Local automakers gear up for competition

KARACHI: Local assemblers are not ready to reveal the models of cars and light commercial vehicles (LCVs) that they plan to launch in the next two years to compete with new entrants from China, South Korea and Europe.

However, auto vendors said the existing car assemblers have already geared up to introduce new vehicles in 2018 and 2019.

Requesting not to be named, the vendors said Pak Suzuki Motor Company is planning to introduce 660cc Alto in the first quarter of 2019.

They said they have been asking the company to continue assembling the iconic Mehran and let the car die its own death following the launch of 660cc Alto. However, the company has decided to pull the plug on Mehran.

Honda Atlas is considering introducing locally assembled 1,200cc Brio. Topline Securities believes its introduction in 2019 will add more than 3,000 units. A senior executive of Honda Atlas did not respond to the queries sent by this correspondent.

The vendors said Indus Motor is planning to introduce Vios in 2019 in place of Corolla. They said the development of parts for 660cc Alto and Vios has started, adding that the companies have also shared the drawings of parts with them. In addition, the companies have also finalised the cost of auto parts that will be made locally.

Top executives of the auto industry tried to dodge specific questions about the details of their future investment plans and new models.

Pak Suzuki Managing Director Masafumi Harano said, “It would be good if the newcomers build their plants (in the country)”.

When asked to share the strategy that his company has devised to deal with the intense competition expected in the future between new entrants and decades-old existing players, he said that the expression “decades-old existing players” is not acceptable.

“The car industry means the local manufacturing industry, and local manufacturing means it is a complete chain by means of investments, job opportunities and local vending network that we and all other existing original equipment manufacturers did and are continuously doing,” he said.

He added that the newcomers have decided to invest because of the existing players’ long stay in the country and good reputation.

As for the introduction of small-engine power models, he said, “We are ready for the competition. Let the newcomers come and stay”.

“We will do better for our shareholders,” he said.

Mr Harano said the market is expected to grow by 10-15 per cent by 2019-20.

Indus Motor CEO Ali Asghar Jamali said a lot of investment is being injected into the industry, thanks to the entry of reputed brands.

The volume of 500,000 units per annum, projected in the new auto policy, seems quite possible by 2025, he said. “We welcome new players and believe that a ‘Make in Pakistan’ national strategy will benefit our country,” he said.

The overall expansion and growth of the automobile market will offer customers a wider choice of makes and models in cars and LCVs. The focus on localisation and transfer of technology will help save foreign exchange and allow the sale of Pakistani vehicles at competitive prices.

“We are resolved to embrace the competition, which will challenge us but undoubtedly make us better,” he said.

The company has recently invested $40 million in debottlenecking its assembly process, he noted.

As for new models, he said Indus Motor has an ongoing process where it studies and plans new models as well as model changes. In August, the company launched a Corolla minor model change while a full model change for Fortuner was carried out in January.

“We are, as always, looking at the latest products we can bring. When the time is right, we will share our upcoming models with customers,” Mr Jamali said.

He said the company has always focused on localisation to lead industrial growth. “Corolla has already achieved more than 70pc localisation,” he said.

Al Haj Faw Motors Marketing Director Farhan Hafiz said healthy competition will increase awareness among car users. He claimed the company’s current models, V2 (hatchback), XPV (van) and FAW Carrier (one-tonne light commercial truck), are better than other available options in terms of their built quality, fuel efficiency, safety features and specifications. He added that these vehicles offer a better value for money than their counterparts.

“We plan to bring more advanced and environment-friendly vehicles in the near future, proving that Chinese vehicles are as good as any other car in the world,” he said.

Mr Hafiz said FAW cannot ignore the upcoming competition, adding that the company is working on new models that will be launched in the near future. However, these models will not be limited to small-engine power, he added.