December 29, 2006	Friday	Zilhaj 07, 1427

KARACHI, Dec 28: Local assemblers of buses have started slashing prices by 15 per cent of locally-produced and CNG buses following issuance of a notification by the CBR regarding zero-rated sales tax on import and local supply of dedicated CNG buses and other buses meant for transportation of 40 or more passengers.Industry people expect increase in their sales which had remained laggard during July-October 2006 as compared to the same period of 2005.

“I think investors will now return after a 15 per cent drop in prices,” Director Marketing and Sales, Hinopak Motors Limited (HML), Mohammad Irfan Shaikh said, adding Rs2.3 million bus chassis is now priced at Rs2.0 million while CNG bus price has also been lowered by 15 per cent.

He said bus sales had only been restricted to government’s institutional buying while the share of commercial sales had been hovering at 15-20 per cent, out of total sales which was alarming for local industry. Bus sales started recovering from November 2006.

Rains all over the country during August-September, killing of Nawab Akbar Bugti on Aug 28, suspension of UTS scheme, investors’ pull-out from purchasing new buses owing to rising operational cost, because of diesel prices and influx of used buses had made a combined effect on bus sales.

A total of 418 buses (Hino, Nissan, Master, Isuzu, Dong Feng) were sold during July-November 2006 as compared to 395 units in the same period of 2005 -- up by 5.8 per cent.

Mr Irfan said that the arrival of 3,000 used buses from Japan and Singapore in 2006 had given a crippling blow to the local sales while the total bus demand of one year is just 800-1,000 units. Suspension of Urban Transport Scheme in Sindh had also slowed down sales of locally-produced buses.

He said the government had been claiming too much about the revival of UTS scheme, but in practical terms it is yet to be seen on roads.

On the other hand, locally-produced CNG buses have also been facing problems as investors have not lifted a single unit yet. Its price ranges between Rs3.8 and Rs4.0m per unit without A/C.

“The operational cost is very high and it can be curtailed, if the government provides subsidy on gas prices,” he said.

Director Marketing and Sales Afzal Motors Private Limited, makers of Daewoo buses, Tahir Javed said the company would reduce prices on Friday. A bus chassis of Rs2.7 million will now cost Rs2.35 million, he added.

However, he said there is hardly any benefit for CNG buses (either locally produced or imported in CBU) because of higher prices. He added higher cost is shying away new investors in taking risk in CNG buses. Even imported CNG bus is priced at a minimum of Rs4.5 million as compared to a complete bus cost of Rs3.5 million for UTS operation.

All heavy vehicle assemblers had pointed out their grievances to Industries Minister Jehangir Tareen on Dec 19 regarding arrival of used buses and non-plying of CNG buses on roads. The minister is expected to meet the assemblers on Jan 10 again to review the issue.