Tuesday, January 16, 2018

Pakistan is the World's 5th Largest Motorcycles Market

Pakistan is the 5th largest motorcycle market in the world after China, India, Indonesia and Vietnam. With 7,500 new motorcycles being sold everyday, Pakistan is also the among the world's fastest growing two-wheeler markets. Passenger car and motorcycle sales in Pakistan are both soaring at rates of over 20% a year.



Auto Demand Soaring:

Nearly 2.3 million motorcycles have rolled off the factories in Pakistan in the last 10 months. The production of motorcycles jumped 22.34 percent in the first four months of fiscal year 2017-18 (FY18), over the corresponding period of in FY17, according to the latest data from Pakistan Bureau of Statistics (PBS) as reported by the media.

Pakistan automobile market is also expanding along with the motorcycle market. Sales of passenger cars soared 20.4% to 103,432 units in the first half of the current fiscal year of 2017/18, recently released official data shows. Car sales were 85,901 in the same period of last fiscal year, according to Pakistan Automotive Manufacturers Association (PAMA).

Durable Goods Ownership:

Ownership of consumer durables like computers, home appliances and vehicles is often seen as an important indicator of the size and health of the middle classes in emerging economies. Examples of periodic household surveys used by researchers to measure such data include NSS (National Sampling Survey) in India and PSLM (Pakistan Social and Living Standards Measurement) in Pakistan.

Durables Ownership in India and Pakistan. Source: KSBL
Pakistan's Trillion Dollar Economy:

Pakistan is now the world's third fastest growing economy among the world's top 25 economies with PPP GDP of over one trillion US dollars, according to  the International Monetary Fund (IMF). IMF has recently raised the country's 2018 growth forecast to 5.6%.
Courtesy:  Ashraf Hameedi, Highforest Capital
Pakistan 3rd Fastest Among Top 25: 

Spectator Index has ranked India first with 7.3% growth, followed by China (6.5%), Pakistan (5.6%), Indonesia (5.3%) and Turkey (3.7%) among the world's 25 largest economies in terms of PPP GDP.

Earlier in October 2017, the International Monetary Fund (IMF) forecast Pakistan's economy to grow at 6.3% CAGR over 2017-2022.

India-Pakistan Comparison:

Dr. Jawaid Abdul Ghani, a professor at Karachi School of Business Leadership, has recently analyzed household surveys in India and Pakistan to discover the following:

1.  As of 2015, car ownership in both India and Pakistan is about the same at 6% of households owning a car. However, 41% of Pakistani household own motorcycles, several points higher than India's 32%.

2. 12% of Pakistani households own a computer, slightly higher than 11% in India.

3. Higher percentage of Pakistani households own appliances such as refrigerators (Pakistan 47%, India 33%), washing machines (Pakistan 48%, India 15%) and fans (Pakistan 91%, India 83%).

4. 71% of Indian households own televisions versus 62% in Pakistan.

Durables Ownership Growth in Pakistan. Source: KSBL
Growth over Time:

Dr. Abdul Ghani has also analyzed household data to show that the percentage of Pakistani households owning washing machines has doubled while car and refrigerator ownership has tripled and motorcycle ownership jumped 6-fold from 2001 to 2014.

Income/Consumption Growth in Pakistan. Source: KSBL

Rapid Income Growth:

Rising ownership of durables in Pakistan has been driven by significant reduction in poverty and growth of household incomes, according to Dr. Abdul Ghani's research. Percentage of households with per capita income of under $2 per day per person has plummeted from 57% in 2001 to 7% in 2014. At the same time, the percentage of households earning $2 to $10 per day per person has soared from 42% of households in 2001 to 87% of households in 2014.  The percentage of those earning over $10 per day per person has jumped 7-fold from 1% of households in 2001 to 7% of households in 2014.

Pakistani Middle Class:

Only 5% of Pakistanis in $2-$4 per day per person income group have college degrees. But 20% of those in $4-$10 have college degrees, according to the survey results.

Pakistan Middle Class Profile. Source: KSBL

Credit Suisse Income and Wealth Data:

Average Pakistani adult is 20% richer than an average Indian adult and the median wealth of a Pakistani adult is 120% higher than that of his or her Indian counterpart, according to Credit Suisse Wealth Report 2016. Average household wealth in Pakistan has grown 2.1% while it has declined 0.8% in India since the end of last year.

Median wealth data indicates that 50% of Pakistanis own more than $1,180 per adult which is 120% more than the $608 per adult owned by 50% of Indians.

GDP Estimates Using Household Survey Data:

Pakistan's GDP calculated from consumption data in PSLM is significantly higher than the government estimates based on production data. The reverse is true of Indian GDP.

M. Ali Kemal and Ahmed Waqar Qasim, economists at Pakistan Institute of Development Economics (PIDE),  explored several published different approaches for sizing Pakistan's underground economy and settled on a combination of  PSLM (Pakistan Social and Living Standards Measurement) consumption data  and mis-invoicing of exports and imports to conclude that the country's "informal economy was 91% of the formal economy in 2007-08". 

