Assignment

Automotive industry in Pakistan

Submitted by:
Irfan abid
Roll No:
MBBE-20-48
Submitted to:
Ma’am Shumaila

BZU Multan
Contents
History and introduction .............................................................................................................. 2
Automobile companies in Pakistan .............................................................................................. 2
Local manufacturers ................................................................................................................. 2
Foreign assemblers & joint-ventures ....................................................................................... 2
Former brands .......................................................................................................................... 3
Top players in industry ................................................................................................................ 3
Pak suzuki motor company limited.......................................................................................... 4
Indus Motor Company Limited ............................................................................................... 4
Honda Atlas Cars Limited........................................................................................................ 4
Ghandhara Nissan Limited....................................................................................................... 5
Hinopak .................................................................................................................................... 5
Supply chain design for industry ................................................................................................. 5
Supply chain challenges in the automotive industry ................................................................... 6
Analytic solution to help meet challenge ..................................................................................... 7

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History and introduction
Pakistan the history can be divided into several periods. The periods are 1947 until the
assembly of trucks (the Bedford “Rocket”) started. The next growth phase is from 1972 until
the private sector was introduced. The third phase saw the introduction of tractor
manufacturing and when motor cycles began to be assembled. The fourth is when the private
sector automobile assembly plants were established and the vendor industry began to make its
presence felt. The latest phase is when exports have begun.
Pakistan’s Automobile industry contributes (2.8%) to its GDP and 30 billion rupees to the
national exchequer in terms of taxes and duties.
Pakistan is home to the world’s sixth largest population with a growing middle class. There are
approximately 17 million middle class households and 102 million middle class individuals as
of 2018.
Pakistan’s automobile industry is fastest growing in Asia. The production and sales have both
grown by 171% and 172.5% respectively between (2014 and 2018), all of which has been
fueled by the Automotive Development Policy introduced in 2016.
On the 18th of March 2016, Economic Coordination Committee (ECC) passed the
"Automotive Development” Policy 2016-21", which offers tax incentives to new automakers to
establish manufacturing plants. In response various car manufacturers have expressed their
interest in entering the market including, but not exclusive to, Renault, Nissan, Kia,
SsangYong, Volkswagen and Hyundai.

Automobile companies in Pakistan

Local manufacturers

• Al-Ghazi Tractors
• Heavy Industries Taxila
• Millat Tractors
• Ravi Motorcycles
• Sazgar
• United Auto Industries
Foreign assemblers & joint-ventures

• Al Haj FAW Motors — (FAW Group)

• Al Haj Proton — (Proton Holdings)

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 • Atlas Honda — (Honda Motorcycles)
• Daewoo Pak — (Daewoo Bus)
• DYL Motorcycles — (Yamaha Motor Company)
• Ghandhara Industries — (Isuzu)
• Ghandhara Nissan — (Dongfeng Motor Corporation, JAC Motors, Renault Trucks)
• Hinopak Motors — (Hino Motors)
• Honda Atlas Cars — (Honda Automobiles)
• Hyundai Nishat Motors — (Hyundai Motor Company)
• Indus Motors Company — (Toyota)
• JW Forland — (Foton Motor)
• Lucky Motor Corporation — (Kia, Peugeot)
• Master Motors — (Changan Automobile, Daimler Fuso)
• MG JW Automobile — (MG Motor)
• Pak Suzuki Motors — (Suzuki)
• Plum Qingqi Motors — (Jinan Qingqi)
• Ravi Motorcycles — (Derbi, Piaggio, Vespa)
• Sazgar — (BAIC Group)
• Yamaha Motor Pakistan — (Yamaha Motor Company)
• Changan motors
Former brands

• Adam Motor Company

• Dewan Farooque Motors
• Nexus Automotive

Top players in industry

The automotive industry is the second largest taxpayer after the oil and petroleum
sector in Pakistan. At present, an average capacity of utilization of vehicle industry is
maintained around 47 percent. It contributes PKR 7.5 billion to the government’s revenue
and $96 million savings at foreign exchange.
Currently, there are three major players in the market, Pak Suzuki, Ltd, Honda
Atlas and Indus Toyota Motors. Pak Suzuki has complete monopoly over the other players

