Market Expansion Possibilities In The Auto Mobile Industry Of Pakistan Marketing Essay

Market Expansion Possibilities In The Auto Mobile Industry Of Pakistan Marketing Essay Chapter 1: Introduction The evolution of the automotive industry has been influenced by various innovations in fuels, vehicle components, societal infrastructure, and manufacturing practices, as well as changes in markets, suppliers and business structures. As the challenges of twenty-first century are growing day by day and business world is becoming more competitive and customer centric with fluctuating trends. The automotive industry is the industry involved in the planning, design, development, manufacture, and marketing. The automobile industry is concerned with profits and competition; with consumer demands for styling, safety, and efficiency; and with labor relations and manufacturing efficiency. In 2007, more than 73 million motor vehicles, including cars and commercial vehicles were produced worldwide. This report represents a detailed and comprehensive account of the market expansion possibilities of the automobile sector in Pakistan and is documented on the directions of our subject teacher Sir Mustaghis-ur-Rehman. Our project essentially becomes the part of our course Strategic Management as this will make us implement practically what we have learnt throughout the course. Automobile sector is one of the most vibrant sectors in Pakistani economy with respect to policy changes, criticism on underdevelopment and lack of transfer of technology and head on collision with imported vehicles. The automobile industry in Pakistan operates under franchise and technical cooperation agreements with leading world manufacturers and can be broadly categorized into various segments, i.e. cars and light commercial vehicles (LCVs), two and three wheelers, tractors, trucks and buses and vendor industry. The  Automobile industry  has been an active and growing field in  Pakistan  for a long time, however not as much established to figure in the prominent list of the top automotive industries. Despite significant production volumes, transfer or technology remains low. Most cars in the country have dual fuel options and run on CNG(compressed natural gas) which is more affordable than petrol in the country. There are only three major passenger car assemblers in the market; Pak Suzuki, Indus Motors and Honda Atlas. Pak Suzuki has almost complete monopoly in the small car segment as it faces almost no competition other than the single odd Diahatsu Cuore produced by Indus Motors. In the Subcompact Sedan segment Toyota Corolla, Honda Civic, Honda City, and the Nissan Sunny are currently the only cars in production. There are still no locally made SUV, Mid or Full sized sedans available. We have analyzed the industrys dominant economic features because industries do differ significantly in their basic character structure thereby identifying the market size, scope of competitive rivalry, market growth rate, number of buyers and their relevant sizes. The competition prevalent in the industry and the strength of the competitive forces has been elaborated. The driving forces in the auto industry are highlighted and its impact on the Pakistani auto industry expressed. The key success factors that affect industry members ability to prosper in the marketplace regarding resources, competencies, product attributes etc have been pointed out. In depth analysis of the political, economical, social,technological and legal conditionsof Pakistanwith reference to the automobile industry will help in crafting a better strategy for the expansion. Automobile demand was strengthened by higher bank financing which shored up car sales despite the increase in prices during the first quarter of FY11. Chapter 2: Background This chapter covers the background of the expansion possibilities in the auto industry of Pakistan. As we are discussing the expansion possibilities; we will first have a look at the current situation of industry; where it is lagging and then what can be done for the future expansion. DOMINANT ECONOMIC TRAITS IN AUTO INDUSTRY Scope of the Rivalry: Suzuki is the biggest competitor holding 52% of the total market share. Following is Toyota with around 29% and then Honda with 10.4%. Other companies constitute rest of the market share. We can say that Suzuki is leading the industry and does not have a direct rivalry as market niche for Toyota and Honda is different. Market Size: In 1998 500 Million Vehicles on the Road, 49 Million New Registrations. Number of Competitors: The most dominant of the competitors are Suzuki, Indus motors for Toyota and Honda Atlas for Honda. Prevalence of Backward Integration: Partially integrated industry. Entry Barriers: Very High, Experience Curve, sizable economies of scale, brand loyalty, large capital requirements, access to distribution channels. Exit Barriers: