By Aamir Shafaat Khan
KARACHI, Jan 26: Pakistan’s first indigenous Revo car, rolled out by Adam Motor Company Ltd (AMCL) in April 2005, is struggling for its survival and the company is now looking for some equity partners to pull the project out of hot water.
Authorised dealers have stopped taking fresh bookings following drastic fall in its production as the manufacturer has bottomed out the production during the last few months owing to acute financial constraints.
However, one of its authorised dealers said that they had very few stocks available with them for cash sales since the company had suspended fresh bookings. In case a buyer prefers to book the car, the delivery period ranged from four to five months.
The dealer claimed that people who had purchased the car had no complaints so far and were happy. “Perhaps the design could not click the minds of new buyers who have an open option either to buy Japanese assembled 800cc Suzuki Mehran by paying a bit more or purchase used car or jeep,” he added.
“There has been an alarming slowdown in Revo production. The plant has released the last two cars,” Chairman and Chief Executive of AMCL Feroz Khan told Dawn on Friday.
From April 2005 till now, the company produced only 600 cars (500 units of 800cc and 100 units of 1,050cc). These figures are far below of company’s actual targets and expectations. In the last six months the plant should have sold 1,500 units but unfortunately it had not happened, he added.
“I am now searching for some equity partners to pull out the Rs400 million project from the red,” he said with a firm hope that the production would regain its lost pace after two months as few investors had shown keen interest.
When asked about the retrenchment of workforce to bring down the production cost, he said it was true and it had been done because of tremendous slowdown in production. However, he did not give the number of axed workers.
“Slowdown in production does not mean that the demand for cars is drying up. Demand is very much there but we have been facing financial crunch to boost production,” Mr Feroz said. “There is no plan to close down the plant,” he resolved.
He said that soon after the launch of this local car project in April 2005, the government had opened the floodgate for used car imports which resulted in import of 46,000 cars in 2005-06. “When you could buy a used car or jeep at Rs300,000-350,000 then how come the purely home-grown project could sustain the negative repercussion of this policy decision,” he added.
Mr Feroz said that he had never sought tariff concessions and other incentives for the project, but the government should have at least avoided liberalising the import of used cars in order to protect the local industry.
Even if the government had lifted Revo car for local officers it could have surely increased the market presence of car thus encouraging prospective buyers towards new venture, he observed.
He said he had suspended fresh booking of cars because he did not believe in piling up public money and keep them waiting for too long for delivery.
Meanwhile, sources said that local vendors had given all-out support to the project. Even some vendors had cautioned Mr Khan not to take risk in the volatile Pakistani car market by introducing the car from zero level (which means that Revo car design does not exist in other parts of the world).
With the production of Revo in 2005, Pakistan had joined the club of 16 countries which produced their own cars. The engine and transmission were the only sub-assemblies which have been imported from China. The starting deletion level was 67.5 per cent which was projected to increase 90 per cent by December 2007.
Revo 800cc was introduced at Rs270,000 (petrol version) while 1,050cc car was rolled out at Rs379,000. The installed capacity of the plant was 15,000 units per year.