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KARACHI: A major automaker has threatened to shift its investment for a new plant worth $400-500 million to Iran from Pakistan citing dearth of incentives for existing assemblers in the Automotive Development Policy (ADP) 2016-21.
Pak Suzuki Motor Company Limited (PSMCL), which has over 50 per cent market share, informed the government some time back of its plan to make big investments and work on vendor development and new models.
“We may shelve our investment plans in Pakistan besides rolling out new models as the ADP has nothing to offer,” spokesperson for PSMCL Shafiq Ahmed Shaikh said. He claimed the car industry was dissatisfied as the new policy lacked assurance of a level-playing field.
Pak Suzuki has planned an overall investment of $1,000-1,500m in coming years in technology transfer through joint ventures with Japanese auto sector. “It seems the government does not want investment from Japanese assemblers,” he said.
“The government should revisit the policy,” he added.
Sources said Iran has become the most attractive country in terms of investment after lifting of sanctions and many companies including leading car manufacturers of the world are considering setting up their plants in Iran.
To a query whether the introduction of Suzuki Celerio in place of Suzuki Cultus this year is still intact as vendors are already preparing parts and accessories, Shafiq said the company is re evaluating its options.
In the second week of this month, PSMCL announced its fourth quarter 2015 earnings of Rs1.8 billion as against Rs311m in the same quarter of 2014. PSMCL revenue grew by 86pc year-on-year (YoY) to Rs23.5bn in fourth quarter of 2015 as the company sold 36,712 units. The volume increased due to a taxi scheme launched in the 2014-15 budget by the Punjab government. The company also offered a discount to Punjab government due to huge orders.
In 2015 PSMCL earning stood at Rs5.8bn versus Rs1.9bn in 2014. Revenues improved by 58pc YoY. The company sold 133,660 units in 2015, up by 72pc YoY.
Published in Dawn, March 29th, 2016
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Comments (69) Closed
Mar 29, 2016 06:51am
We too are good market. We don't bow down to this types of blackmailing. If they move out,some others will take its place. Pure economics.
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Mar 29, 2016 07:09am
With Iran opening up, Pakistan will feel heat on Direct and Indirect investments, as Iran is comparably cheap and safe.
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Mar 29, 2016 07:32am
Sounds more of blackmailing to me
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Mar 29, 2016 07:47am
Please go away and take ur Mehran and cultus with u.20 year old junk
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Mar 29, 2016 08:00am
I believe in response to this threat, the government should ban Pak Suzuki. You simply DO NOT challenge the state.
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Mar 29, 2016 08:19am
Thank you very much and good bye!
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Mar 29, 2016 08:24am
Now they are blackmailing the govt. Govt should start checking the safety flaws which are in Suzuki Mehran and provide the consumers compensation for use of sub standard body and parts used. Bye bye Pak Suzuki.
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Mar 29, 2016 08:26am
Please go and invest in Iran. We are sick of substandard card manufactured by this company. I hope other manufacturers come to Pakistan and give PakSuzuki a run for the market share.
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Mar 29, 2016 08:33am
You also come in Bangladesh. The Proton & Mitsubishi brand has already invested in Bangladesh.
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Mar 29, 2016 08:39am
They should be asked would they churn out the same models sans any safety standards as Iranians are quite swift acting when it comes to public safety ..
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Mar 29, 2016 08:40am
Get out now.
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Mar 29, 2016 08:42am
Bad luck Pakistan.
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Mar 29, 2016 08:46am
No problem Pakistan can start importing or assembling chinese cars
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Mar 29, 2016 09:14am
Lets not allow them to sell the crap in pakistan any more.we dont need there 3rd class models.
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Mar 29, 2016 09:24am
Poor Iran!
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Mar 29, 2016 09:40am
Been here since 1982, disrespecting Pakistanis by serving hideously obsolete models, and now making threats. Let them leave and ban any imports of Suzuki vehicles in Pakistan.
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Mar 29, 2016 09:43am
Sure, take your unsafe junk cars, made with thinnest sheets of metal elsewhere......
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Mar 29, 2016 09:46am
@fahad 30 years old to be precise
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Mar 29, 2016 09:52am
Please go
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Mar 29, 2016 09:52am
We would be happy to say good bye. All time looked for profiteering and did not care about customer's concern. like safety, quality and features etc.
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Mar 29, 2016 09:54am
The profit margins and acceptance of poor quality they have in Pk is strong enough reason to stay,they won't pull out.They may increase the quality somewhat if real competition comes.Enough of extremely poor value for money by Suzuki for Pakistanis.we pray that their party is over soon.
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Mar 29, 2016 09:58am
@MD SOHAN(BD) if u can get 3 to 5 year old cars at acceptable prices,be content with that.The quality they produced here could not even match their own 5 year older productions in Japan.
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Mar 29, 2016 10:14am
For God sake shift pls so we get rid of substandard cars and best cars from South Korean & European come in Pakistan
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Mar 29, 2016 10:15am
I lived in Iran in 1992. The locally assembled Peugeot from that time is still bigger and better than anything Suzuki has to offer in Pakistan in 2016. Good luck with your venture in Iran. You are going to need it. And good riddance.