Prominent Indian economists Abhijit V Banerjee, Pranab Bardhan, Rohini Somanathan and TN Srinivasan teaching at MIT, UC Berkeley, Yale University and Delhi School of Economics believe that India's GDP estimate based on household survey (National Sampling Service or NSS) data is about half of what the Indian government officially reports as India's GDP. 

Here's a quote from French economist Thomas Piketty's book "Capital in the Twenty-First Century" explaining his skepticism of production-based official GDP figures of India and China:

"Note, too, that the very high official growth figures for developing countries (especially India and China) over the past few decades are based almost exclusively on production statistics. If one tries to measure income growth by using household survey data, it is often quite difficult to identify the reported rates of macroeconomic growth: Indian and Chinese incomes are certainly increasing rapidly, but not as rapidly as one would infer from official growth statistics. This paradox-sometimes referred to as the "black hole" of growth-is obviously problematic. It may be due to the overestimation of the growth of output (there are many bureaucratic incentives for doing so), or perhaps the underestimation of income growth (household have their own flaws)), or most likely both. In particular, the missing income may be explained by the possibility that a disproportionate share of the growth in output has gone to the most highly remunerated individuals, whose incomes are not always captured in the tax data." 

Who is Dr. Jawaid Abdul Ghani?

The PSLM household data cited in this blog post is taken from a recent presentation made by Dr. Jawaid Abdul Ghani at the Karachi School of Business and Leadership (KSBL) where he teaches. KSBL has been established in collaboration with  Cambridge University's Judge Business School. Prior to his current faculty position, Dr. Abdul Ghani taught at MIT's Sloane School of Management and Lahore University of Management Sciences (LUMS). He has a computer science degree from MIT and an MBA from Wharton Business School.

Summary:

Pakistan is the 5th largest motorcycle market in the world after China, India, Indonesia and Vietnam. With 7,500 new motorcycles being sold everyday, Pakistan is also the among the world's fastest growing two-wheeler markets.  Passenger car and motorcycles sales in Pakistan are both soaring at rates of over 20% a year.  Pakistan has managed to significantly reduce poverty and rapidly grow its middle class since 2001. The country now boasts the world's third fastest growing economy among the world's top 25 economies with PPP GDP of over one trillion US dollars, according to the International Monetary Fund (IMF). IMF has recently raised the country's 2018 growth forecast to 5.6%. spite of major political, security and economic challenges. The foundation for the rise of the middle class was laid on President Musharraf's watch by his government's decisions to invest in education and infrastructure projects that led to the expansion of both human and financial capital. My hope is that the continued improvement in security situation and implementation of China-Pakistan Economic Corridor (CPEC) related projects will bring in higher long-term investments and accelerate Pakistan's progress toward prosperity for all of its citizens.

Related Links:

Haq's Musings

Credit Suisse Wealth Report 2016

Pakistan's Trillion Dollar Economy Among World's Fastest Growing

Pakistan: A Majority Middle Class Country

Karachi School of Business and Leadership

State Bank: Pakistan's Actual GDP Higher Than Officially Reported

College Enrollment in Pakistan

Musharraf Accelerated Development of Pakistan's Human and Financial Capital

China-Pakistan Economic Corridor

21 comments:

Abdullah N. said...

Just to add to the fact. Only in Sialkot the 3000 Units of Honda CD125 2018 model has been sold in last 2 and half months (since its launch).
A source from exise department told. (Registered bikes)

Monis R. said...

Great data! Good job pulling this together Riaz Haq.

Hakikat said...

In comparison, BD has 300K passenger cars in total, and 1.6m motorcycles in total. However, BD's per capita GDP is higher than that of Pak!!!!! Even Mujib/Indira/RAW couldn't beat these folks in "lies and deception".....

https://www.brta.gov.bd/images/statistics-bd-sept-16.pdf

Riaz Haq said...

Hakikat: " In comparison, BD has 300K passenger cars in total, and 1.6m motorcycles in total. "

According to Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida), the total number of registered private cars in the country was 3.5 lakh as of March this year.

The size of the car market now stands between Tk 4,000 crore and Tk 5,000 crore with a growth rate of 15-20 percent annually. Barvida data shows 15,000 private cars are imported on an average per year.

This growth was driven by the growing middle class. Boston Consulting Group in a research showed that two million Bangladeshis join the ranks of middle and affluent class every year.

Per capita income rose to $1,602 in the last fiscal year, up from less than $500 a decade ago, according to the Bangladesh Bureau of Statistics (BBS).

Growing urbanites and middle class have been creating new demand for auto loans.

Auto loan portfolio of over three dozen private commercial banks grew at an average of 44.25 percent in the last three years, according to Bangladesh Bank data.

Mohammed Nurul Amin, managing director of Meghna Bank, also attributed the growth to falling lending rates.

Banks are currently lending auto loan at 11 to 12 percent while the rate was above 16 percent two years ago, he said.

Currently, the average interest rate of other consumer loans is 13 percent, according to the central bank.

Moreover, the cars are mortgaged for which banks are more inclined to giving out loans.

Habibullah Don, president of Barvida, said the demand for cars has been growing due to a lack of quality public transports.

“Middle class people are compelled to buy cars as they cannot use the shabby public vehicles,” said Don.

Bangladesh Bank's ceiling on the auto loan at 50 percent of the total value is a barrier to the growth of car sales, he said. Five years ago, up to 70 percent of the value could be availed from loans.

