巴基斯坦摩托车投资环境简介

CIMA Motor 2009 Chongqing, China Commercial Section Consulate General of Pakistan

Ecnomy Overview of Pakistan Motorcycle Industry in Pakistan Production Factors Cost Logistics Encouraging Policies for Investment in Motorcycle Industry

Ecnomy Overview of Pakistan

Pakistan is a country located in South Asia at a strategic and important location at the cross-roads of South Asia, the Middle East and Central Asia
It has 1,046 km coastline along the Arabian Sea and Gulf of Oman in the South, and is bordered by Afghanistan and Iran in the West, India in the East and China in the far northeast

Pakistan is the sixth most populous country in the world having population of 170 million
The Demographic Profile of Pakistan is such that 54% of population is below 19 years of age, 27% between 20-39 years of age, 13% between 40-59 years of age and 6% are 60 years and above
Thus, Pakistan is relatively a young country with vibrant people

Pakistan is one of the fastest growing economies of the world having touched a record GDP growth rate of 8.4% in 2005
Average growth rate during last four years has been 6.4%
Pakistan has over 170 million consumers with an ever growing middle class
Foreign Direct Investment (FDI) has risen sharply from a mere US$ 300 million in the 1990s to over US$ 5.15 billion in 2007-2008
The leading sectors for FDI are communication, financial businesses, oil and gas exploration, power, trade and real estate and the main sources are China, USA, UK, Netherlands, UAE and others

Pakistan’s GDP (Nominal) has reached to US$ 167 billion in the year 2008 with per capita GDP of US$ 1,044
The components of GDP during 2007-2008 were agriculture sector 21%, manufacturing sector 22% and services sector 57%
Indicate shift in the structure of Pakistan’s economy from mainly agriculture base to manufacturing and services

Following are the important Economic Indicators of Rising
Pakistan for the year 2007-2008:-
5.8% GDP growth
US$ 13 million increase in FDI during 2007-2008 touching total FDI of US$ 5.15 billion
12% increase in exports during 2007-2008 (US$ 19.22 billion)
16.3% increase Net Revenue during 2007-2008(Rs. 763.6 billion)

1.8% increase in Worker’s Remittances during 2007-2008 (US$ 6.5 billion)
1.5% growth in agriculture sector
Forex Reserves at US$ 15.2 billion
4.8% growth in large scale manufacturing sector
9.4% growth in service sector
5.4% growth in manufacturing sector
15.2% growth in construction sector
Stable exchange rate for the last 8 years

The wide-ranging reforms in Pakistan have resulted in a stronger economic outlook and accelerated growth specially in the manufacturing and financial services sectors
According to Doing Business Report 2008 of World Bank, Pakistan was amongst the top ten reformers in the world in 2006
Pakistan ranks 76th globally on the ease of doing business and is the 2nd best performer in South Asia after Maldives
Pakistan scores well on the indicators related to starting a business (59th out of 178) and protecting investors (19th out of 178)
For Chinese investors Pakistan offers best opportunities for investment including motorcycle giants

Motorcycle Industry in Pakistan Market Capacity & Outlook Market Competition Situation

Motorcycle Industry in Pakistan
Market Capacity & Outlook
The motorcycle industry worldwide witnessed tremendous growth in the last few years led by People’s Republic of China
This global surge in demand was also felt in Pakistan where the industry manufactured 877,377 units by end 2008
Pakistan is occupying the 7th position in production of motorcycles globally and its share in global market of motorcycles is 2%
The motorcycle industry of Pakistan is 45 years old when the local Atlas Group started assembling motorcycles in Karachi in 1964
Later on, Yamaha and Suzuki brands were introduced in Pakistan

The market was almost dominated by Japanese brands till 2002
43 Original Equipment Manufacturers (OEMs) operate in the motorcycle industry of Pakistan
These OEMs are supported by nearly 2,000 parts and component manufacturers employing 50,000 employees
Critical mass has been reached in Pakistan’s motorcycle industry and the prices of motorcycles in Pakistan have on the average come down by more than 30% in past 8 years

Since the entry of non-Japanese OEMs in Pakistan’s motorcycle market the production and sale of motorcycles has increased tremendously as depicted in the table below:-
Production/Sale of Motorcycles in Pakistan
Source: Engineering Development Board/PAMA
Year Production/Sale in Units % Growth 2001-2002 120,627 11% 2002-2003 175,169 45% 2003-2004 371,007 112% 2004-2005 570,085 54% 2005-2006 751,669 32% 2006-2007 839,224 11.6% 2007-2008 877,377 4.5%

