Pak Suzuki ready to invest $460m if new auto policy revised

[Arsalan]

Isn't that the typical story for Pakistan: lots of claimed "potential" that is never truly realized. The odds for success of this new policy in realizing its claimed potential are slim to none, sir, truth be told.

True. But there are two reactions to this;

1. Sit back and keep criticizing, justified if we look at the past.
2. Try and hope, even pray that things change for better.

We agree that there is potential. Now we can either just ignore that, reasoning that nothing good have been achieved from such situation sin the past. Just leave it to be and simple keep criticizing everyone else for our troubles.
OR
We can give it another try.

 

[VCheng]

True. But there are two reactions to this;

1. Sit back and keep criticizing, justified if we look at the past.
2. Try and hope, even pray that things change for better.

We agree that there is potential. Now we can either just ignore that, reasoning that nothing good have been achieved from such situation sin the past. Just leave it to be and simple keep criticizing everyone else for our troubles.
OR
We can give it another try.

What was Einstein's definition of madness, Sir? What exactly does this new policy do any differently than what has been tried in the past? Hopes and prayers are good, but no substitute for sound economic policy, which is simply not in evidence here. Can any car manufacturer in the world make a sound business case for new manufacturing plant in a market with less than a quarter million units annual sales, in an environment that prevails in Pakistan? Dollars and cents will trump hopes and prayers here, Sir. Describing reality truthfully is far better than providing false hopes as a salve, unless the goal is to keep the ignorant right where they are.

 

[airmarshal]

The problem is not that Toyota Honda or Suzuki cant manufacture good quality cars. The problem is the government and it policies. The govt of the thieves took 3 years to formulate an auto policy and instead of encouraging competition, it is offering discrimination.

Why does Suzuki manufacture such good quality cars across border in India that it exports from there? Why dont they make such cars in Pakistan? Most of the readers play blame game and show themselves as victims of Suzuki, Toyota or Honda. What they dont understand is that auto policy has failed to encourage competition. Lack of competition and market size make these assemblers lazy.

The tax structure around the car and its components is such that consumers are not only paying tax on imported parts, they are also paying exorbitant tax on the finished product. This is not double taxation. This quadruple or triple taxation. On top of that, the govt of thieves has imposed a kind of penalty on both tax filers and non-tax filers. This makes the price of the car almost as high as prices in Canada or US. Since consumers keep buying no matter price the assemblers offer, and there is no quality check from govt as its only interested in collecting unjust taxes, the quality is low and the price is high.

There is also a need to work on perception of the country. If I have money to start a business, I m not willing to invest in the country. The perception of our country is very bad. Ruled by the thieves, going around the world with begging bowl.

 

[Viper0011.]

6th May 2016,

ISLAMABAD - Suzuki plans to invest $460 million into Pakistan if the government provides the right incentives and amends its new auto policy, the company said Friday.

So these fools from Suzuki deprived the entire Pakistani nation on current vehicle standards for 4 decades, and kept selling junk worth quarter of the price they charge. But, now, that they know their days are numbered due to the models and capability that Audi, Renault, VW, Volvoe and Ford might bring, they "all of a sudden" want to invest $ 460 million to modernize the crap they've been selling to the Pakistanis? Where were they for the past 40 years if they REALLY cared for their customers and wanted to introduce new designs and features??

To $ 460 million, I'd say HELL NO!!!! Let Audis, VW's and Volvos come to Pakistan. Even one or two more brands will be sufficient to seriously damage Toyota, Hinda and Suzuki's monopoly and introduce new designs and technologies in the car. These monopolist companies will then be forced to drop prices and with cheaper prices, still produce much nicer vehicles for the people.

The government itself will continue to ensure that there is no "healthy competition" in the local markets, despite all the lip-service and tall claims.

Is that right? Weren't you that negative person (as always), who told me a year and a half ago that no other car maker would ever come to Pakistan..... when I FIRST reported that Pakistan will be getting German car manufacturing plants from Audi, VW and Volvo?

Now blaming the government for something they've actually pushed to do, which is to bring modern manufacturers through their policies into Pakistan?

Do you have any sense of logic and common sense or do you change positions like IK every day, depending on the mood is???? Too many negatives trying to make a positive Pakistan

 

[VCheng]

Is that right? Weren't you that negative person (as always), who told me a year and a half ago that no other car maker would ever come to Pakistan..... when I FIRST reported that Pakistan will be getting German car manufacturing plants from Audi, VW and Volvo?

So how many car manufacturers have announced plans to come to Pakistan thus far? ZERO.

 

[Mr.A]

The problem is not that Toyota Honda or Suzuki cant manufacture good quality cars. The problem is the government and it policies. The govt of the thieves took 3 years to formulate an auto policy and instead of encouraging competition, it is offering discrimination.