Toyota leads the reconditioned private car market with 88.5 percent share, according to the Mutual Trust Bank report. The second, third and fourth positions are occupied by three other Japanese automotive manufactures -- Nissan, Honda and Mitsubishi.

Toyota is the highest selling brand with two price groups in the market. Axio Sedan and Axio Fielder are in lower price categories selling between Tk 17.5 lakh and Tk 19.5 lakh.

Allion and Premio are the higher price categories selling between Tk 24 lakh and 28 lakh, according to the report.

http://www.thedailystar.net/business/car-sales-speed-1429624

Riaz Haq said...

Pakistan sales drive continues in second half of 2017
Written by Global Cement staff
08 January 2018

http://www.globalcement.com/news/item/6938-pakistan-sales-drive-continues-in-second-half-of-2017

Pakistan: Cement sales rose by 12% year-on-year to 22.2Mt in the last six months of 2017 from 19.8Mt in the same period in 2016. Data from the All Pakistan Cement Manufacturers' Association (APCMA) shows that domestic consumption rose by 17.4 % to 19.8Mt from 16.9Mt, according to the Express Tribune newspaper. However, exports continued to decline in the period by 17.3% to 2.9Mt from 2.4Mt. Exports fell in most parts of the country, particularly in the south, despite increases from plants in Punjab and Khyber-Pakhtunkhwa. The APCMA has blamed this on high industry costs, foreign imports and local legislation.

Riaz Haq said...

THE EXPRESS TRIBUNE > BUSINESS
Consumer confidence in Pakistan at all-time high

https://tribune.com.pk/story/1609611/2-consumer-confidence-pakistan-time-high/

Pakistan’s consumer confidence has reached an all-time high of 111, up by nine points in the third quarter (July-September) of 2017, from 102 points in the previous quarter (April-June), according to the Nielsen Global Survey of consumer confidence and spending intentions.

“The nine-point increase in Pakistan’s consumer confidence score depicts an improving outlook for the country,” Nielsen Pakistan Managing Director Quratulain Ibrahim was quoted as saying in the press release.

“Since Nielsen launched the survey, this has been the highest number reached to date, which can be attributed to several reasons such as the growth in the agricultural sector, controlled inflation, strengthened power supply and most importantly, the uplift in the job market. Pakistan is flourishing and is rated as one of the top growth markets in the Middle East & Africa region.” The survey data highlights a positive perception of job outlook, increasing from 47% in the second quarter to 57% in the third.

Although there has been a one percentage point dip in job security being the biggest concern over the next six months, it still remains the top concern amongst 21% of Pakistani consumers. Consumers are spending more on vacations and technology in third quarter, suggesting that they have more disposable cash.

Regionally, there has been a one-point increase in the index level. Africa / Middle East has also witnessed a one percentage point increase in the job prospects (38%), with no change in the state of respondent’s personal finances. Spending intentions increased one percentage point to 34%.

Four out of six Africa / Middle East markets showed consumer confidence gains. Pakistan’s consumer confidence rose the most, by nine points (which stands at 111). United Arab Emirates (112), South Africa (83) and Egypt (81) were amongst the other countries showing an increase in consumer confidence index.

Consumer Confidence Index sees a 5.07% increase

Conversely, consumer confidence fell in Morocco (72) and Saudi Arabia (93), declining by five points in both countries.

Established in 2005, the Nielsen Consumer Confidence Index is fielded quarterly in 63 countries to measure the perceptions of local job prospects, personal finances, immediate spending intentions and related economic issues of real consumers around the world. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.

Sen said...

Before posting crap, please do some research
Cars prices have been raised artificially (Taxes) in BD because they have high population density and donot have road infra to support more cars

Honda City Starting Price in India : INR 9L = $13700
Honda City Starting Price in Pak : PKR 16L = $14400
Honda City Starting Price in BD : TK 31L = $37400

SO they have lessers cars in road because cars in BD cost 2.5 times compared to Pak

Riaz Haq said...

#Pakistan keeps #terrorists on the run and #economy on a roll
Businesses' focus shifts from bombs and kidnappings to taxes and policy. #Taliban #TTP #terrorism #India #Karachi #Rangers

https://asia.nikkei.com/Politics-Economy/Economy/Pakistan-keeps-terrorists-on-the-run-and-economy-on-a-roll

KARACHI -- Terrorism, corruption, misrule: Negative perceptions have dogged Pakistan for years. But thanks to sweeping operations by the army and a powerful paramilitary force, those perceptions may be becoming outdated, and businesses are taking notice.

In Karachi, the country's largest city, motorcycles and elaborately decorated buses weave down dusty roads between colonial-era buildings. Less than a decade ago, these were truly mean streets. "Between 2010 and 2012, we saw one or two terrorist attacks every month and one or two targeted killings and kidnappings for ransom every day," recalled Army Maj. Gen. Mohammad Saeed. "There were 17 no-go areas which the police could not touch in Karachi."

At the time, even major hotels had occupancy rates of just 10% to 15%. Hundreds of shops and other businesses closed down.

Then the Rangers began to clean up.

