Breaking monopoly: Volkswagen to plant its feet in Pakistan?

[airmarshal]

Good stuff @cb4. The way Pakistan automotive industry is structured, its not growth oriented. Its a cartel.

The monopoly of 3 assemblers is producing vehicles with out of date technology, poor quality and extremely high prices. Se we need to restructure the automotive industry first.

 

[VCheng]

I remember visiting Mexico in 1994ish and 99% of the cars on the road there (mostly taxis) were Volkswagens. I always thought they were the first ones into a market when they see a consumer demand brewing. Not sure how Suzuki and others beat them to Pakistan. I think Volkswagen got into China early.

It is the size of the market. Mexico is over a million units annually and growing, and Pakistan by comparison is only about one tenth of that and stagnant. Add in the overall business environment and one can see why VW would take care in setting up shop here. May be it thinks the time has come? I don't know.

 

[airmarshal]

Surprised they are not there already

List of Volkswagen Group factories - Wikipedia, the free encyclopedia

Volkswagen is pretty much everywhere and they are very successful.

However Volkswagen has had a bit of a bad rep in the USA due to some crappy quality cars in the 1990's. They haven't been able to break into the top 20 model sales since.
Team USA | Page 80

This was just published today
VW exec tackles quality woes

After 2003 onwards, those quality issues were addressed.

I have a VW. I m extremely satisfied. No quality issues at all. I m driving that car since 2005. Except for oil, bulbs, tyres and silencer I have changed nothing and did not go to workshop for any issue.

 

[Archie]

That will be a great thing when it happens. If we can persuade them to set up an assembly plant to start with that will be awesome. We/They can always build from there. This will not only bring in foreign investment but will also create job opportunities and most importantly, give the stupid Toyota, Honda and Suzuki a TOUGH competition. These are milking our public selling stupid crappy cars for hefty prices. A mehran in 900000 is as unfair as it may get.

On a personal level, it will make me use my Cultus for another year or two hoping i can get the choice of VW by that time, was just about to change the car

900000 PKR
that's like 8500 USD
from what I know, Mehran is Basically Maruti 800 from 1990s
that model used to cost 4000 USD in India

at present the Cheapest car in India is the Tata Nano which cost 3000 USD and comes with an Automatic Gearbox

so for the Mehran to cost nearly 3 times the Nano is nothing short of open Robbery

 

[surya kiran]

Yes honday is good, among the best available here. My first choice to replace this Cultus of mine was to gor for some refurbished Japanese options but then i studied all the details, initial costs, fuel consumption, spare parts and off course, the car itself, looks and luxury/comfort and Honda City was the best i could find. In fact i was quite set to go for Honda City

However as i mentioned, the news about VW is great as it may not only offer a better alternative but may also effect current market prices. So thinking to wait for sometime.

What is the import duty to get a car from India? I want an auto Nano, wifey is dead against it.

Also, @cb4 where do the auto components come from? Are these imported or manufactured in Pakistan?

 

[Arsalan]

What is the import duty to get a car from India? I want an auto Nano, wifey is dead against it.

Also, @cb4 where do the auto components come from? Are these imported or manufactured in Pakistan?

No idea at all. However there have been a few reports that there are some Audi cars being brought in from India and the dealership owner is on other then our future Quaid, Mr. Hamza Shahbaz Sharif

 

[Hamartia Antidote]

After 2003 onwards, those quality issues were addressed.

I have a VW. I m extremely satisfied. No quality issues at all. I m driving that car since 2005. Except for oil, bulbs, tyres and silencer I have changed nothing and did not go to workshop for any issue.

Hopefully they have.
I remember back in the '90s we'd set up tight cone paths in a big parking lot and see who could do the route the quickest (BTW the guys in the little Miata's would smack the rest of us good). I saw *2* Volkswagens have a tire fly off. It wasnt the nuts that failed ...it was all the bolts which sheared off at the axle!! Another time I was stopped at a red light and heard a thump hitting the side of my car and saw a tire rolling through the intersection. Looked in the rearview mirror and saw a VW with a tire missing.

It's tough to overcome a bad rep.

 

[Dalit]

ISLAMABAD: The incumbent government has gotten a rare opportunity to break the decades’ old monopoly of local car assemblers as world-renowned auto manufacturer, Volkswagen, is keen to introduce its brands in Pakistan.

