringing in cheaper bulbs (philips bulbs) from China, obviusly Philips cant work here.

    One has to understand cost of production is going up in Pakistan, 2-3 out of 7days a week factories are off, political situation energy crisis bla bla,

    Altho the recent hike in dollar has brought an advance since Pak currency devalued, peple are again conisdering Pakistani products over China and India because of the devalued currency.
    Get over the fact that Xli lacks power windows, Its an Xli because it lacks thoose features or else it would be a Gli or an Altis if had all the goodies.

  8. #27
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    Depreciation and its Effect

    There is one phenomenon that we Pakistanis have no comprehension of, that is depreciation of vehicles, let me explain it with an example.

    Mercedes-Benz requires no introduction, it is world renowned manufacturer, they invented the car more then century ago so they have earned the prestige of the world with their long and illustrious history, quality, reliability and so have unmatched heritage.
    In Mercedes portfolio they have E class which is synonymous for being the utmost choice of the executives from all over the world.

    In 1960's Merc's engineers started preparing the vehicles independently for motorsports (after 1954 Le-Mans disaster, factory stopped their involvement in motorsport), so this void was filled with these Merc engineers who in their spare time prepared the vehicles for racing, and they were successful to such an extent that eventually AMG were brought in-house, and now all of their motorsport activity are performed under AMG banner, while they also started tuning the road cars, and AMG tuned vehicle is not just a shiny badge, in the world of mass production where efficiency is the mantra, the AMG vehicles are finished by hand, the engine alone is built from start to finish by single artisan whose name is placed for the reference, and no part of stock vehicle is left unturned, and this executive luxury sedan performs almost on the same level of super-cars while still remaining executive sedan as well, but for all of this bespoke quality, a very hefty premium is charged compared to the stock E550.

    My flowery post till this point looks like paid advertisement for E63 AMG, but the praise for E63 AMG is justified as its extraordinary vehicle, but there is another reason as well, let me give you price in USA.

    Official Mercedes-Benz USA price

    Brand New E63 AMG Price=$ 92,770
    CPO E63 AMG Model 2013 Mileage 3,127 Price=$ 83,847
    CPO E63 AMG Model 2012 Mileage 13,464 Price=$ 76,888
    CPO E63 AMG Model 2011 Mileage 55,991 Price=$ 51,994
    CPO E63 AMG Model 2010 Mileage 42,947 Price=$ 47,998

    Autotrader price in USA

    CPO E63 AMG Model 2013 Mileage 3,127 Price=$ 83,847 (Same car is present in autotrader.com)
    Autotrader E63 AMG 2012 14,379 Mile Price=$ 63,999
    Autotrader E63 AMG 2011 48,991Mile Price=$ 48,986
    Autotrader E63 AMG 2010 65,835 Mile Price=$ 40,999

    Note; Autotrader.com prices are not fixed, they are flexible and bargaining, negotiation and haggling is still the order of the day.

    Hopefully you see a pattern in the aforementioned prices and also get the reason for my flowery opening paragraphs. Its bit shocking isn't it? That even the Certified Pre-owned vehicle (that certification process is very extensive and hefty sum is charged) still can not ensure better resale value, that you have one of the most desirable vehicle in the world during ownership of which the largest expense during its ownership is, yes you guessed it right, depreciation.

    Well does it mean? It means that no matter how prestigious the make and how desirable the end-product, its still not immune to the depreciation of value when it becomes used item, and also these are ruthless and cutthroat environment for vehicle manufacturers, at the end of year even the vehicle that is on the assembly line is aready depreciating in value.

    Manufacturers have to evolve constantly in these circumstances or die a slow death (even the mighty can die, just check the GM portfolio for the brands that are discontinued), and don't think this is just north American phenomenon, in Pakwheel the very favorite/active thread is about the discounts in Indian market where most of members come out shaking their heads in disbelief.

    Also in these markets List price is just the beginning point for negotiations, and dealers throw in additional goodies to attract the customers, now compare this situation with local market where getting the vehicle on list price is quite an achievement, while for the service from dealer check the threads from new city owners who thought that fuel gauges in their vehicles are faulty, when new owners put Rs1000 worth of fuel & the gauge still remains at the bottom, they thought surely the gauge is stuck, the response from dealer to their customer was you were lucky to even get to the petrol station, half a kilometer further and you would have being stranded in the middle of road with no fuel, as dealers suck all the fuel that comes from factory.

    In Pakistan the specifications of vehicles remain static for a generation, which for Suzuki Bolan means 1984-2012, and then they had to change the engine because of emission regulation otherwise Pak Suzuki would have happily deliver same vehicle (with falling quality standards) for 50 years, why should Pak Suzuki let public buy JDM alternative, God forbid if someone get to know about the advances in last 30 years and get to know the comfort, safety and economy, why would that person buy the Bolan again?
    In the land where value of vehicles appreciate with the passage of time, why should manufacturers bring new product.