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Mar 29, 2016 10:16am
Private investors from Pakistan should buy patent to manufacture Suzuki cars. Improve on them as China has done. I do not think Suzuki should go.
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Mar 29, 2016 10:18am
please go soon and also take your sub standard vehicles with you. Make sure to gift Mehran, Bolan and cultus to iranian leaders so they know what we Pakistanis suffered from.
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Mar 29, 2016 10:26am
Sounds more like a black mailing. I think that the Auto Policy makers would have done a thorough risk assessment before rolling out the policy. If the option of pressure from existing auto makers was covered, then stay steadfast on the policy and let then take the decision as per their best interest. We should stick to our best interest.
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Mar 29, 2016 10:51am
Really surprised to see the angry comments here.In India suzuki in collaboration with Maruti is making some of the finest cars which are value for money and also has the best resale value.But Nissan really spoiled its name by making unsafe cars like Datsun.Looks like these Japanese car makers have different norms for different countries.
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Mar 29, 2016 10:59am
Please go and take your mehran there as the Irani market is a new market and Mehran will sell there in big numbers as Pak suzuki is only capable of making a Mehran,which to me is a little improvised but heavily priced rickshaw
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Mar 29, 2016 11:27am
Well Suzuki will any way go to the Iran we give them option same as for new entry assemblers, Suzuki will eventually move out of Pakistan as it has set focus in India to export its vehicles from there.
By this statement Suzuki clearly wants to say that he is not capable of doing business in open environment.
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Mar 29, 2016 11:36am
Suzuki has been amazing in making...metal boxes with cartwheel tyres. Mehran,Bolan...take your threats somewhere else.
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Mar 29, 2016 12:00pm
Pure posturing. No company world leave billions of profits from an established market to gain a foothold in a new market. Also, I don't think Iranians would grant a second look to the cheap quality cars Suzuki sell to Pakistanis.
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Mar 29, 2016 01:36pm
Please also take ur Mehrans, Cultus, etc to Iran with you.
Sincerley,
Consumer!
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Mar 29, 2016 01:46pm
They have an established market share, are making healthy profits and their business is growing. They are threatening to take business to a new market with many hurdles and uncertainties if they can't get what they want from the government. This guy is talking nonsense.
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Mar 29, 2016 01:55pm
This is blackmail! They sat on the Mehran for thirty years, and now when a new auto policy has been announced, they suddenly have hundreds of millions of dollars to invest??
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Mar 29, 2016 01:56pm
Atlast Suzuki Mehran and Bolan are going away.......Hurrayyyyyy......Bye Bye
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Mar 29, 2016 02:01pm
I am writing from India and a proud owner of Maruti Suzuki.The company has been in India from 1985. Today, India makes more than 2.3 million cars per year, that makes it the seventh largest car manufacturing country in the world. Of which Maruti Suzuki makes more than 45 % of the total production with more than 15 models.This is the company which made the Indian automobile industry what it is today. Not to mention the ancillary units and industrial town ships which have sprung up and the thousand of jobs created directly or indirectly . Every car below the 9 lakh range is benchmark against the Maruti Suzuki . This company makes more cars in India that its parent company in Japan.Both India and Pakistan have similar road condition and driving habits which makes it an ideal brand to buy in Pakistan. Now the current dispensation in Pakistan must have done something terrible wrong for them warrant such an action to move to Iran. Trust me this will hurt Pakistan very badly if they move to Iran.
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Mar 29, 2016 02:41pm
Pakistan should look at India and learn from the policy moves undertaken in India to foster the growth of the automobile industry there.
India today is fast establishing itself as the automobile factory of the world with almost all major brands manufacturing and exporting cars from India to global markets.
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Mar 29, 2016 03:04pm
Indian Companies like TATA Motors , Mumbai have gone ahead and taken over Jaguar and Land Rover virtually becoming automobile kings.
Further in two wheelers Bajaj Auto , TVS and Hero Motocorp . both Indian promoters are controlling 70 % market and exporting to nearly 45 countries.
For this to happen Pak society need to be peaceful, progressive and minority friendly. TATAs like Godrejs , Wadias , Shapoorji are Parsis.
Entrepreneurship needs a leg up in Pakistan.
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Mar 29, 2016 03:30pm
You better move away.. Poor quality products and very high prices.
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Mar 29, 2016 03:44pm
Ye what investment and what new model. They will change a headlight or add a new plastic panel and call it a be model, extorting millions more from our public for next 20 years.
Tell this mafia to kindly exit the market place and allow a European car maker to take its place.
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Mar 29, 2016 03:45pm
This is what the real sit in needs to be against..
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Mar 29, 2016 04:23pm
Suzuki should now grow up and ADP should ensure that all Suzuki cars should have proper reinforces and safety features in them which they removefrom cars to save ccost. As their is no such policy they are making car of least quality and putting everyone life in danger off and on the road. They are making billion in profit and not going anywhere and policy maker should ask forengine localization like maruti sSuzuki does insteadof metal and plastic parts. Truly technology ttransfer should be make. Its been more than30 years and no vendor is able to make single bbolt part from engine assembly.
