15 August 2004	Sunday	28 Jamadi-us-Saani 1425

KARACHI, Aug 14: The first month of the current fiscal year started with a good note as production and sales of cars rose by 68 and 80 per cent, respectively, over July 2003.

However, these impressive figures have so far failed to overcome issues like black marketing of newly-assembled cars and late delivery schedules.

The month of July 2004 saw production and sales of cars rising to 9,735 and 10,249 units, respectively, as compared to 5,764 and 5,692 units in July 2003.

A total of 2,038 and 2,073 units of Toyota Corolla were produced and sold last month as compared to 1,666 and 1,506 units in the same period last year. Suzuki Mehran's production and sales touched to 2.721 and 2,803 units, respectively, in July 2004 from 1,544 and 1,621 units. Cultus production and sales stood at 1,243 and 1,377 from 585 and 653 units. Suzuki Baleno production and sales registered at 414 and 441 units as compared to 232 and 233 units.

Honda Civic production and sales recorded at 602 and 612, respectively, as against 441 and 467 units, while City production and sales jacked up to 854 and 839 units from 29 and zero. Alto's production and sales jumped to 976 and 946 from 385 and 381 units. Daihatsu Cuore's production and sales rose to 704 and 717 from 399 and 378 units, while Dewan Santro's production declined to 161 from 455 while sales moved up slightly to 429 from 421 units, figures compiled by the Pakistan Automotive Manufacturers Association say.

Despite achieving tremendous production - issues relating to late deliveries and premiums on new cars still loom large and the government, despite knowing everything, has so far played the role of a silent spectator for the last one-and-a-half years. Prospective buyers still have to wait for three months for delivery of Suzuki cars and six months for Toyota and Honda cars.

There is still a big demand and supply gap, which according to an assembler, will hopefully narrow by June next year. As a huge demand for cars still persists - car assemblers are eying another promising fiscal year of 2004-05 for the industry.

However, the condition of binding assemblers to sell cars to only national tax number (NTN) holders from June 12 has yet to make any negative impact on production and sales.

An assembler said the impact of NTN would be visible in September and October as booking orders for new cars after June 12 will start maturing for delivery. Customers have already been asked to produce NTN numbers as cars will not be delivered without it. Many assemblers are taking booking from only NTN card holders, while some assemblers are taking provisional bookings from the buyers, asking them to show the NTN at the time of delivery.

The decision of duty cut on the import of new cars, which was later marred by the issuance of controversial Customs General Order (CGO), has virtually made imports of new cars unfeasible. Assemblers are happy over the government's move of issuing the CGO, while car dealers are still fighting with the government to revert the decision. Besides, the Trade Policy 2004-05 also remained silent on the issue of used car imports.

The fiscal year 2003-04 also ended with a good note as a total of 98,461 cars were rolled out as compared to 62,073 units in 2002-03. Car production stood at 40,601 in 2001-02. Similarly, sales of these cars touched to 96,674 units in 2003-04 from 61,955 units in 2002-03 and 42,341 units in 2001-02.

The demand in the auto sector has been spurred by low interest rates in financial markets, a persistent flow of home remittances, cheaper and easy availability of car financing and frequent model change induced by furious competition in the car industry, says Economic Survey 2003-04.

BIKES: Production and sales of bikes stood at 29,786 and 30,547 units, respectively, in July 2004 as compared to 19,953 and 19,561 units in July 2003. Production and sales stood at 302,262 and 301,407 units in 2003-04 as compared to 165,105 and 161,863 units in 2002-03 and 120,627 and 120,083 units in 2001-02.

The actual production of bikes must have gone beyond PAMA's figures as a large number of Chinese bike assemblers are not members of the association. The PAMA is dominated by Honda, Yamaha and Suzuki, while two Chinese bike assemblers are also its members.

The PAMA thinks that number of motorcycles produced by non-members in a year is believed to be in the region of 40,000 units.

BUS/TRUCKS: Production and sales of trucks (Hino, Nissan and Dong Feng) plunged to 93 and 116 units, respectively, in July 2004 as compared 141 and 138 units.

Production and sales of buses (Hinopak, Nissan and Dong Feng) surged to 130 and 91 units in July 2004 as compared to 60 and 91 in July 2003 due to rising sales of buses under the Urban Transport Scheme in Punjab and Sindh.

LCVs: Production and sales of LCVs (Potohar, Bolan, Ravi, Hilux and Shehzore) surged to 1,249 and 1,232 units, respectively, in July 2004 from 724 and 649 units in July 2003. Healthy movement of import and export cargoes in the country can be attributed as the main reason of boosting the LCV sales. Some new entrants have arrived in the LCVs production in collaboration with Chinese makers. Being non-members of the PAMA, it is hard to give actual production and sales figures. It thinks that the number of LCVs produced in a year by non-members is less than 500 units.

TRACTORS: Production and sales of tractors (Al-Ghazi Fiat and Millat MF) increased to 3,055 and 2,821, respectively, in July 2004 as against 1,657 and 1,752 units in same month of 2003 because of entry of commercial banks in financing the purchase of tractors. The PAMA said the production of farm tractors by non-members is believed to be in the region of 2,000 units in a year.

According to the Economic Survey, 18 automobile units are involved in the assembling/manufacturing business with the support of downstream industry, comprising 850 units of parts manufacturers.

The composition of auto demand in Pakistan is dominated by motorcycles (60 per cent), and with cars at 22 per cent. Two-wheelers are more popular, accounting 91 per cent of the auto demand.