    While the situation in the rest of world is such that the moment the companies stop the path of innovation they would sink to the abyss, Survival of the fittest.

    Faisal

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    as faisal said - the communist cars (topping the list is the Trabant from E Germany) is a class example of Pakistani car industry.

    In E Germany - A new Trabant (which was the worst POS made in the world - literally a 2 cylinder 2 stroke and a body made of cotton and paper) would cost you quite a sum and you had to wait 2 years for it. So old ones had some value - sometimes even higher than new (OWN MONEY)

    not much later than the wall collapse - Trabant vanished from the face of this earth.
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    Quote Originally Posted by chinyoti View Post
    On a lighter note, if Indus and atlas makes small cars, What would PakSuzuki sell,


    Anyways coming back to the topic, The goverment hasnt been very much friendly with the local assemblers, And (taali do hath se bajti hai) local assemblers and the goverment both are responsible for the crappy auto industry of Pakistan.

    Another thing is that Pakistans auto industry is around 20-25 years old, One cant compare it to that of Japans, The market is small if Japanese cars are imported, Let cars alone, if anything is imporrted and sold cheaper and effects yours and mine business we would bribe the goverment to stop it or atleast do what ever we can.

    The goverment is responsible to see that their isnt monopoly/cartail and also see the local industry isnt damaged by imports

    Just for example take Phillips, They are importing bulbs from China and have shut down the plant in Pakistan, In case Philips was manufacturing in Pakistan and some importer starts bringing in cheaper bulbs (philips bulbs) from China, obviusly Philips cant work here.

    One has to understand cost of production is going up in Pakistan, 2-3 out of 7days a week factories are off, political situation energy crisis bla bla,

    Altho the recent hike in dollar has brought an advance since Pak currency devalued, peple are again conisdering Pakistani products over China and India because of the devalued currency.

    Consider this

    at the birth of Pakistan - it had a very good transport network of railways.

    it was a bit ahead of europe as WW2 had just finished and literally the big heavy countries of today were destitute poor to the extent of famine.

    What happened to the progress that you can have some extremely beat down countries work upwards to become the benchmark of "progress" while we remained stuck in time for about 50 years - mostly because progress did not matter, what mattered was "land mafia, slavery, tax evasion, corruption" etc..

    Its not alien , look up the medieval times of europe.
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    Quote Originally Posted by adeel_yasir0 View Post
    @Abdussamad
    removing barriers means you dont wont to see your country out of crises. Pakistan maximum part is running on importation (even tamator is being imported from India) which means your money is outgoing which reduces your economy level and foreign reserves. later we cry on increasing prices without knowing whats going on. pakistan men aj kal investment land ar property/construstion men o ri hai... and these things are not gonna support your economy.
    Your understanding of economics is rather limited. Let me explain. Right now we have very little competition and as a result you have these parasitic local assemblers that sell us crap at exorbitant prices. The only way to change that is to allow more imports. Not a complete free for all mind you but definitely more than we currently allow. A little bit of competition from imports will give these comfortable local manufacturers an incentive to improve their products.

    Second the idea that imports are bad is laughable. You only provide protection to your industry while it is in infancy. Our industry is decades old and has had plenty of coddling. It is time for them to grow up and face the world.

    Third the biggest expense when it comes to cars is not the one time cost of the car itself but the running cost of fuel. Over its lifetime a car will consume more fuel than the initial cost of the car itself. Do you know that the largest head in our import bill consists of petroleum products? If we allowed the import of more fuel efficient cars it would result in a reduction in our oil import bill. Consider that just about any used kcar is TWICE as efficient as a locally assembled car. Our lot would also improve their technology when faced with sustained competition from imports.

    Fourth have you heard of the CNG crisis? First we protected our car industry to such an extent that they became comfortable selling us cars with obsolete fuel inefficient engines. Second we introduced CNG because our people could not afford fuel for these inefficient cars. Third we are crying because we've run out of gas! So yeah fix the root of the problem and force our local industry to introduce more fuel efficient cars. The only way to do that is to allow imports.

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    Quote Originally Posted by Xulfiqar View Post
    Infact IMC, PS, AHL etc should be forced to produce enough vehicles that they can export them to the extent of completely offsetting the import bill of their parts. Only after then should they be allowed to operate a sales unit in the country.
    They're private sector companies not your dad's business that you can do what you like with them. They take orders from no government. If you tried this they would pack up and leave. Simple as that.