High Fixed Costs, Specialized Plants and machinery to some degree, Shared facilities Pace of Technology: Obsolescence is not really an issue because of resale value and functionality. Product and Customer Characteristics: Segmented by Social Status and Value Orientation. Most manufacturers have broad product lines. Capacity Utilization: Capacity in Nos. CAR 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 1 Pak Suzuki Motor Co. Ltd. 120000 150000 150000 150000 150000 150000 2 Indus Motor Co. Ltd. 44298 53040 53040 53040 53040   53040 3 Honda Atlas Cars (Pakistan) Ltd. 30000 50000 50000 50000 50000 50000 Rapid Product Innovation: Many innovations in the 1990s, numerous cooperation agreements. In ten years, time-to-market went from an average of 60 months to 24 months. DRIVERS OF CHANGE IN THE AUTO-INDUSTRY Driver Industry Effect Slow Industry Growth More Consolidation, Larger firms in better position to reduce costs in production, purchasing, and product development costs Increasing Globalization Requires an infrastructure to manufacture and distribute vehicles internationally. Technological Change Encouraging more cooperative agreements Suppliers Larger Role Suppliers account for 69% of entire value. Working in parallel with suppliers helps to reduce time to market. Increasing Government Regulation Concerns regarding safety, emissions, fuel efficiency. Increasing emphases on reducing Costs Mature market requires new features, but at the same time manufacturers must be concerned about costs KEY SUCCESS FACTORS IN AUTO INDUSTRY The key success factors of any industry are indicators or milestones that measure your business achievements and help determine how well you are progressing towards your goals and objectives. Without determining your key success factors, you run the risk of needing to make expensive changes of direction later on as you have not aligned your objectives to the success of your business. Following are the KSFs for the auto industry of Pakistan: Positive Image One critical factor that often defines an automotive company is its public image. Because buyers entrust their safety, along with a sizable portion of their income, to a  car  company, the perception of the company figures greatly in the buying decision. Factors influencing an automotive companys image include advertising, word of mouth and expert reviews and opinions. Low Cost Provider Pakistan is a developing country and majority of the population is below the poverty line; the middle class is vanishing very quickly; there is an emerging need of a cost effective car which is fuel efficient and also low cost. Distribution Network A more practical critical success factor for any automotive company is a strong network for distribution. Because  cars  and trucks are not sold directly to customers, auto manufacturers rely on franchised dealerships to provide local showrooms. These dealers must be knowledgeable and reputable to sell cars, which is essential for the automaker. Like auto corporations, dealers are reliant on a positive image that may be influenced by, or influence in turn, the image of the automaker. The cars should be available also in the remote areas of Pakistan to capture market share. Cash Flow A healthy cash flow is another practical critical success factor. When an automaker provides incentives or lowers prices, it almost always sells more cars, but the profit margin may not be a healthy one. At the same time, an automaker needs to keep costs under control, including line items that are prone to fluctuation such as the price of raw materials and outsourced components. Achieving a sustainable cash flow is central to the frequent discussions between automakers and employee unions. Compliance Automakers must also ensure that the vehicles they sell are in compliance with various federal and local regulations. These include emissions standards, fuel efficiency and safety standards. While it may cost less to produce vehicles that perform marginally in these areas, the cost of a safety recall or government-mandated repairs are often much higher and difficult to anticipate. Flexibility An elusive critical success factor for the automotive industry is the ability to be flexible. Pakistan car buyers may change their buying habits quickly in response to factors like the state of the economy, the price of fuel and new automotive technologies. It is essential that automakers remain attentive to these trends and keep in place a system that can adapt quickly to create new products that meet the current and near-future needs of customers. Chapter 3: Industry Analysis Pakistan is an emerging market for automobiles and automotive parts offers immense business and investment  opportunities. The total contribution of Auto industry to GDP in 2007 is 2.8% which is likely to increase up to 5.6% in the next 5 years. Total gross sales of automobiles in Pakistan were