Shifting the export engine beyond Textile:—by Moin Ansari
The last decade witnessed a phenomenal increase in Pakistan’s manufacturing capabilities. Pakistan became one of the largest producers of automobile parts—with a robust exponential improvement in the engineering to manufacturing supply chain. The most rapid advance was the transformation of assembly plants to actual manufacturing enterprises. The number of motor-cycles, and automobiles increased at a rapid rate. Moving up the pac-man chain, Pakistan has moved from manufacturing spare-parts, to assembling kits, to designing, and constructing the motor-cycles and vehicles. The Army has been moving fast in producing tanks and jeeps which it needs for its own consumption. With the technology and manufacturing capabilities developed at Kamra, Pakistan is on the cusp of looking at commercial aircrafts.
Global Automobile manufacturing is going through a lot of suffering which provides opportunities to growing countries like Pakistan. Outsourcing parts is a global trend that has to be taken advantage of. Pakistan can provide rubber mats at the lowest rung of the technology ladder, seats, leather upholstery, and plastic knobs. Moving up the chain, mirrors and wind-shields can be sold to major automobile manufacturers, and also to the after-market for spare parts. Lights, bulbs, and accessories also make up a sizable numbers. All these parts are already being made and sold in Pakistan. The vision is to gear up the industry for export—linking the manufacturers to the global players. Body parts and repair of part has always been a strength of Pakistani mechanics. This should be taken advantage of. Junk cars can be imported, fixed and then re-exported to third world countries.
The automobile business is evolving rapidly on a worldwide basis. Car and parts manufacturers are merging, component design and manufacture are now frequently outsourced instead of being created in-house, brands are changing and the giant automobile companies are expanding deeper into providing financial services to car buyers. Meanwhile, all of the biggest, most successful automobile industry firms have become totally global in nature. Globalization is in evidence throughout the automobile industry. Plunkett Research
The following trends tables are provided by Plunkett research:
- Automobile Industry Introduction > (View Sample Data)
- Big Three’s Dominance of the U.S. Auto Market Is Compromised
- Fuel Efficiency Becomes a Key Selling Element/Stiff Emissions Standards Adopted in the U.S. and Abroad
- Hybrid Cars Gain Market Share
- Electric Cars and Plug-in Hybrids (PHEVs) Will Quickly Gain Popularity/Major Research in Advanced Lithium Batteries
- Clean Diesel Technology Gains Acceptance
- Natural Gas Powered Vehicles off to a Slow Start
- Ethanol Production Soared, But a Market Glut May Slow Expansion
- Fuel Cell and Hydrogen Power Research Continues
- Outsourcing of Component Design and Manufacturing/Sharing of Parts
- "Optimum Lean Production" Saves Manufacturing Costs
- Car Purchasers Rely on the Internet
- Car Sales Shift in China, India and Russia/Chinese-Made Vehicles Exported for the First Time
- Focus on Safety Improvements by Automakers
- Super-Expensive Cars are Pushed by Manufacturers/Luxury Car Market Is Highly Competitive
- Rethinking SUVs/Small Sedans and Crossovers Gain Market Share
- Big News in Small Cars
- Wireless Information Systems Surge Ahead in Cars: Telematics, ITS and Real-Time Traffic Information
While Tata purchased obsolete plants from Jaguar and Range Rover, and the Chinese are in the midst of acquiring old Saabs and the Volvo manufacturing facilities, Pakistani entrepreneurs and businessman are looking at the right acquisition to enhance their indigenous expertise. Locally manufactured Adam Car made the right first step two decades ago—however Adam is not a household name yet. The inter is not just a vehicle to download porn. The internet can be used to sell automobile parts and replacement parts. Savvy US consumers hunt for bargains on the world wide web. The name says it all. Quality spare parts can be shipped from Pakistan to consumers in Japan, Germany and the US. There is not middle man. The products if made in conformance to international standards will be create demand and the bad players will be filtered out.
E-commerce is having profound effects on the car industry. Consumers use the Internet to become better informed before making an automobile purchase. Online sites like Autobytel steer millions of car buyers toward specific dealers while the same sites deliver competing bids for cars, insurance and financing in a manner that lowers costs and improves satisfaction among consumers.
Pakistan has leapfrogged the First world by taking advantage of Cellular Technology. It has bypassed the copper infrastructure by latching on to wireless—and has achieved one of the most deep penetrations of cells into the population. The cell phone per population ratio is one of the most dense in the world. Local manufacturing of cell phones was the logical next step in this regard. The lessons learned from the success of Cell phones can be emulated by the Automobile industry.
Automakers around the globe are reacting to the changing economics of the global auto industry, as evidenced by the rapid consolidation currently taking place in the business. Even prior to the intense merging frenzy which has taken place during the past two weeks, the list of auto manufacturers which were partially or entirely purchased by other auto companies in the recent past was remarkable. Examples of manufacturers acquired by their competitors include Chrysler, Volvo, Nissan, Saab, Suzuki, Daihatsu, Lamborghini, Bugatti, Bentley and Rolls Royce.
During the past week, however, several auto manufacturers have felt the urge to merge. General Motors has agreed to acquire a fifth of Fiat, Ford Motor has agreed to purchase Land Rover from BMW, and DaimlerChrysler is nearing a decision to buy a one-third stake in Mitsubishi Motors. In addition, Daewoo and Samsung are currently both up for sale, and the acquisitions of these two companies are likely to occur before the end of the year.
There are several broad trends pushing the consolidation movement. These trends are: strong brand names are becoming more essential than ever; auto manufacturers have to enter difficult markets; the costs related to technology and research and development are significantly increasing.