3
in the small car sector It is not facing substantial competition from other players such
as Daihatsu Cuore, produced by Indus Motors in market. The automotive industry in
Pakistan chiefly encompassed of four players. These players are “Pak Suzuki Motor
Company Ltd., Indus Motor Company Ltd., and Honda Atlas Cars Ltd. and Ghandhara
Nissan Ltd”. Amongst these players, the first player contain the keystation in the local
market. Nayadaur Motors is the producer of Kia Hino Pak Motor, National Motor,
Ghandhara Nissan Dieseletc possess the market for Buses and trucks. The tractors
market includes Millat Tractors and Al-Ghazi Tractors. A short description of the five major
competing manufacturers is given below:

Pak suzuki motor company limited

The company is pioneer in traveller car manufacturer in the Pakistan. Pak Suzuki
was established in August 1983 as a result of joint project between Pakistan Automobile
Corporation Limited and Suzuki Motor Corporation. The previous party symbolizes the
presence of Government of Pakistan. The company initiated saleable manufacture in
1984. The company is one of the largest player in the industry with approximately 50
percent market stake and effective control over the small car segment of the market.

Indus Motor Company Limited

Indus motors is a joint project between the house of Habib , Toyota Motor company
and Toyota Tsusho Corporation introduced in December 1989 for the assembling,
advanced engineering and advertising of Toyota automobiles in Pakistan

Honda Atlas Cars Limited

Honda Atlas launched its business in Pakistani market through a joiny venture in
November 1992. The joint venture was between Honda Motor Company and Atlas Group
of Companies. Profitable manufacturing from July 1994

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Ghandhara Nissan Limited

Ghandhara Nissan is recognized as private company in August 1981. Nissan has

also been advertising Nissan Diesel Trucks manufacturing in Pakistan It was transformed
into a public limited company to commence manufacturing of Nissan automobiles in May
1992.

Hinopak

Hinopak was established as a result of joint venture between Futtaim of Dubai and
Pakistan Automobile Corporation (PACO), Hino Motors and Toyota Tsusho located in
Japan. The company had become member of the Toyota and Hino family as Al Futtaim
group given its 59% share to Hino and Toyota in 1998.

Supply chain design for industry

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Supply chain challenges in the automotive industry
The automotive manufacturing industry in Pakistan has a lot of challenges despite
of focusing on their product lines. That is why automotive supply chain is considered as
multifaceted because it’s continuously dependent on Economy of the country and as the
economy fluctuates supply chain is affected too. So industry has to make assured that the
value chain function is properly working and that cash flow is in the right direction within
this vertical. Moreover, companies operating in this sector has to face an additional
pressure of global marketplace as well as the pressure from the local players in the
market.
The Paksitani automotive industry is continuously growing. During such growth
periods, some challenges also arise within the supply chain function of the automobile
manufacturing industries. The companies are required to meet the demand of growing
inventories and stocks as well as to cater the issues that may arise in distribution and
manufacturing when the economy is up:
1. Prompt Supply of spare parts
2. Availability of replaceable products
3. Keeping inventories well-stocked
4. Keep up with increased volumes
Availability of replacement parts for car owners for a long time standardization and
integration of the spare parts logistic operations throughout the entire supply chain
management functions.

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Analytic solution to help meet challenge
Prescriptive and predictive analysics tools and techniques can be helpful to
locate the demand for certain location and for certain brand. This would have an impact
on how suppliers will maintain the inventories and stocks throug global supply chain.
Investment in analytic measures, consequently, can be great option for suppliers to
certify that the accounting management for growth that may occur in the stocks and how to
deal with the emerging changes happening in the fluctuating economy. Automotive
manufacturers prefer to ship vehicle components to be assembled on-site in local
manufacturing plants Instead of shipping whole cars to overseas markets Moreover,
Import duty for “completely knocked down” products are normally considerably
cheaper than the finished products, also the component lodge fewer freight volume,
reducing the transport costs as well. Some parts and components are produced at
company-owned production facilities.