Prices of motorcycles have come down to the extent of 30% after the introduction of motorcycles made from imported Chinese parts & components
Market is likely to expand further if this declining trend in prices continues
Per capita income in Pakistan since last 8 years is increasing steadily at annual rate of 14% (From 492 US$ in 2001-2002 to 1085 US$ 2008) which is enhancing purchasing power of common man hence more sale of motorcycles in Pakistan
Industry experts in Pakistan are forecasting the demand for new motorcycles in the coming few years to increase to the extent of 1.7 million

Market Competition Situation
Major Motorcycle Enterprises & Locations
Currently there are 43 OEMs operating in Pakistan’s motorcycle industry
These include 3 Japanese OEMs and 40 other OEMs who manufacture motorcycles from mainly Chinese parts and components
The total installed capacity of all the OEMs is approximately 1.7 million units per year

Major Motorcycle Enterprises are as under:-
1) Atlas Honda
2) Dawood Yahmaha
3) Hero
4) Star
5) Pak Hero
6) Pak Suzuki
7) Sohrab
8) Metro
9) Others
Most of the motorcycle assemblers/OEMs are located in and around the cities of Karachi(Karachi, Hyderabad & Hub) and Lahore (Lahore, Gujrat & Gujranwala)

(b) Current Supplying Capability/Market Share(2008)
Atlas Honda 56%
Dawood Yahmaha 9%
Hero 5%
Star 3%
Pak Hero 5%
Pak Suzuki 3%
Sohrab 2%
Metro 1%
Others 16%
Source: Provincial Excise & Taxation Departments of Sindh & Punjab

Despite rapid and significant entry of motorcycles made from parts and components imported from China the market is dominated by Japanese brand motorcycles to the extent of 68%
Besides, there is no Chinese brand as such popularized in Pakistan market of motorcycles
Local brands made from parts and components imported from China are gaining ground
Installed capacity of 1.7 million comprises of 45% units by Japanese origin OEMs and 55% units by Chinese origin OEMs

In both cases, 72% capacity is for 70CC models, 24% for 100CC models and 4% for 125CC models
In terms of sale, the 70CC motorcycle has almost 85% of the market. This is on account of fuel economy and trouble free maintenance
The Japanese brands though bit expensive yet their main strength is superior resale value and stronger after sales and service
Major strength of motorcycles made from parts and components imported from China is price as these are cheaper to the extent of Rs. 15,000 to 20,000 than Japanese brand

(c) Current Foreign Investment :
The current foreign investment in motorcycle industry of Pakistan is negligible
Honda, Yamaha and Suzuki have joint ventures in Pakistan
China is lagging behind with almost no investment in this industry
Chinese motorcycle giant companies need to focus on the immense opportunity of investment in Pakistan’s motorcycle industry specially in new motorbikes driven by rechargeable batteries

Production Factors Cost Land Energy Human Resources

Production Factors Cost
(i) Land:
Availability of land (public or private) for establishment of manufacturing units in Pakistan is easy
According to World Bank – Doing Business Group study/research Pakistan’s ranking in South Asia regarding construction permission and registering of property for starting business is 2nd only, 1st being Maldives
Leasing of land for manufacturing purpose is not only cheaper but easy also
Besides, there are Special Economic Zones in various parts of the country including specific Pakistan -China Economic Zone also. For these Zones following is the policy package:-

Exemption of Custom duties and Taxes strictly on import of capital equipment (plant, machinery, equipment and accessories) for Zone development and projects in the Zone and not for raw materials
Corporate Income Tax holiday for a period of five (5) years for Projects in the Zone from the date of starting commercial operations
The normal incentives for exports as available to projects established any where in the country shall be applicable to exports from the projects in the Zone
Free facilitation service, one window facility and guidance to investors by the Board of Investment

Establishment of Workers Training Centers in the Zone
Dry port facility in the Zone to facilitate imports and exports
Federal Government/agencies to provide gas, electricity and other utilities at the zero point of the Zones
The facility for obtaining foreign private loans by all foreign investors, for financing the cost of imported plant and machinery required for setting up the project
Foreign controlled manufacturing concerns treated at par with other local companies for obtaining financial facilities for their working capital requirements
Foreign controller companies are allowed domestic borrowing to meet their working capital requirements

(ii) Energy
At present Pakistan is facing shortage of electricity
By the end of December, 2009 this problem would be completely resolved as work on power plants including hydro-electric power generation is going on with full speed
This would ensure getting electricity connections quickly, reliable supply with no frequent outages and supply of electricity on cheaper rates
There is no problem as far as supply of gas is concerned. Supply of POL products is also available uninterrupted