Why does Suzuki manufacture such good quality cars across border in India that it exports from there? Why dont they make such cars in Pakistan? Most of the readers play blame game and show themselves as victims of Suzuki, Toyota or Honda. What they dont understand is that auto policy has failed to encourage competition. Lack of competition and market size make these assemblers lazy.

The tax structure around the car and its components is such that consumers are not only paying tax on imported parts, they are also paying exorbitant tax on the finished product. This is not double taxation. This quadruple or triple taxation. On top of that, the govt of thieves has imposed a kind of penalty on both tax filers and non-tax filers. This makes the price of the car almost as high as prices in Canada or US. Since consumers keep buying no matter price the assemblers offer, and there is no quality check from govt as its only interested in collecting unjust taxes, the quality is low and the price is high.

There is also a need to work on perception of the country. If I have money to start a business, I m not willing to invest in the country. The perception of our country is very bad. Ruled by the thieves, going around the world with begging bowl.

Very well said.

 

[airmarshal]

Instead of Audi, which tax thieves, money launderers and loan defaulters can afford, Pakistan need cheap, affordable cars that people who pay taxes, save money in a just and halal manner can afford.

 

[Max Pain]

than what should we buy?
might i remind you that govt doesnt allow import of vehicles

its govt that is facilitating local industry while their products are killing thousands of Pakistanis probably more than what terrorists killed due to lack of airbags and other safety issues

my very own cousin died and guess what it was his mehran,
what should be done by people is forcing the government to implement safetly regulations in ADP's so that safer cars are made,
Government does allow import of vehicles, we see imported vehicles every other day

 

[Arsalan]

What was Einstein's definition of madness, Sir? What exactly does this new policy do any differently than what has been tried in the past? Hopes and prayers are good, but no substitute for sound economic policy, which is simply not in evidence here. Can any car manufacturer in the world make a sound business case for new manufacturing plant in a market with less than a quarter million units annual sales, in an environment that prevails in Pakistan? Dollars and cents will trump hopes and prayers here, Sir. Describing reality truthfully is far better than providing false hopes as a salve, unless the goal is to keep the ignorant right where they are.

The sales are on the increase. You are quite aware on that.

Sir you are overlooking the export market and the edge Pakistan Manufactured cars will have due to relatively lower prices. This is what i was pointing to when i said that the potential is there and we should keep pushing to exploit that.

What would have been a better alternative? I suppose you do have one. It is very easy to denounce anything any little effort. What is required is one come up with a better solution. I will be glad to hear your version of the solution as well.

 

[VCheng]

Sir you are overlooking the export market and the edge Pakistan Manufactured cars will have due to relatively lower prices. This is what i was pointing to when i said that the potential is there and we should keep pushing to exploit that.

What would have been a better alternative? I suppose you do have one. It is very easy to denounce anything any little effort. What is required is one come up with a better solution. I will be glad to hear your version of the solution as well.

Sir, there is already excess capacity available in the region, with manufacturing plants already up and running. Pakistan missed this boat a few decades ago. Manufacturing in Pakistan is not cheap, or even competitive with other countries for products like cars. The only advantage Pakistan has is abundant cheap unskilled labor, but that is not really relevant to value-added hi-tech manufacturing since labor is only a small percentage of the total cost of the product.

Yes, there is a solution, but the government is not able to implement it it: open up the local market to international competition. That will indeed benefit the consumers, but at cost of the local manufacturers.

Not just the car market, the same dilemma applies to many other sectors. Protecting the local industry from international competition will make for poor choices at high prices. Opening up the markets will give good products to the consumers, but at cost of destroying the local industry. Trying to muddle through as the Pakistani government tries to do does not work, as we can see.

It is easy to claim that Pakistani products can compete in the international market, but that is almost always not true, truth be told bluntly. Decades of crony protectionism have made sure of that, Sir, and there is are no indications that this is about to change, and certainly not due to this recently announced auto policy.

 

[Arsalan]

Sir, there is already excess capacity available in the region, with manufacturing plants already up and running. Pakistan missed this boat a few decades ago. Manufacturing in Pakistan is not cheap, or even competitive with other countries for products like cars. The only advantage Pakistan has is abundant cheap unskilled labor, but that is not really relevant to value-added hi-tech manufacturing since labor is only a small percentage of the total cost of the product.

Yes, there is a solution, but the government is not able to implement it it: open up the local market to international competition. That will indeed benefit the consumers, but at cost of the local manufacturers.

Not just the car market, the same dilemma applies to many other sectors. Protecting the local industry from international competition will make for poor choices at high prices. Opening up the markets will give good products to the consumers, but at cost of destroying the local industry. Trying to muddle through as the Pakistani government tries to do does not work, as we can see.