The Pakistan Rangers, a paramilitary law enforcement organization overseen by the military and the Interior Ministry, set out to tackle the violence head-on. In 2013, the Rangers Sindh -- which operate in Sindh Province, including Karachi -- mobilized 15,000 troops. The provincial legislature granted them broad powers to search homes and make arrests, enabling them to quickly turn the tide.

In 2017, there were zero bombings and only five kidnappings, according to Saeed, who serves as director general of the Rangers Sindh. This is no small feat in a city with a swelling population of 17 million -- perhaps even 20 million if migrants from rural areas are factored in. "We destroyed all of the terrorists' pockets," he said, adding that hotel occupancy rates are over 90%.

The story is similar in Pakistan's other major cities. And as the Rangers have made headway, business sentiment has improved and growth has picked up.

Pakistan's real gross domestic product grew 5.3% in the fiscal year through June 2017, the quickest pace in 10 years. The central bank projects the growth rate for this fiscal year will approach 6%. Inflation has stabilized and exports are brisk.

"Unfortunately, Pakistan is a victim of negative perception," said Arif Habib, who heads the conglomerate Arif Habib Group. "There is a lot of difference between perception and reality."

But the rest of the world seems to be catching on to the positive changes, too: Foreign direct investment is estimated to reach a record $5 billion or so in the current fiscal year, up from $3.43 billion last year.

Last June, in a survey by the Overseas Investors Chamber of Commerce & Industry, 89% of respondents said security concerns in Karachi had receded since 2013.

The OICCI is made up of 193 companies, mainly major foreign businesses in Pakistan. Each year, it surveys the members about factors that are hampering investment in Pakistan. "The top answer in 2015 was 'security, law and order,' but it fell to third place in 2017," said OICCI Secretary-General Abdul Aleem, who served as the chief executive of a state-run company. "It was overtaken by 'tax burden' and 'policy implementation.'"

Riaz Haq said...

SBP: #Pakistan #economy maintaining growth momentum despite external headwinds. Large Scale #Manufacturing (#LSM) soars 10% in Q1 FY18

https://dailytimes.com.pk/184644/economy-maintaining-growth-momentum-despite-external-headwinds-sbp/

KARACHI: The State Bank of Pakistan (SBP) Friday said the preliminary data on key macroeconomic indicators suggest that growth momentum remained in the first quarter of the current fiscal year.

The Central Bank mentioned in its first quarterly report for FY18 that several coincident indicators point to a further strengthening of aggregate supply and demand in the economy.

According to the report, with the exception of cotton, other major kharif crops achieved or surpassed the FY18 targets. This improvement is supported by sufficient water availability, healthy fertilizer off take and an encouraging increase in agricultural credit disbursements. The large-scale manufacturing also experienced a 10 percent high growth during Q1-FY18 – the highest quarterly growth since FY09.

The performance was encouraging as all sectors, barring fertilizer, contributed positively. This broad based\ growth can be attributed to better energy availability, improved security situation, and rising consumer demand on the back of higher purchasing power and access to affordable credit facilities. The healthy performance of commodity producing sectors had a positive impact on the services sector as well, it added.

The Report highlighted that timely policy support, favorable cyclical movements, low and stable inflation along with growing confidence triggered an uptick in the private sector credit. In particular, the fixed investment loans expanded for the twelfth consecutive quarter in Q1-FY18.

The Report also observed the noteworthy rebound in FBR revenues on the back of increased economic activity. New infrastructure projects, surge in imports, higher consumption of consumer durables, and increased prices and consumption of POL products significantly contributed to both direct and indirect taxes. Notwithstanding this performance, the Report emphasized on the need for more concerted efforts aimed at expanding the tax base.

It also highlighted that the recent significant gains in export growth and foreign direct investment are welcome developments. However, these gains were not enough to contain the overall balance of payments deficit. On the back of an expanding economy, import payments far exceeded the aforementioned positives and the external sector remained under pressure. The widening of current account deficit along with an increase in economic activity is a recurring phenomenon for Pakistan, and one that has the tendency of disrupting growth cycles. There is, hence, an urgent need to find innovative policy mixes, avenues for raising foreign exchange earnings, and realigning policies favoring export growth.

In brief, the first quarter developments show that Pakistan’s economy is well poised to continue on its growth momentum for FY18. However, in order to maintain this virtuous equilibrium of high growth and low inflation in the medium- and long-term, the Report underlines the need to address long-standing structural reforms in the fiscal and external sectors.

Riaz Haq said...

Imports of used cars in Pakistan jump 70pc

https://www.dawn.com/news/1385303/imports-of-used-cars-in-pakistan-jump-70pc

KARACHI: Imports of used cars and minivans surged to 65,723 units in 2017, up almost 70 per cent from 38,676 units a year ago, latest data released by the auto industry shows.

The arrival of sport utility vehicles (SUVs) also increased 59pc to 7,758 units. Imports of pickups and vans registered a 9pc rise to 3,154 units.

The local industry maintains a record of each imported vehicle, whether new or old, through the Import General Manifest (IGM). Every imported car is logged in the customs’ IGM.

Toyota Vitz was most popular foreign vehicle in 2017

Toyota Vitz remained the most popular imported car in 2017. As many as 8,680 units arrived in 2017, up almost 40pc from a year ago. The volume of Daihatsu Mira swelled 73.1pc to 6,091 units.