(ii) Human Resources:
Pakistan is low wage, labour surplus economy
Wages are low by international standards and they are almost equal as compared to prevalent wages in India and Bangladesh and even China
Skill level of Pakistan’s workers is adequate and availability is ensured
Productivity of Pakistan labour is as good as that of regional countries
Pakistan’s human development, basic education and worker skills indicators are tremendously good

Logistics

Logistics
A developed infrastructure is vital to the economic progress of country
The substantial investment in the development of physical infrastructure of Pakistan gives it a competitive edge and plays a key role in transforming the country into trade, economic and energy hub of Asia
The Government of Pakistan has planned 50 mega projects for provision of better quality highways, expressways & motorways throughout the country during the next few years
Some of the planned initiatives include; construction of major new motorways, modernization of trucking fleet with newer, more efficient, and environment friendly vehicles; promotion of industrial clusters along highways/motorways, establishment of warehouses by the private sector along the network

Logistics
(i) Road Transport
Road transport is a backbone of Pakistan’s transport system, accounting for 90 percent of national passenger traffic and 96 percent of freight movement
Over the past ten years, road traffic – both passenger and freight – has grown much faster than the country’s economic growth
North South Trade corridor is a major initiative with approximate cost of US$ 6 billion to reduce transportation time of good from ports to factories and vice-versa

Logistics
(ii) Road Network
10,849 km long National Highway and Motorway network contributes 4.2% of the total road network and carries 90% of Pakistan’s commercial traffic
The Road density of Pakistan is 0.32 km/sq. with the target to double it in the next ten years road network grew at average rate of 3.3%

Logistics
(iii) Railways
Pakistan Railways has shown its good performance since 2000-01 in respect of passenger as well as freight traffic
During the last eight years (2000-2008), Pakistan Railways has been showing an increasing trend in both passenger and freight traffic, registering an average increase of 5.6 percent and 7.9 percent per annum, respectively
A positive growth of 6.7 percent and 7.0 percent has been recorded in passenger traffic and freight traffic respectively during 2007-2008

Logistics
(iv) Airlines
The government has adopted a selective open skies policy with a number of countries on the principle of reciprocity and bilateralism
The progress of the airline sector could be mapped through momentous performance of PIA
Pakistan International Airlines carried a total number of 4.245 million passengers during July 2006 – March 2007 achieving 11.63 million RKRs revenues

Logistics
(v) Ports & Shipping
(a) Karachi Port Trust:
Karachi port handles more than 65% of the entire national trade
Deep natural port provides safe navigation to 75,000 DWT tankers and modern container vessels
In July-March 2006-07, the port handled a cargo volume of 22.4 million tones volumes marking 12.5% increase
Besides, most modern terminal operators like KICT/PICT are operating

Logistics
(b) Port Qasim
High private sector involvement in Container terminals, Commercial terminals and even Oil terminals
23.6 million tones of cargo marking an increase of 10.8% was handled in 2005-2006
In July-March 2006-07, the cargo handled was 19.7 million tones
Besides, new terminal operator QICT is busy in handling cargo

Logistics
(c) Gwadar
Gwadar deep-sea port emerges as a place of great strategic value enabling high-volume cargo
The construction of the port has spurred other major infrastructure projects in the area
The 700 km. Makran Coastal Highway reduced travel time to Karachi from 48 hours to only 7 hours
Other road projects include the Gwadar-Quetta-Chaman road and a road link to the town of Khuzdar in eastern Balochistan
The port will now be in competition with the likes of Chabahar, a port in Iran, as well as Dubai in the United Arab Emirates

Logistics
Here are some of the projects already underway or in place:
-Fiber optic network has reached Gwadar
-Gas supply plant and network partially in place
-20 more bank branches have been opened
-Construction of a degree college and a cultural complex
-East Bay expressway and railway line alignment has been finalized
-Construction of new international airport
-450 + modern houses added in the city
-Construction of theme parks
-32 complimentary plots arrange from private schemes for various health/educational activities.
-Split sewerage system with recycling and disposal in nearby green

