2 weeks Ago By Web Desk
Pak Suzuki Motor Company founded in 1983 enjoys unique distinction being pioneer in starting large scale manufacturing of cars in Pakistan. They started manufacturing in 1975 even before the formation of Pak Suzuki in 1983.It was a joint venture between Pakistan Automobile Corporation and Suzuki Motor Corporation of Japan.
Their entry in Pakistan was welcomed and Japan became the first overseas investor in Pakistan. Keeping in view the trends and requirement of people they introduced small car Suzuki Mehran for middle class people of Pakistan and it soon became popular car mainly because of low price and cheaper maintenance. The company started commercial production in 1984 and was privatized in September 1992 while Suzuki Motor Company progressively acquired stake of PACO and became the sole owner 19 April shall be remembered as great day for Karachi Editors Club when Hiroshi Kawamura CEO & Managing Director Pak Suzuki Motor Company Limited along with GM Corporate Affairs Akhlaq Virk and Executive Officer Marketing Amir Shafiq gave briefing to Karachi Editors Club.
He briefly covered journey spread over 42 years. During these years PSMCL has been able to win the trust of 2.3 million customers.
The growth rate has been commensurate with the demand. They started production when country needed smooth cash flow and Suzuki filled the gap by paying billions of rupees in taxes. The briefing was attended by major media managers.
Special thanks to Senator Sarmad Ali President APNS who in spite of his busy schedule was also present. After MD briefing Mubashar Meer introduced the media managers and thanked MD Kawamura for arranging meeting in local hotel. Pak Suzuki over the years has built up huge network of 175 dealerships in 100 cities of the country, some are pending and are under consideration.
It was indeed great news to learn from MD PSMCL Kawamura that it had exported 3000 Ravi Pickups to Bangladesh & Nepal and spare parts to many countries and exploring further potential and looking for new countries. It has helped to absorb large number of skilled workers beside creating a base over 100 local vendors to supply spare parts ensuring its quality and looking for additional market to earn foreign exchange that is badly needed. After detailed briefing MD PSMCL invited questions.
On a question that why Pak Suzuki Motor Company Limited has not been able to market low priced cars for middle class families as has been done by China and India. This may be pertinent to mention here that Pak Suzuki was the first passenger car manufacturer in the industry when the commercial production started in 1983/84. Suzuki FX the first vehicle to be produced with an 800cc engine and was priced just around PKR 45,000 for a brand new car.
The FX was almost three times cheaper than most vehicles available in the market back then. And even after 30 years of its life in our market, it is surviving strong and holds a decent resale value too. It looks that material used was of very high order as compared to these days The cost of smaller cars like Alto selling around 3 million rupees is beyond the reach of salaried class with meagre resources.
MD Kawamura explained briefly factors in determining the high prices of cars. It was shocking to hear that government has imposed huge taxes around 45% that ultimately is passed on to customers. Besides, government’s liberal policy to overseas Pakistani’s allowing import of used cars at lower taxes is badly affecting their sales it occupies 25% market share affecting purchase of locally manufactured cars.
Thirdly there is no consistency of government policies due to political instability. It has been observed that policies are made suiting to elite as a result the entire burden is transferred to common man. It also badly affects the investors.
There is definite need for the government to review its tax policies specially lowering taxes on smaller cars and limiting the import of used cars to enhance local production and making it affordable by salaried class. Enhanced production means creating more jobs for jobless and further add new vendors and boosting production of downstream industries Thank God that establishment is helping government and giving assurance to protect the interest of investors. Lastly but not the least governments duty concessions on import of used cars under 1300 CC with low fixed rates has badly affected sale of locally manufactured cars, therefore it will be more appropriate to reduce the taxes on smaller cars and impose higher taxes on luxury vehicles with over 1300 CC capacity.
It is hoped that government shall consider lowering tax rate on smaller cars in next budget likely to be announced in first week of June and invite foreign investors and take them in to confidence..