Rs.214 billion in 2006-07 or $2.67 billion. The industry paid Rs.63 billion cumulative taxes in 2007-08 that the government has levied on automobiles. There are 500 auto-parts manufacturers in the country that supply parts to original equipment manufacturers (PAMA members). Auto sector presently, contributes 16% to the manufacturing sector which also is expected to increase 25% in the next 7 years, as compared to 6.7 percent during 2001-02.Vehicles manufacturers directly employ over 192,000 people with a total investment of over $ 1.5 billion. Currently, there are around 82 vehicles assemblers in the industry producing passengers cars, light commercial vehicles, trucks, buses, tractors and 2 /3 wheelers. The auto policy is geared up to make an investment of $ 4.09 billion in the next five years thus, making a target of half a million cars per annum achievable. Government of Pakistan had undertaken two major initiatives in the form of National Trade Corridor Improvement Program (NTCIP) and Auto Industry Development Program (AIDP) for the development of the automotive industry in Pakistan. Engineering Development Board (EDB) is actively implementing the AIDP to increase the GDP contribution of the automotive sector to 5.6%, boost car production capacity to half a million units as well as attract an investment of US$ 3 billion and reach an auto export target of US$ 650 million. Automotive engineering is a driving force of large scale manufacturing, contributing US$ 3.6 billion to the national economy and engaging over 192,000 people in direct employment. The Auto parts manufacturing is $ 0.96 billion per annum. The demand for auto parts is highest in the motor cycle industry which is 60%, then is for cars which constitutes to 22% and the rest 18% is consumed by trucks, buses tractors. This demand is met by Imports which caters 22% while the remaining 78% is supplied by the local manufacturers. Due to the increase in demand for sophisticated machinery, the government has allowed duty free import of raw  material, sub components, components assemblies for manufacturers assemblers. Total import bill of machinery stands at $2.195 billion in the current fiscal year of 2007-08 which is 12.77% higher than that of the preceding year. The impressive growth in the machine tools and automation sector is directly proportional to the growth of the automotive industry which has become the fastest growing industry of Pakistan and contributes $3.6 billion annually to the countrys GDP.   The aftermarket for spares has also witnessed immense expansion over the same period, with imported parts playing an important role in meeting local demand. The spare parts market is given further impetus by a total vehicle population of approximately 5.4 million Pakistan has the second highest number of CNG-powered vehicles in the world with more than 1.55 million cars and passenger buses, constituting 24% of total vehicles in Pakistan with improved fuel efficiency and conforming to the latest environment regulations. Honda Atlas Cars Pakistan Ltd Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company Limited Japan, and the Atlas  Ã‚  Ã‚  Group of Companies, Pakistan. The company was incorporated on November 1992 and joint venture agreement was signed on August 1993. The ground breaking ceremony was held on April 17, 1993 and within a record time of 11 months, construction and erection of machinery was completed. The first car rolled off the assembly line on May 26, 1994. Official inauguration was done by President of Pakistan, Sardar Farooq Ahmad Khan Leghari. Mr Kawamoto, President of Honda Motor Company Limited Japan was also present to grace the occasion. The company is listed on Karachi, Lahore and Islamabad Stock Exchanges. In July 1994, car bookings started at six dealerships in Karachi, Lahore, and Islamabad. Since then the Dealerships Network has expanded and now the company has sixteen 3S (Sales, Service and Spare Parts) and thirty 2S (Service and Spare Parts) Pitstops network in all major cities of Pakistan. Since the commencement of production in 1994, the company has produced and sold more than 150,000 cars till Oct, 2008. All dealerships are constructed in accordance with the standards defined by Honda World over.  