    In a free market economy a government can influence business behaviour with incentives or taxes - carrot or stick so to speak. Currently it is protecting the local industry by imposing taxes on used car imports. Ease those taxes a little and keep them eased. Then watch as the auto industry responds to imports by improving their products. In time they will have improved to such an extent that they can start exports. But not before.

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    I still think the only way to fix that is to apply a mass transport system, everything else is a hot fix - which never reliably work.
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    Quote Originally Posted by Xulfiqar View Post
    I still think the only way to fix that is to apply a mass transport system, everything else is a hot fix - which never reliably work.
    Yep that would be ideal.

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    Quote Originally Posted by Abdussamad View Post
    They're private sector companies not your dad's business that you can do what you like with them. They take orders from no government. If you tried this they would pack up and leave. Simple as that.

    In a free market economy a government can influence business behaviour with incentives or taxes - carrot or stick so to speak. Currently it is protecting the local industry by imposing taxes on used car imports. Ease those taxes a little and keep them eased. Then watch as the auto industry responds to imports by improving their products. In time they will have improved to such an extent that they can start exports. But not before.
    Yep they are not my daddys business. But that is the rule around the world when such industry is welcomed. Just like VW in the USA produce diesel engines for passenger cars but only 2 models are sold with them, the rest are sent to SA, back to EU etc just to satisfy this bit - otherwise they will be slapped with heavy fines as this company already is competing local brands.

    but Pakistan's local brand is a khota cart - it doesnt have any set of wheels with engines to compete with. But trying to get a paltry sized auto industry of Pakistan to do an improvement for the lean market of Pakistan will not fly. They have no interest in it. The excuse of creating jobs sounds funny at this scale because its akin to lean as game meat. Nothing can be done to help this because the big shots (ultimate zameendar jaahil etc) only listen when they see dollars flowing their personal way and will only approve what the dollars say.

    Currently the dollars say to keep these three tiny manufacturers protected because the "local partners" want to keep the mint going - no matter at what expense. Which leads to my point of communist country cars and how it applies to Pakistan.
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    @Abdussamad : so should we understand that free market economy means being blackmailed at hands of a company afraid they wl pack up and leave. There r no rules of game. Its free for all to loot and plunder.....

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    Quote Originally Posted by majedkhan View Post
    @Abdussamad : so should we understand that free market economy means being blackmailed at hands of a company afraid they wl pack up and leave. There r no rules of game. Its free for all to loot and plunder.....

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    Well it is not a free for all, now is it? A free for all would mean no trade barriers meaning you can import whatever you like at 0 duty. We are far from that. It is because you've erected trade barriers such as high customs duties that the local assemblers have become so bold as to do what they do. The blackmailing is because of the trade barriers and not because of the free market. Now you want to rectify that situation and the correct way to do that is to remove some of the trade barriers gradually.

    What Xulfiqar was suggesting was that we should dictate terms to the private sector. That is tell them how to run their business. You can't do that. If you want to do that you will have to nationalize the companies. Private sector companies don't take orders from the government. This is something very basic and I shouldn't have to explain it.

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    Quote Originally Posted by Xulfiqar View Post
    Yep they are not my daddys business. But that is the rule around the world when such industry is welcomed.
    Ah then you should have lobbied the government of Pakistan decades ago when these companies first invested in Pakistan. Moving the goal post now will not work.

    BTW it's funny that you should talk about the US market. There is no comparing that country with Pakistan.

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    We are not moving the goal post. Its there like it was. This cluster situation is because money flowed into some big pockets can even overturn the constitution in this country. And these jap companies are not angels anyway. Pakistani auto sales for them is mostly the black book for deductions.

    Anyway if u don't like to compare the us lets compare pakistan auto industry to thailand. Common sense rules are the same. No business is welcomed in any country to double dip the cheese. Pakistan is different.

    Realistically a car in pakistan is still a luxury and the stupid customs tarrif which is the same from the raj makes it worse.

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    Our car companies are looting people, anyone accepts or not, it's a fact.
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  21. #40
    PakWheeler Follow
    abidjafri's Avatar
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    Just like our future leader in making BelaWul Putto stated in his Sindh Festival Ad we are STATUS-QUO Champions ... The speed money and commission rates of bureaucracy are fixed with existing manufacturer's and we dont want to work wid new entrants coz that will mean to stop drinking, waking up and working wid them to finalize our income details ... so we create mafias and barriers so that new comers arent interested or even if they come like Adam Revo we screw them over coz we are all interested in Re-Sale ... In the end why shud we polluticians care about the Average Joes / Middle Class people ... they are born to suffer and work like donkies to pay taxes for our ayashi ...
    A Winner Never Quits -- A Quitter Never Wins !!!

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