Germany’s biggest and the world’s second largest automobile manufacturer in terms of market share, Volkswagen, wants to do business in Pakistan, said an official of the Board of Investment (BoI).

A 14-member business delegation of Germany businessmen is visiting Pakistan including representatives of automobile company, Volkswagen, said Dr Cyrill Nunn, German Ambassador to Pakistan on Tuesday. He was addressing a press conference to share details of what he described as a “highly important” visit.

According to Pakistani officials, Volkswagen was keen to do business and the government also wanted at least one European brand to set up a plant in the country to break the monopoly of local car assemblers. They said the three local assemblers have colluded and resultantly, on average, a locally-assembled car is roughly Rs500,000 expensive.

In allowing the new manufacturer to set up plants, the government has to amend its existing automobile policy, said Pakistani officials. They added that the government has decided, in principle, to amend the automobile policy and will add medium-knocked down (MKD) units in the definition. The German officials had requested the government to accommodate semi-knocked down and MKD units in the automobile category.

The Volkswagen is said to be engaged in negotiations with prospective local partners, said Pakistani officials.

In the next two years, the government will try to introduce at least one European brand – German or Italian – said Miftah Ismail, BoI chairman, while talking to The Express Tribune. Ismail welcomed the German delegation, hoping that it will help strengthen bilateral economic ties.

“To get such a delegation into Pakistan, you have to persuade them and once they are in Pakistan they realise it’s a huge country,” said Dr Nunn.

Other areas of interest

Meanwhile, a multi-billion Euro energy giant, Voith, is also part of the business delegation. The company has won the contract for providing machinery and equipment for Dasu Hydropower Project and is now eying the Diamer-Bhasha Dam. Companies dealing in consumer goods and transportation are also part of the delegation, said the ambassador.

The delegation will hold meetings with Minister for Commerce, BoI, Chief Minister Punjab, besides meeting the business community leaders in Karachi.

The visiting delegation will be keen to know the steps the government was taking for economic reforms, reducing energy shortages and investment opportunities in Pakistan, said Dr Nunn.

Dr Nunn said that Pakistan’s decision to allocate funds for Diamer-Bhasha dam and two Liquefied Natural Gas-fired power plants in the new budget offers business opportunities and German companies will be bidding for these projects.

In 2014, Pakistan’s exports to Germany went up by 20% on the back of the Generalised System of Preference Plus scheme, said the ambassador. However, Germany’s exports to Pakistan plunged by 3.2% and this is also a reason behind the delegation’s visit, said the ambassador.

“The volume of bilateral trade, currently standing at €2.1 billion, is far less than the potential and even lower than Germany’s trade with countries like Bangladesh,” said Dr Nunn.

Breaking monopoly: Volkswagen to plant its feet in Pakistan? - The Express Tribune

Awesome development.

I have a Golf 6 (GTI). Man, I love my ride!

Would love to have a Golf in Pakistan and drive it up the Northern Areas.

 

[airmarshal]

Hopefully they have.
I remember back in the '90s we'd set up tight cone paths in a big parking lot and see who could do the route the quickest (BTW the guys in the little Miata's would smack the rest of us good). I saw *2* Volkswagens have a tire fly off. It wasnt the nuts that failed ...it was all the bolts which sheared off at the axle!! Another time I was stopped at a red light and heard a thump hitting the side of my car and saw a tire rolling through the intersection. Looked in the rearview mirror and saw a VW with a tire missing.

It's tough to overcome a bad rep.

German cars generally drive so much better than Japanese. When I bought mine, I was inclined towards Japanese but then the quality of fit, finish and materials, the ride quality of VW is way above Japanese, for the same price.

My VW feels like a tank. Very solidly built.

You are right. Its not easy to overcome bad rep in a market with mature and thinking consumers with so many choices.

 

[syedali73]

ISLAMABAD: The incumbent government has gotten a rare opportunity to break the decades’ old monopoly of local car assemblers as world-renowned auto manufacturer, Volkswagen, is keen to introduce its brands in Pakistan.

Germany’s biggest and the world’s second largest automobile manufacturer in terms of market share, Volkswagen, wants to do business in Pakistan, said an official of the Board of Investment (BoI).