Logistics
Selected Major Planned Projects for the Next Five Year
Project Length (KM)
1 Improvement/Widening of KKH (Khunjerab- 335
2 Realignment of KKH(Railkot-Sazin Section) 120
3 Improvement/Widening of KKH(Sazin Manshera Section) 258
4 Manshera-Abbottabad-Hasanabdal Expressway 97
5 Peshawar –Torkhum 51
6 Peshawar Notherrn Bypass 34
7 Underpass at Wah Gate No.1 Taxile-Hasanabdal Section -
8 Wazirabad-Pindi Bhattian Expressway(E-3) 100
9 Hiran Minar Interchange (M-2) with link road -
10 Faisalabad-Khanewal Expressway(E-4) 184
11 Khanewal-Lodhran Expressway 100
12 Lodhran-Sukkur Expressway 385
13 Ratodera-Sehwan(N-55), ACW 200
14 Karachi-Hub-Dureji-Dadu Motorway(M-7) 270
15 Karachi-Hyderabad Motorway(M-9) 136
16 Jand-Kohat National Highway(N-80) 46
17 Noshki-Dalbadin Section(N-40), Balochistan 165
18 Gujranwala-Dina Expressway 100
19 Chakdara-Dir, Kalkatak-Chitral (N-45) 120
20 Bridges over River Indus in Punjab & Sindh -

Encouraging Policies for Investment in Motorcycle Industry

Encouraging Policies for Investment in Motorcycle Industry:
(i) Salient Features of Pakistan’s Investment Policy
Pakistan is having liberal investment policy in general with following salient features:-
Almost all economic sectors are open to foreign investors
Government permission for investment in manufacturing sector is not required except for specified industries such as arms & ammunitions, high explosives radioactive substances , security printing and currency and
Foreign equity upto 100% is allowed.
0-5% customs duty is chargeable on plant, machinery and equipment.
Remittance of capital, profits, royalty, technical and franchise fee are allowed.
There is no sales tax on the import of machinery.

Tax relief: First year allowance or Initial Depreciation Allowance @ 50% of plant, machinery and equipment is allowed for the investors in the manufacturing sector.
No duty, no drawback and DTRE Scheme is in place for export-oriented industries.
Long term finance for export oriented industries is available
Equal treatment of local and foreign investors is hallmark of policy/national treatment principle as defined in WTO is fully guaranteed.
WTO compatible Intellectual Property Rights regime is introduced.
There is strong network of Export Processing Zones/Industrial Estates.
China specific industrial zone is also available.
Foreign Investment is fully protected by following Acts:
Foreign Private Investment (Promotion and Protection) Act, 1976.
Protection of Economic Reforms Act, 1992.
There are Investment Protection agreements with 47 countries and Avoidance of Double Taxation agreements with 52 countries.

(ii) Present Tariff Structure:
The industry in Pakistan operated under the Deletion Policy formulated and implemented by the Ministry of Industries and Production from 1996 till 2005. This deletion/localization/indigenization policy stipulated the mandatory progressive use of a certain percentage of locally manufactured parts & components. The table below shows the deletion/indigenization targets for the various motorcycle models:
Deletion/Localization Targets for Motorcycle OEMs
Source: Engineering Development Board, Pakistan
S.No. Model Deletion/Localization Target June 2001 % June 2002 % June 2003 % June 2004 % June 2005 % 1 Upto 70CC 83.00 85.00 86.50 88.00 90.00 2 B/W 70-100 CC 82.00 83.00 85.00 85.50 86.00 3 B/W 100-175 CC 74.00 81.00 82.00 83.00 84.00

With the signing of the WTO, Pakistan moved from the Deletion Policy to the Tariff Based System (TBS) in July 2005. Under the new system of TBS protection is provided to the local parts and component manufacturing industry through tariff measures. The below table shows tariff rates currently applicable to the motorcycle industry:
Tariff Rates Applicable to the Motorcycle Industry
Source: Federal Board of Revenue
Sr.No. Product Applicable Customs Duty 1. CBU 90.0 % 2. CKD Kit Non Localized Parts 30.0% 3. CKD Localized Parts 50.0%

(iii) Auto Industry Development Plan
Since 2007 Government of Pakistan has initiated a 5 year project known as Auto Industry Development Plan (AIDP)
This envisages an increase in the industry’s annual output
The plan is intended to improve the domestic automotive industry, through the development of local capacity and “auto clusters”
This plan/programme covers all types of automotive vehicles including two wheelers & three wheelers. Since this is a five year plan therefore there is predictability and transparency for the tariff schedules as the change in tariff structure for full five years till 2011 is specified

This programme has been appreciated by the auto industry of Pakistan as a step in the right direction
At the end of five year, if it is found successful, Government of Pakistan may consider to extend it till the achievement of set targets

Thank you! 谢谢！

巴基斯坦摩托车投资环境简介

by Hondafanatics on Aug 16, 2010

Accessibility

Categories

Upload Details

Usage Rights

Statistics

巴基斯坦摩托车投资环境简介 Presentation Transcript