Toyota Aqua imports climbed 96pc to 7,123 units from 3,622 units in 2016.

As many as 5,088 units of Suzuki Every were brought into Pakistan in 2017, up 14.6pc year-on-year. Imports of Daihatsu Hijet rose 34.5pc to 3,367 units.

The arrival of Suzuki Alto doubled to 4,158 units from 2,013 units a year ago. Suzuki WagonR imports surged 115pc to 3,574 units.

Imports of Honda Vezel and Toyota Land Cruiser stood 2,431 units and 3,301 units in 2017, up 57.5pc and 55.7pc, respectively, on an annual basis.

The overall volume of imported used vehicles grew 65pc to 76,635 units in 2017 from 46,500 units a year ago, data showed.

Low interest rates, increase in auto financing by banks and lifting of vehicles by investors for cab services like Careem and Uber boosted the imports of used cars as well as sales of locally assembled vehicles.

The government imposed regulatory duties on the purchase of foreign used vehicles in October, which largely failed to dent the overall annual import figures.

Sales of locally produced cars rose 20.4pc on a year-on-year basis to 103,432 units in July-December.

According to the Pakistan Bureau of Statistics, overall imports of cars increased 64pc to $276 million in July-December.

Pakistan Association of Automotive Parts and Accessories Manufacturers’ former chairman Aamir Allawala said the local vending industry lost estimated revenue of Rs23 billion last year.

The estimate is based on taking the average local content per vehicle of Rs300,000 on imports of 76,645 units in 2017. This is in contrast to a loss of Rs14bn in 2016 with imports of 46,500 vehicles.

He said imports of used cars were the biggest impediment to investment by existing assemblers, new entrants and part makers.

He said the government has modified the procedure for the payment of duties and taxes to curb imports of used vehicles.

“Time has come for the existing players to make prompt investment in capacity expansion, improve localisation, introduce new models and reduce delivery time to eliminate the menace of premium,” he said, adding that an increase in production will boost tax revenue and create jobs.

In the near future, Hyundai, Kia and Renault will set up plants in the country.

Riaz Haq said...

THE EXPRESS TRIBUNE > BUSINESS
Memon inaugurates Aisha Steel Mills’ expansion project
By Our CorrespondentPublished: December 31, 2017

https://tribune.com.pk/story/1597176/2-memon-inaugurates-aisha-steel-mills-expansion-project/

Sindh Board of Investment (SBI) Chairperson Naheed Memon presided over a ribbon-cutting ceremony on Saturday to mark the beginning of construction on Aisha Steel Mills’ (ASM) expansion plans.

ASM, an Arif Habib Group company, has laid out plans to expand its capacity to a total of 700,000 tons per annum from its current capacity of 220,000 tons.

Addressing the ceremony, Memon said, “Initiation of expansion of Aisha Steel Mills reflects the confidence investors have in Sindh and Pakistan, strengthening our resolve to continue on this path of progress. “We are seeing expansion and new projects in almost all areas of manufacturing in Sindh,” the chairperson added, in a statement released by Arif Habib Corp.

She said that the board is committed to facilitate industrial investment in Sindh, which has the best infrastructure for setting up industries.

Also speaking on the occasion, ASM CEO Dr Munir said, “Our product mix, subsequent to the completion of expansion, will include 450,000 tons of Cold Rolled Coils (CRC) and 250,000 tons galvanised coils.”

He said, “The project is progressing on schedule and we are targeting phase-wise production to commence from the second quarter of the next financial year.”

On completion of expansion, ASM is expected to contribute over Rs10 billion to the revenues of the government.

Riaz Haq said...

#Mercedes-Benz trucks now to be Made-in-#Pakistan: Daimler AG and NLC sign MoU https://www.financialexpress.com/auto/car-news/mercedes-benz-trucks-now-to-be-made-in-pakistan-daimler-ag-and-nlc-sign-mou/1158008/ … via @FinancialXpress

Pakistan's National Logistics Cell has signed a MoU with Daimler AG to assemble Mercedes-Benz Trucks in the country. With the upcoming China-Pakistan Economic Corridor (CPEC) and a new network that links Pakistan's seaports in Gwadar and Karachi with Northern Pakistan, this new plant will boost Commercial Vehicle sales in Pakistan.

German Automaker, Daimler AG has signed a memorandum of understanding (MoU) with The National Logistics Cell (NLC), Pakistan to set up a manufacturing unit of Mercedes‐Benz trucks in Pakistan. In a statement released by NLC, the company confirms that Daimler AG will locally assemble Mercedes-Benz Trucks in Pakistan and marks a major shift in the logistics and transportation industry’s preference towards European manufacturers.

News report further confirms that Major General Mushtaq Faisal, the director general, and Zia Ahmed, Chief Executive Officer of Pak NLC Motors signed the MoU on behalf of NLC. On behalf of Mercedes-Benz Trucks, Klaus Fischinger, head of the executive committee, and Dr Ralf Forcher, head of sales, were present to sign the MoU.