Ã‚   Indus Motor Company Indus Motor Company (IMC) is a joint venture between the House of Habib, Toyota Motor Corporation Japan (TMC),  Daihatsu Motor Company Ltd.vehicles in Pakistan through its dealership network. The company was incorporated in Pakistan as a public limited company in December 1989 and started commercial production in May 1993. The shares of company are quoted on the stock exchanges of Pakistan. Toyota Motor Corporation and Toyota Tsusho Corporation have 25 % stake in the company equity. IMCs production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an area measuring over 105 acres. Indus Motor companys plant is the only manufacturing site in the world where both Toyota and Daihatsu brands are being manufactured. IMCs Product line includes 6 variants of the newly introduced Toyota Corolla, Toyota Hilux Single Cabin 4ÃÆ'-2 and 4 versions of Daihatsu Cuore. Toyota Tsusho Corporation Japan (TTC) for assembling, progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01, 1990. IMC is engaged in sole distributorship of Toyota. Pak Suzuki Motor Company Pak Suzuki Motor Company Ltd (PSMCL), established as a joint venture between Suzuki Motor Corporation of Japan (SMC) and Pakistan Automobile Corporation (PACO) Govt. of Pakistan in 1983. Started commercial operations with production (S.O.P.) of Suzuki FX in 1984. In 1992, started production of MARGALLA at new Plant. In 1997, started production of 1300cc BALENO replacing Margalla. In 2001, launched the CNG version of MEHRAN, RAVI and BOLAN. By 2005 capacity expansion up to 80,000 vehicles per year were completed. In 2006, capacity expansion up to 120,000 vehicles per year was completed and production of 1300cc/1600cc car LIANA and BALENO commenced. In 2007, the third  Ã‚  phases of capacity expansion up to 150,000 vehicles per year were completed. Amalgamation of Suzuki Motorcycle Pakistan Ltd into Pak Suzuki Motor Company Ltd took place and new land of 120 acres was acquired for further expansion adjacent to current plant. In 2008, the company started exporting Suzuki LIANA to Bang ladesh. Pak Suzuki acquired a land of 25.22 acres at Lahore for setting up PDI centre, Spare Parts Ware-house, Regional Office and other related facilities. Nexus Automotive Chevrolets were sold in Pakistan well into the 1970s, after which the automotive regime was changed and Chevrolet  Ã‚  gradually withdrew to its home market in the United States. In 2004, after an absence of three decades, Chevrolet was re-introduced in Pakistan. Once again, a global brand with a product line-up suited to developing markets such as Pakistan, Chevrolet has made a successful return to the country. Working with Nexus Automotive, General Motors partner in Pakistan , Chevrolet can once again be seen on roads all over the country. Today, Nexus Automotive assembles the 1000cc Chevrolet Joy at Port Qasim (Sindh), and imports a broader line-up of cars, including Aveo, Optra, and Colorado (coming soon) from the General Motors global network. Al-Ghazi Tractors Al-Ghazi Tractors Limited (AGTL) was incorporated in 1983. In 1991 the project was offered for privatization, andacquired by Al-Futtaim Group of Dubai who took over the management control of AGTL in December 1991. Ever since   AGTL is a case study of rollicking corporate success. 50.02% shares of the company are held by Al-Futtaim Industries Co. LLC and 43.17% shares are held by CNH Global NV, with whom Al-Ghazi Tractors Limited has signed an Industrial Collaboration Agreement for manufacture of New Holland brand tractors. The Agreement is valid till April 2016. With expansions carried out in 2005, the plant is now capable of producing 30,000+ tractors per year in a single shift the most enduring competitive edge being the quality of our tractors, which are robust and sturdy and carry a local content as high as 92%. AGTL was the first automobile company in Pakistan to earn the ISO-9002 Certificate. Dewan Motors Dewan Farooque Motors Limited has one of the most advanced automobile assembly plants of South Asia. Located at Dewan City, Sujawal, Thatta, with a total project cost of Rs. 1.8 billion, the plant is built on an area of 42,000 square meters. Selection of the site reflects the commitment of Dewan Group towards building of a prosperous Pakistan and its contribution to national wealth. The project has provided direct employment to over 700 personnel. The plant is the first automobile manufacturing unit in Pakistan to be independently invested by 100% Pakistani investors. The annual capacity of the plant is 10,000 units on a single shift basis. The groundbreaking ceremony for the plant was held in June 1999, and the first Kia Classic rolled-out in a record time of six months. Today the modern state-of-the-art plant is rolling-out cars every day. This is the first and only automobile assembly plant in Pakistan with state of art robotic equipment. Dewan Farooque Motors Limited has technica l collaboration and license agreements with the following Korean companies: Hyundai Motor Company December 25th 1998 Kia Motors Corporation July 27th 1999 Ghandhara Industries The Ghandhara Industries Limited is a public limited company quoted on the Stock Exchanges and registered under the Companies Act, 1913 (now companies Ordinance, 1984). It was established in Karachi by General Motors Overseas Distribution Corporation U.S.A. in 1963 Lt. Gen. M. Habibullah Khan Khattak acquired these facilities from General Motors and renamed it Ghandhara Industries Limited. The Government of Pakistan nationalized Ghandhara Industries Limited in 1972 and renamed it National Motors Limited. In 1992 M/s. Bibojee Services (Pvt) ltd. acquired it under Privatization Policy of the Government, and adopted its original name Ghandhara Industries Limited w.e.f. 27-11-1999. The major business activities of the company comprise of progressive manufacture, assembly and marketing Isuzu truck and bus chassis and fabrication of Bus and Load bodies.   