It is easy to claim that Pakistani products can compete in the international market, but that is almost always not true, truth be told bluntly. Decades of crony protectionism have made sure of that, Sir, and there is are no indications that this is about to change, and certainly not due to this recently announced auto policy.

Well i though that bringing in new players is what we are all advocating aren't we? What i understand from your post, you are more focused toward opening up the market by importing cars and i am talking about opening up to new players by bringing them in country to make and sell here along with exports.
As for the production costs, i agree that cheap unskilled labor wont have much say in the product cost as that do not forms the bulk of production expenditure in this one case however this cheap unskilled labor is just one small part as you yourself mentioned. The over all production cost are also going to be when you factor in the material cots and the exchange rate. Not to mention if the government do end up offering favorable terms.
As for the Pakistani products sir, there are over a 1000 automobile parts manufacturers registered in Pakistan that are supplying car parts to almost all of the work renowned brands. The issue here is that things like this are never brought into public's attention and the result is that we end up with our people either blaming and bashing the government and the state for anything that happens or with people living in a delusion of grandeur about about country. Both of which is not true.
I will stand by my statement. The new auto policy is a good move and i hope that it will bring new players to the market. That wont only help the local consumer who are being robbed of there money due to lack of choices but will have the potential to earn valuable foreign exchange and creating thousands of job. All in all, it will be a nice positive development and i am all support for that.

 

[VCheng]

Well i though that bringing in new players is what we are all advocating aren't we? What i understand from your post, you are more focused toward opening up the market by importing cars and i am talking about opening up to new players by bringing them in country to make and sell here along with exports.
As for the production costs, i agree that cheap unskilled labor wont have much say in the product cost as that do not forms the bulk of production expenditure in this one case however this cheap unskilled labor is just one small part as you yourself mentioned. The over all production cost are also going to be when you factor in the material cots and the exchange rate. Not to mention if the government do end up offering favorable terms.
As for the Pakistani products sir, there are over a 1000 automobile parts manufacturers registered in Pakistan that are supplying car parts to almost all of the work renowned brands. The issue here is that things like this are never brought into public's attention and the result is that we end up with our people either blaming and bashing the government and the state for anything that happens or with people living in a delusion of grandeur about about country. Both of which is not true.
I will stand by my statement. The new auto policy is a good move and i hope that it will bring new players to the market. That wont only help the local consumer who are being robbed of there money due to lack of choices but will have the potential to earn valuable foreign exchange and creating thousands of job. All in all, it will be a nice positive development and i am all support for that.

Fair enough, Sir. Let us give this auto policy some time to work and re-discuss this when any such results are delivered. Please do let me know when any new manufacturing plants are announced by the companies being sought.

 

[Arsalan]

Fair enough, Sir. Let us give this auto policy some time to work and re-discuss this when any such results are delivered. Please do let me know when any new manufacturing plants are announced by the companies being sought.

I sure will, plus i am SURE you will get to know about that by yourself too. I wont be surprised if it is you tagging me in a relevant thread.
Three brands were being named initially. Audi, VW and Ford. lets see how it develops. I wont lie but i do share your concerns about this being just another case of "huge potential coming to nothing" due to some screw ups on part of our authorities but i sure am confident about the potential and hopeful that there are no screw ups (despite the tarnished history in this regard)

 

[_NOBODY_]

I lived in Saudi Arabia for 15 years, over there you will find all sorts of cars on the road. So know about the capabilities of many cars.
Korean cars have very cheap maintenance and they are fuel efficient however in terms of performance they are nothing as compared to Japanese cars. American cars are very luxury, very comfortable, strong and they have cheap maintenance cost(expensive as compared to Japanese cars but still cheap) but their fuel consumption is very high even of their small cars as compared to European and Japanese cars. European cars are the best considering the facts that they are very fuel efficient, very strong, very luxury and comfortable(less comfortable as compare to American cars) but most of their cars have high maintenance cost. If there would be proper spare parts availability for European cars only then people would buy them otherwise they wouldn't be affordable. As for Chinese cars I don't know about their capabilities. Pakistan should bring Mazda with proper spare parts availability because according to my experience their cars are much more reliable than Toyota cars and the only reason why there were more Toyota cars in KSA than Mazda cars is because of the nonavailability of its spare parts.

 

[VCheng]

I sure will, plus i am SURE you will get to know about that by yourself too. I wont be surprised if it is you tagging me in a relevant thread.
Three brands were being named initially. Audi, VW and Ford. lets see how it develops. I wont lie but i do share your concerns about this being just another case of "huge potential coming to nothing" due to some screw ups on part of our authorities but i sure am confident about the potential and hopeful that there are no screw ups (despite the tarnished history in this regard)

As I said before Sir, dollars and cents will trump hopes and prayers once the feasibility studies are completed. However, in the event that a manufacturing plants does indeed appear, it would be informative to examine the details of its determined feasibility, specially sales figures and unit costs.