Major General Faisal further said that this is a historic moment for Pakistan’s commercial vehicle industry. A report on Tribune further quotes him saying “The local assembly of Mercedes‐Benz trucks would prove as a strategic opportunity that would leverage the modernisation of Pakistan’s logistics industry,” said the official. Pakistan government has promised to give more incentives in its Auto Development Policy 2016-21 and these locally-assembled Mercedes-Benz trucks would be sold at competitive prices.

This is also a huge move for Pakistan with the China-Pakistan Economic Corridor (CPEC) coming up, Daimler seems to have invested at the right time to make the most of Pakistan's logistics movement to China.

In an IANS report, Dr Ralf Forcher, head of sales at Mercedes‐Benz Special Trucks was quoted saying "Pakistan’s infrastructure and construction sectors have registered significant growth in recent years, giving a boost to the logistics industry that, in turn, means increased demand for commercial vehicles."

The demand for Commercial vehicles in Pakistan is set to go up with CPEC and a new network that links Pakistan's seaports in Gwadar and Karachi with Northern Pakistan.

Riaz Haq said...

#car prices rise about 10% in #Pakistan with currency devaluation of 17% against #Japanese yen. Nearly 40% of the content is still of imported value. #automobile #Manufacturing

https://www.brecorder.com/2018/07/10/427589/third-times-the-charm/

Cars are getting pricier again. For the third time since December when the currency first started to take its downward spiral, local automakers have raised prices. Whereas Suzuki raised prices by as much as Rs30,000, Toyota raised prices between Rs50,000 to Rs1.9 million for some of its imported vehicles. Honda, on the other hand, raised prices by up to Rs100,000. The Rupee to US Dollar depreciation continued well into July – falling by nearly 15 percent since December. Against the Japanese Yen, the Rupee fell by 17 percent during this period.

The price-hikes have been associated to high costs of manufacturing – not only rising costs for Completely Knocked Down (CKD) kits; but also locally-manufactured auto parts. According to data reported by Pakistan Bureau of Statistics (PBS), cost of CKD imports for motorcars went up by 21 percent between July-May 2018 whereas sales during the period rose by 16 percent.

Existing OEMs and auto-part makers are still dependent on imported CKD kits, functional parts, and commodities like iron, steel, aluminum, plastic etc. which are mostly imported. In an interview with BR Research, the Chairman of PAAPAM, Iftikhar Ahmed shared his estimates for localization in the cars segment, putting Suzuki’s at more than 70 percent, Toyota more than 55 and Honda around 51 percent. On average, he believes localization should be around 60-61 percent for all the three OEMs.

This means, nearly 40 percent of the content is still of imported value.

BR Research’s own calculations suggest localization levels during FY17 for an average car manufactured in the country may be 51 percent – (read “The Fault in our Cars”, published Feb 6, 2018) – whereas share of imported content in car prices would be around 22 percent. The rest is sales tax and customs duties. If imports become expensive, tax collected is also higher. Moreover, for cars with strong demand like Wagon-R or the more sophisticated SUVs or cross-over SUVs like Toyota Fortuner or Honda BR-V, localization is not a lot. This means, OEMs have no choice but to raise prices to keep their margins intact.

--------

https://www.brecorder.com/2018/02/06/397319/the-fault-in-our-cars/

The sector has had three major Japanese car makers, who started off by producing 33,000 units back in 1996, growing to the peak of 176,000 units in 2007, and since laid low. Now the volumes are hitting 200,000 cars and are expected to go up with the culmination of the new auto policy with at least three more players entering the field (Read “The Year of Cars”, Jan 29, 2018).

There is no doubt that the three Original Equipment Manufacturers (OEMs) have invested in Pakistan. Recently, Indus Motors expanded capacity worth Rs4 billion. Honda invested Rs240million to expand its press and paint shops. The sector provides direct and indirect jobs to over 2 million people.

There is a large parts manufacturing industry that runs parallel to the primary industry. Technology transfer has also happened with the support of carmakers. Vendors have signed technical agreements with prominent counterparts abroad to increase capabilities. Indus Motors Chief, Ali Jamali told BR Research that Toyota in Pakistan buys 126 million parts from local vendors every day. Seems like a huge number! But let’s consider another huge number.

Import bill for Completely Knocked Down (CKD) kits has grown from $268 million in FY09 to $673 million in FY17, according to data retrieved from Pakistan Bureau of Statistics (PBS). That’s more than Completely Built Unit (CBU) imports. This means, the imported content to manufacture one unit of car, on average, has remained between $3,000 to $4,000 through the years. With such a huge import burden for manufacturing, have we truly substituted imports?

Riaz Haq said...

#Pakistan to increase #automobile production to 8 million units per year to meet growing demand. Representatives of over 50 renowned automobile companies from different parts of China attended the seminar addressed by Pak envoy in #Beijing. #manufacturing https://dailytimes.com.pk/831684/pakistan-to-enhance-auto-production-to-8m-units-per-year/

“It is a bit ambitious target but it is possible to achieve this target due to the yearly growth in production as well as interest showed by different automobile companies from across the world especially from China which plans to invest in Pakistan,” he said while addressing Pakistan Automobile Industry Roundtable Seminar held at Pakistan Embassy, Beijing.