Ghandhara industries Ltd have a product range of ISUZU medium-duty vehicles (F-Series) light-duty Vehicles (N-Seies) in Pakistan. Hino-Pak Motors Ltd Hino Motors Japan and Toyota Tsusho Corporation in collaboration with Al-Futtaim Group of UAE and PACO Pakistan formed Hinopak Motors Limited in 1986. In 1998, Hino Motors Ltd., and Toyota Tsusho Corporation obtained majority shareholding in the company after disinvestments by the other two founding sponsors. Adam Motor Company We would do  great injustice if we fail to mention, the only large scale effort made by a Pakistani to achieve what others  Ã‚  failed to  implement or even envision. Mr.Feroz Khan,  founder of the  Adam Motor Company, Ltd.  was an automobile assembler based in Karachi, Pakistan. They were notable for producing the  Revo, which was Pakistans first homegrown company to assemble a decent car. Together with styler Mehmood Hussain, Chief Engineer N. A. Salmi and two fresh graduates from NED, Khan designed and manufactured Pakistans first car. In fact, Khan invested in the latest software programs to train his team using Computer Aided Design (CAD) and Computer Aided Manufacturing (CAM). Khan is also Chairman and CEO of Omar Jibran Engineering Industries and has twice been Chairman of Pakistan Association of Automotive Parts and Accessories Manufacturers.  All their vehicles used Made in China components due to lack of a modern manufacturing industry in Pakistan. Initially Adam Motor was involved in assembling cheap Made in China light trucks, followed by a Made in China four-wheel drive off-road vehicle. Later they started manufacturing the Revo. The 800CC version of the Revo costs Rs. 269,000 (about $4,500) and the 1050 model is Rs. 369,000 (about $6,200). The Revo has also been built in accordance with EU safety regulations. Mr. Feroz Khan blames the politicians for the companys failure. The current auto update about vehicle production in year 2008, i got the report in recently from local magazine, i am subcriber of the said magazine thats why i have update information about it. According to the report which was published in February 2009 issue of Mobile World. The number of vehicles produced in country declined in the second half of last year to 59,288 from 96,448 units produced during first half in contrast to installed capacity of 383,922 units. It may be mentioned here that out of total number of 19 registered four wheeler assemblers 4 have already abandoned the assembling activities. Out of remaining 15 manufacturers M/s Pak Suzuki Motor Company was the top producer during July to December 2008 by making a total of 34,607 vehicles of six different types. Indus Motor Company was the second highest who produced 14,844 vehicles of three different kinds followed by Honda Atlas Cars who produced only two brands making a total of 6,154. Dewan Farooque Motors with 1,413 and Nexus Automotive with 197 were the other car manufacturers in the line. Sigma Motors, assemblers of Defender Jeep produced only 13 units in six months while Sindh Engineering had manufactured 25 Dong Feng light Trucks and Dewan Automotive Engineering formerly known as Delta Innovations produced 2 Star Trucks only. Similarly, Karakoram Motors produced 43 Kalash pickups. M/s Hinopak Motors was the leading manufacturer of heavy/ light duty trucks, dumpers, semi trailers, prime mover and bus segments which produced a total of 1,062 vehicles. Ghandhara Nissan followed through manufacture of 315 including 24 Nissan Sunny cars and Ghandhara Industries produced 308 Isuzu vehicles while Afzal Motors made 85 Daewoo vehicles and Bibojee Services produced 8 Kamaz prime movers. M/s Raja Motor Company, Adam Motor and Transmission Motor were the companies whom had abandoned the manufacturing of Fiat UNO car, Zabardast truck and Alif car, Bay pickup respectively. Similarly, M/s Roma Motor Company was the assembler of Roma Mini truck. During this period Suzuki pickup was the most demanded vehicle for Pak Suzuki Motors that topped by 9,267 in the company followed by 7,853 Mehran, 6,301 Bolan, 6,133 Cultus, 4667 alto and 386 Liana cars. Toyota Corolla was the favorite from Indus Motors with 10,130 units followed by 4,003 Daihatsu Cuore and 711 Hilux pickups. Honda produced 3,301 Civic and 2,853 City cars. Dewan Farooque produced 1,320 Shehzore pickup and 93 Hyundai Santro cars while Nexus Automotive assembled 197 Chevrolet Joy cars. It may be mentioned here that Pak Suzuki has installed capacity of 150,000 units, Indus 