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Mar 29, 2016 05:50pm
It may be better this so-called Pak-Suzuki may be pushed to Afghanistan rather than in Iran, for new investment. This company is consistently looting this nation by manufacturing third class vehicles through manoply.
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Mar 29, 2016 05:50pm
Yes please do it quickly move move..let the new companies come
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Mar 29, 2016 06:10pm
You get what you deserve
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Mar 29, 2016 06:21pm
goodbye and adieu!
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Mar 29, 2016 07:05pm
Please pack your bags with the Suzuki cars running on Pakistani roads and leave for good. You will not be missed.
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Mar 29, 2016 08:21pm
The main reason the auto industry is not flourishing the way it should is because of importation of second cars in Pakistan. How ridiculous is that?? You stifle your home grown auto industry buy bringing in second hand cars. What is the incentive to invest money and bring newer and better products when a bigger if older second hand car is still a cheaper option. Impose a higher duty on these cars so that locally produced vehicles become more attractive. This might hurt the consumer in the short run but in the long term, the nation will benefit.
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Mar 29, 2016 09:07pm
Good bye
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Mar 29, 2016 09:25pm
Let them move out please as their vehicles lack basic security features such as seat belts in rear seats, ABS etc. Further, they havent passed on the technology in last 30+ years which is a breach of contract on their part.
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Mar 29, 2016 09:29pm
They wouldn't invest in Pakistan and are still producing the 1988 Suzuki Mehran. Does anyone believe that they were seriously planning a $500m investment in Pakistan? This is just a threat so the govt restricts imports.
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Mar 29, 2016 10:31pm
Here in India, Maruti Suzuki has the best models... Great cars, value for money, safe and run for 2 lakh kms easily.... Minimum of service costs.... Don't know why so unpopular in Pakistan....
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Mar 29, 2016 11:07pm
Moving money in and out of Iran is still problematic because banks are hesitant to deal with the country even after the lifting of US sanctions. Iran has complained to the US about this but it's unlikely it will have any effect.
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Mar 29, 2016 11:18pm
They may please leave Pakistan, they have been selling a small metal box to Pakistanis for last 20 years in the name of a car named Mehran. Despite commanding 50% market share, they utterly failed to provide quality to helpless customers, Good Bye Pak Suzuki
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Mar 29, 2016 11:28pm
Iran has a population one third of pakistan's. It makes little sense to move.
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Mar 29, 2016 11:30pm
you call it blackmailing well its not. They lose nothing. The govt. loses due to their ego
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Mar 29, 2016 11:48pm
Earnings of 1.8bn and still you people are greedy! What were you sleeping until now! You deprive Pakistani people for better products! Yes we dont want Japanes over priced and low grade cars! The time have come to allow KIA, Hyundai and Volkswagan to allow to make plant and enter the market with better products and consumer choice!
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Mar 30, 2016 12:31am
Pakistan would be much better off without the substandard, out dated models that have had the monopoly over Pakistan for a such a long time. Let there be more robust quality, reliable well engineered vehicles like VW or similar!
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Mar 30, 2016 03:00am
Almost every comment complains about low quality and obsolescence of Pak Suziki cars. At the same time, the manufacturer/assembler has 50% market. Just wondering how low quality and obsolete cars can capture such a huge market share.
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Mar 30, 2016 03:04am
Good Bye and good riddance.
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Mar 30, 2016 04:03am
Before you go to Iran for good could you please buy back and take along my Suzuki Mehran?
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Mar 30, 2016 05:22am
Good riddance of bad rubbish
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Mar 30, 2016 08:40am
Yes please do go and try out Iran. Perhaps, you think that you shall be able to shake off heavy fines for failures to fulfill policy for the last twenty years in Iran also, by just paying away few pennies to politicians, well think again you shall be dealing with government and public that is serious about their country's success.
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Mar 30, 2016 02:27pm
Such threats sound more like blackmail. It is good that finally the new policy has some steps to introduce competition.
Paksuzuki's lineup Mehran, Bolan, Ravi, Cultus, and Swift are all globally retired obsolete vehicles. Bolan/Ravi is actually based on a late 1970s platform. Their lineup is obsolete and their cars have no safety features as well.
Competition is direly needed to protect consumer interests. Paksuzuki! stop treating Pakistan like a dumping ground for unsafe obsolete vehicles.
Pakistan will InshAllah have a modern and competitive industry.
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Mar 30, 2016 05:09pm
They will in any case go, within the next 5 years, as Chinese will enter with half their prices and better quality. CPEC will bring many projects for export and local sales! Good bye, Suzuki.
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Mar 30, 2016 06:49pm
Pak Suzuki & Indian Suzuki are started production almost same year, See where they stand now
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Mar 31, 2016 02:11am
@Rozetod Because in Pakistan, Suzuki is producing stupid cars. Even a fast rain is sufficient into the roof of it.
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Mar 31, 2016 05:37pm
It is a really good new. At least people will get quality cars in Pakistan not like Suzuki's lowest grade cars. Please go Pak Suzuki.
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