While addressing the participants, the ambassador said that a number of the Chinese companies are already in Pakistan in automobile manufacturing sector while up to 10 new companies have shown interest to invest in Pakistan and are in the process of having joint ventures with their local partners in the private sector. He informed that the government is formulating a new and very attractive automobile sector policy which will be announced soon, adding, more incentives and concessions in taxes are likely to be offered in the new policy.

Ambassador Haque said that automobile companies including manufacturers of energy vehicles from China will be invited to set up their plants both in the Greenfield and Brownfield sectors.

Giving details about the automobile sector in Pakistan, he said that the automobile is the fastest growing sector in Pakistan because of the large demand in view of the population which is close to 220 million people. In the past, the Japanese manufacturers had set up their production units but in recent times the Chinese automobile companies also started looking at the opportunities available in Pakistan.

Riaz Haq said...

Pakistani Motorcycles Market burnt out. In the third quarter sales have been flat from the previous year. Consequently, Year to Date September sales were 1.4 million, up 37.5% vs the 2020 and 13.0% vs the 2019, running towards the second all-time level, just below the 2018 record.

https://www.motorcyclesdata.com/2021/10/25/pakistan-motorcycles/

Motorcycles Market 2021 Trend
Pakistani two wheeler market is accelerating and recovering fast, following the lost reported in the 2020, when prolonged shutdown and lockdowns blocked the production and the commercial activities for a while.

This year the demand is back very fast and we can expect the market to be back on the pre covid track, when it was one of the fastest growing worldwide.

Sales speed up in the first half of this calendar year, when two and three wheeler sales have been 951.093, up a huge 66.8% vs the 2020 and +9.0% vs the 2019, hitting the new record as highest semester ever.

In the third quarter sales have been flat from the previous year. Consequently, Year to Date September sales were 1.4 million, up 37.5% vs the 2020 and 13.0% vs the 2019, running towards the second all-time level, just below the 2018 record.

The competitive arena is dominated by Honda with sales up 52.2%. It is followed by United Auto (+10.7%) and Road Prince (+6.0%), the best local brands.

Pakistani Market Heritage
Before 2004, nobody could have ever thought that Pakistan motorcycle industry would flourish at such an exorbitant scale. In those years the market volume was below 0.1 million annual units and two companies only (Atlas Honda and Dawood Yamaha) were operating in the market. Suzuki and Qingqi held minor shares.

Thanks to government open policy, new manufacturers entered the market backed by Chinese technology and the sector become crucial in sustaining Pakistan economic development. In the last 15 years, it has become the preferred solution for individual mobility.

The following factors played a vital role in this development:

Cheap but reliable technology from China.
Independent sourcing of engines technology from China and body parts from local vendors.
Assemblers of Japanese brands had to pay a big amount as royalty to their principals, while new assemblers are sourcing everything independently. It has reduced bike cost.
Overhead expenses are small as most of the companies operate in limited areas.
Financing/leasing facility is available at local level. This facilitated lower-income people to buy a bike despite limited resources.
In recent years, Pakistani motorcycles industry has been among the fastest in the World. Indeed, the milestone of 1 million units has been hit for the first time only in 2015 and now the market is already running towards the 2 million annual sales. Following the over 1.4 million sales achieved in 2017, the market further boomed in 2018, with a record of 1.9 million sales. up 6.6%, and scoring the All Time Record.

However, rupee depreciation together with tax increase and less cash available for credit, penalized the market since the end of 2018. Motorcycles’ price further increase, discouraging the demand and the market has taken a negative path.

Riaz Haq said...

Pakistan becomes the fourth largest bike manufacturer country in the world

https://www.edgedandtaken.com/pakistan-becomes-the-fourth-largest-bike-manufacturer-country-in-the-world/

Prime Minister Imran Khan met yesterday with prominent industrialists and businessmen in Islamabad. During the meeting, the Prime Minister Imran Khan stated that Pakistan has become the fourth largest producer of bike in the world. Discussing the automotive sector, Imran Khan said tractor exports increased by 10% while the country produced 90% of its parts.

This is not the first time the Prime Minister has cited the bike industry and its apparent success. Last year, the Prime Minister stated that in the fiscal year 2020-2021, Pakistan recorded the largest number of motorcycle sales in the history of the country. He said record motorcycle sales show that the country’s low-income class is making progress. Given that motorcycles are known as the journey of an ordinary person, “aam admi ki sawari”, the Prime Minister Imran Khan says that the increase in motorcycle sales means the strengthening of “aam admi”.

Meanwhile, prices as well as bikes sales speak differently. During 2021, motorcycle companies gradually increased prices. According to our research, Honda has increased the rates by 7 times, Yamaha 5 times, while Suzuki has revised its rates 4 times.

The figures show that the price of the most famous Honda CD70 has risen by Rs. 14,800 last year, while the Honda CG 125 saw a total increase of Rs. 21 000. Meanwhile, Yamaha’s well-known YBR bikes have noticed a price increase of Rs. 30,500 during 2021.

And Suzuki motorcycle prices have risen to Rs. 25,000 last year. It shows how much prices have risen. Surprisingly, despite this repeated increase in prices, sales figures in 2021 continued to show upward trajectories, leading the country into a massive motorcycle manufacturer in the world.