A 14-member business delegation of Germany businessmen is visiting Pakistan including representatives of automobile company, Volkswagen, said Dr Cyrill Nunn, German Ambassador to Pakistan on Tuesday. He was addressing a press conference to share details of what he described as a “highly important” visit.

According to Pakistani officials, Volkswagen was keen to do business and the government also wanted at least one European brand to set up a plant in the country to break the monopoly of local car assemblers. They said the three local assemblers have colluded and resultantly, on average, a locally-assembled car is roughly Rs500,000 expensive.

In allowing the new manufacturer to set up plants, the government has to amend its existing automobile policy, said Pakistani officials. They added that the government has decided, in principle, to amend the automobile policy and will add medium-knocked down (MKD) units in the definition. The German officials had requested the government to accommodate semi-knocked down and MKD units in the automobile category.

The Volkswagen is said to be engaged in negotiations with prospective local partners, said Pakistani officials.

In the next two years, the government will try to introduce at least one European brand – German or Italian – said Miftah Ismail, BoI chairman, while talking to The Express Tribune. Ismail welcomed the German delegation, hoping that it will help strengthen bilateral economic ties.

“To get such a delegation into Pakistan, you have to persuade them and once they are in Pakistan they realise it’s a huge country,” said Dr Nunn.

Other areas of interest

Meanwhile, a multi-billion Euro energy giant, Voith, is also part of the business delegation. The company has won the contract for providing machinery and equipment for Dasu Hydropower Project and is now eying the Diamer-Bhasha Dam. Companies dealing in consumer goods and transportation are also part of the delegation, said the ambassador.

The delegation will hold meetings with Minister for Commerce, BoI, Chief Minister Punjab, besides meeting the business community leaders in Karachi.

The visiting delegation will be keen to know the steps the government was taking for economic reforms, reducing energy shortages and investment opportunities in Pakistan, said Dr Nunn.

Dr Nunn said that Pakistan’s decision to allocate funds for Diamer-Bhasha dam and two Liquefied Natural Gas-fired power plants in the new budget offers business opportunities and German companies will be bidding for these projects.

In 2014, Pakistan’s exports to Germany went up by 20% on the back of the Generalised System of Preference Plus scheme, said the ambassador. However, Germany’s exports to Pakistan plunged by 3.2% and this is also a reason behind the delegation’s visit, said the ambassador.

“The volume of bilateral trade, currently standing at €2.1 billion, is far less than the potential and even lower than Germany’s trade with countries like Bangladesh,” said Dr Nunn.

Breaking monopoly: Volkswagen to plant its feet in Pakistan? - The Express Tribune

Suzuki sey bada commission khila diya hoga. Is this a news? And if it is, it is about the corruption of this regime.

This is definitely what we need. Tired of seeing the same old 1980s Mehrans in the streets being bought and sold at extremely inflated prices.

You ll still pay premium price. There is no relief for Pakistani public. Commission sey kuch bachey ga to aam logon ko transfer hoga.

 

[Pak_Track]

Thank god. Tired of seeing Hondas, toyotas and suzukis everywhere.

 

[syedali73]

Pakistan is 7th largest country and the world is starting to realize the potential of the market. Besides the $ 46 Billion from China, Japanese JETRO termed Pakistan the second best place in the world for business and the EU gave the GSP Plus. Its only matter of time other countries will start showing up. Case in point is Turkey, which has been pushing for bigger ties and recently held negotiations for free trade agreement.

Why not, only in Pakistan unimaginable profits are possible. Just take care of ruling family and then rip Pakistami public off as much as you want. Have we not seen what international pharma is doing in this country? Or the IPPs?

 

[Dalit]

How about KIA from South Korea? They make good cars. Pakistan should diversify.

 

[Bashido]

atleast now Mehran crap will now try to improve to stay in competition.

i think no one need mehran anymore if VW just launched their "GOLF" and i am employ of VW here in Germany and i am much happy and it will be great news if they open their R&D also.

 

[syedali73]

How about KIA from South Korea? They make good cars. Pakistan should diversify.

Bhai, you diversify as much as you want, prices wont come down and quality will always be compromised. They'll feed ruling elite's greed or provide quality service and support to ordinary Pakistanis? I have grown old seeing and experiencing such dramas. There is no hope for ordinary Pakistanis.