50,000, Honda 50,000, Dewan Farooque 10,000, sigma Motors 1,000, Sindh Engineering 3,000, Mater Motor 8,500, and Roma Motor 572. In truck and bus assembling segment Hinopak has installed capacity of 5,950 vehicles, Ghandhara Nissan 2,200 trucks buses and 6,000 Nissan sunny cars, Ghandhara Industries 3,000, Afzal Motors 3,000 and Bibojee Services 200 units, respectively. Automobile demand was strengthened by higher bank financing which shored up car sales despite the increase in prices. Similarly, production of some of consumer electronics rose sharply despite imposition of federal excise duty in Budget FY11. In fact, continued indigenization of automobiles partly contained the pass-through of currency depreciation on local prices, while duty reductions on imports of some electronic parts have helped firms reduce their costs. Car Financing and Sales (Jul-Nov) FY10 FY11 Disbursements (mln Rs.) 6,252 22,969 Avg. car price (Rs.)* 854,122 912,822 Car sales 42,166 46,822 * Average of 11 car models; Source: PAMA, Automark. Official Pakistani car sales figures only take into consideration the models produced locally, which gives a pretty good idea of actual car sales given imports are very limited. Nearly 1 in every 3 new cars sold in the country is a Toyota Corolla! It totals 44,098 sales over the year for a 29.7% market share. No less than 5 Suzukis follow, on top of which the veteran Suzuki Mehran (a 1988 Maruti 800), still holding very well for its age at 23,117 sales and 15.6%, and the pick-up Ravi grabbing nearly 10% of the Pakistani market in 3rd. The Suzuki Bolan (aka Carry) is 4th with 12,701 sales and 8.6% ahead of the Alto and Cultus. The plant capacity was increased in year 2005-2006 as the bank car financing was at boom. But since then it has been fixed. The table below describes the total number of cars, jeeps, trucks, buses, tractors and buses sold from 2001-2009.   According to Government Board of Investment, Automotive Industry   No of Units Number 01-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Cars 5 164,000 40,601 62,893 99,263 126,817 160,642 176,016 164,710 84,308 Jeeps 2 3,298 1,590 932 Light Vehicles 4 32,500 8,491 12,174 14,089 23,613 29,581 19,672 21,354 Trucks 5 17,500 1,141 1,954 2,022 3,204 4,518 4,410 4,993 3,135 Buses 5 3,900 1099 1,340 1,380 1,762 825 993 1,146 662 Tractors 3 50,000 24,331 26,501 36,103 43,746 49,439 54,610 53,607 59,968 Motor Cycles 55 733,000 133,334 176,591 327,446 571,145 744,875 839,224 1,057,751 493,592 EXPANSION POSSIBILITIES AND OPPORTUNITIES Increasing Demand for Cars: In Pakistan context there are 9 cars in 1,000 persons which is one of the lowest in the emerging economies which itself speaks of high potential of growth in the auto sector and more so in the car production. Rising per capita income with changing demographic distribution and an anticipated influx of 30 to 40 million young people in the economically active workforce in the next few years provides a stimulus to the industry to expand and grow. Resale of Local Assembled Cars: Resale of locally assembled cars is better due to availability of spare parts and after sales services and warranty Used imported cars have been selling below their cost at the showrooms for the last six months but consumers are not inclined to buy because of their low re-sale value and problems in parts availability. Quality of local cars: Initially when the import of cars was liberalized the quality of local assembled cars was unsatisfactory so the people of high income level group started buying imported cars and the sales of the local assembled cars started decreasing so the local assemblers started enhancing the quality of their vehicles so we can say that the quality of local cars is becoming the strength of the auto industry. OEM: The local OEM of Pakistan is well equipped with enough advance technology and skilled labor to produce parts according to the desired quality of any foreign company. CNG kit The advantage of buying local assembled cars is that they come with factory fitted CNG kits at the times when the prices of fuel rising at higher pace internationally. Mechanics: For local assembled cars mechanics are readily available in market and much cheaper so the buyer has not to worry about any problem that can occur in the car in long term whereas the availability for imported cars is a bigger issue for the owners and if somehow they are able to find one then the mechanics charges much higher than actually it should be charged. Import German technology and skills EDB wanted to build a Pakistan-German automotive supply network, providing opportunities to Pakistani automotive vendor enterprises to benefit from the German know-how and technology to improve quality, productivity, developing and marketing of value-added products. Foreign Investment and setup production facilities China National Heavy Duty Truck Corporation (CNHDTC), on