According to the data, sales of Honda, Yamaha and Suzuki motorcycles increased in the period July-November 2021, as well as from month to month. The PAMA report showed that Atlas Honda Limited broke its sales record. In November, the company sold its highest number of bikes at 128,503 units, beating its October sales record when 125,031 bikes were sold.

Honda sales, meanwhile, rose to 563,575 units in July-November from 512,010 in the same period last year. Other Japanese motorcycle companies, Suzuki and Yamaha, also recorded high sales during this 5-month period.

The data showed that Suzuki sold 14,915 bikes in those five months compared to 8,719 in the same period last year. This means that its sales increased by 71%. Meanwhile, Yamaha sales rose to 9,962 units from 8,733 last year, a jump of 14%.

Riaz Haq said...

Bilal I Gilani
@bilalgilani
From just 3 million motorcycles 15 year ago , we now have over 22 million motorcycles

Ppl had disposable income to afford this

Much of these motorcycle are used for rural to urban mobility

Motorcycles r environmentally less harmful than cars ( ideal is public transport)

https://twitter.com/bilalgilani/status/1496406817794056194?s=20&t=EOfusXP1cOjYlIWztngEZA

Riaz Haq said...

Bilal I Gilani
@bilalgilani
Poverty picture based on World Bank data

Don't believe the gloom spreaders

If you have one foot in US , every day you try to justify your exit by dissing Pakistan

Facts belie your gloom story

Long way to go but Pakistan is progressing

https://twitter.com/bilalgilani/status/1496405609096351746?s=20&t=5RWyuRFkBRfeFG_Djqk90Q

(Graph shows poverty declining from 64% in 2001 to 40% in 2008 and 21.9% in 2018

Riaz Haq said...

Bilal I Gilani
@bilalgilani
Pakistan produced 2.4 million motorcycles last year

200k in a month 8000 in a day 1000 every hour

https://twitter.com/bilalgilani/status/1535717946273804299?s=20&t=kWjUCwUx68n1wKxf9W8siw

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Bilal I Gilani
@bilalgilani
In one decade motorcycle on road increases from 5 million to 25 million !

https://twitter.com/bilalgilani/status/1535718216215011328?s=20&t=lRW-xQXmWcEf7sY6zn6ajg

Riaz Haq said...

NFHS-5 report 7 Percent of households in India own a car, Goa first and Bihar last IG News

https://irshadgul.com/nfhs-5-report-7-percent-of-households-in-india-own-a-car-goa-first-and-bihar-last-ig-news/

NFHS-5 report 7 Percent of households in India own a car, Goa first and Bihar last
New Delhi: According to the National Family Health Survey 2019-21 (NFHS-5) report, 7.5% of households in India own a car. This number has increased by 1.5% in the last 4 years. In 2018, the figure was 6%. In terms of states, Goa ranks first, Kerala second and undivided Jammu and Kashmir third. In Goa, 45.2% of households own a car. The figure is 24.2% in Kerala and 23.7% in Jammu and Kashmir.

In Himachal Pradesh 22.1% of households own a car, in Punjab the figure is 21.9% and in Nagaland it is 21.3%. In Sikkim, 20.9% of households own a car. The hill and northeastern states are at the forefront in this regard. 19.3% in Arunachal Pradesh, 17.0% in Manipur, 15.5% in Mizoram, 12.9% in Meghalaya and 8.1% in Assam own a car. In the hill states of Uttarakhand, after Jammu and Kashmir and Himachal, 12.7% of households own a car.

In the national capital Delhi, 19.4% of households own a car. In Haryana, 15.3% of households own a car. In Uttar Pradesh, the largest state in the country in terms of population, only 5.50% of households own a car. The fewest families in Bihar have their own car. Only 2.0 per cent of households in the state own a car. This is followed by the number of Odisha. In Odisha, 2.7% of households own a car.

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India in Pixels by Ashris
@indiainpixels
What percentage of households in India own a car in India? 🚙

https://twitter.com/indiainpixels/status/1525369535741984768?s=20&t=5xI6rnsyJWXg6N1SEexDMQ

Riaz Haq said...

PLSM Pakistan 2019-20


https://www.pbs.gov.pk/sites/default/files//pslm/publications/pslm_district_2019-20/PSLM_2019_20_District_Level.pdf

HOUSEHOLD WITH: U R T
Computer 19 7 12
Internet 48 23 33
Mobile 96 91 93
PERCENTAGE OF THE POPULATION 10 YEARS AND OLDER WITH MOBILE OWNERSHIP
M F T
Pakistan 65 25 45
Urban 71 38 55
Rural 61 17 39
PERCENTAGE OF THE POPULATION 10 YEARS AND OLDER USED INTERNET IN LAST THREE
MONTHS
Pakistan 24 14 19
Urban 37 24 31
Rural 16 7 12
PERCENTAGE OF THE POPULATION 10 YEARS AND OLDER WITH ICT SKILLS
Copy Move 66 57 63
Copy Paste 54 52 53
Send Mail 51 44 48
Spread Sheet 31 20 27
Finding Downloading Software. 33 32 33
Presentation 25 16 21
Transferring Files 35 33 35
Programming 24 15 20
Social Media 46 41 45
Entertainment 60 58 59
Connecting Installing Devices 26 15 22