The acquisition strategies of the major auto manufacturers seem to be similar for the most part. For example, Ford and Volkswagen both try and acquire internationally recognized brands such as Jaguar, Volvo, and Lamborghini. DaimlerChrysler and Renault have followed the strategy of entering new markets like Japan and Korea through their acquisitions. General Motors focuses on purchasing companies that will enable it to obtain technology and parts less expensively. All Business
Tata bought Jaguar and range Rover for business purposes and add glitter to their obsolete output. The losses incurred by Tata did not justify the purchase. The Post Tata purchase results show a precipitous drop in consumer confidence as displayed by a huge drop in sales. Some of the drop in sales can be attributed to a global economic slowdown—however the drop in Jaguar sales is not indicative of industry trends—Toyota did not feel the same pinch as Tata did. Many at Tata now want to divest the company of money draining enterprises like Jaguar and Range Rover. Tata is tied by stringent union contracts which prevent Tata from moving plants to Bharat (aka India). British labor Unions had long suspected that Tata would eventually move manufacturing to places which offered lower labor rates. The Labor Unions placed several poison pills into the sale of Jaguar to Tata—which would make it very hard for Tata to move the factories out of England to Bharat. There is a lesson learned in that purchase. We wrote extensively about it—saying that this was not a business decision, but an emotional one—a decision that could not stand the test of time and profits.
The Chinese did not bid on the Jaguar. They knew that it was not worth purchasing. The Chinese BAIC purchased the right components of SAAB to fill holes in their capabilities. This is the right approach. Purchase the infrastructure and the capability, reverse engineer it to fit Chinese needs. Beijing has done that successfully with aircraft manufacturing.
After the successful manufacture of Nuclear bombs, missiles, and planes (K-8, and JF-17 Thunder), Pakistan is at a stage where businessmen from Islamabad should be trolling the bankruptcy lists, to find jewels which can then be used to build an export oriented industry. The Government should provide the vision. Can the Minister of Industries spell “vision”. Does Mr. Abdul Ghaffar Soomro Secretary Industries and Production have a strategy. How can Mr. Zardari run a government on individuals who cannot see beyond their noses?
The world is moving away from Carbon burning engines to electrical vehicles.
Toyota Motor said Monday that it planned a widespread release of its plug-in hybrid car in 2011 as the company scrambled to gain the upper hand in an increasingly crowded battle over next-generation “green” technology.
Toyota, the world’s largest automaker, dominates the current generation of gas-electric hybrid vehicles, but it has refrained from rushing lower-emission cars like the plug-in hybrid to market. Instead, Toyota has focused on plans to introduce regular hybrid technology to all its models by 2020.
But Toyota’s rivals are surging ahead. General Motors plans to build as many as 60,000 Chevrolet Volt plug-in hybrids a year, starting in late 2010. Other automakers, including Ford and Volkswagen, have announced their own plug-in models, and Nissan plans to mass-produce a fully electric car in 2010.
Toyota is now increasing its pace. “Several tens of thousands” of the plug-in version of its Prius hybrid will go on sale in 2011, the automaker said Monday. A small number of the plug-in models will be available for lease later this month as planned, but those will be limited to government and corporate clients in the United States, Europe and Japan.
Takeshi Uchiyamada, Toyota’s executive vice president, said in Tokyo that the company was waiting until 2011 to begin sales so it could hear feedback from users during the leasing period. The plug-ins would carry an “affordable” price tag, he said, without giving an estimate. Prices for a regular Prius hybrid with no plug-in function start at $22,400 in the United States.
The plug-in Prius would be the first from Toyota to use the powerful lithium-ion battery already used by many of its rivals. The car travels 23.4 kilometers, or 14.5 miles, as an electric vehicle on a single charge before a regular gas-electric hybrid system kicks in. It gets an overall mileage of 57 kilometers a liter, or 134 miles per gallon — exceeding the Prius’s 38 kilometers a liter, according to Toyota.
The plug-in Prius would charge in about 100 minutes and halve the running cost of traveling 30 kilometers in comparison with a regular Prius if recharged at night, when electricity costs are often lower, Toyota said.
The automaker says it also plans to sell a pure electric “urban commuter” vehicle in 2012 that would run on lithium-ion batteries.
But Toyota is not a vocal advocate of cars powered primarily by batteries — partly because it first wants to reap the full benefits of its heavy investment in its hybrid technology. Regular hybrid systems are still the company’s main green technology, Toyota executives stress.
Executives point to a number of constraints for electric vehicles: short range and feeble horsepower, lack of infrastructure like recharging stations, long charging times and the burden the cars could place on the electric grid. All-electric vehicles, in particular, are suitable only for short city runs, they say.
“We have been working on developing efficient powertrains to be able to use oil as efficiently as possible,” Mr. Uchiyamada told the Associated Press on Monday. “Many hurdles remain for alternative fuels.”
Pakistan, begged borrowed, and stole Nuclear technology and built the bomb. It also did the impossible in building missiles, the envy of South Asia. All this required adept use of technology. The infrastructure exists in the military field. Civilian Subcontractors provide the parts for the military.The heavy Mechanical Complex, and the Advanced Electronics Manufacturing Complex have the engineering knowhow to build consumer items. The islands of automation have bto be hooked up into a national export oriented policy. Today, the same level of effort is required to set up a “Manhattan Project for Automobile Manufacturing” to build an export oriented industry for motorcycles, cars, trucks and buses. “Manhattan Project for Trains” should take the current infrastructure and enhance it to the next level. Bullet Train technology is about six decades old. There is very little that is not public information. Mag Lev and TGV (Tres Grand Vitesse) technologies are low hanging fruit--available for the taking. All Pakistan needs is a Zulfiqar Ali Bhutto with a vision that can transform Pakistan into the modern state that it should be.
Industry experts are split on just how quickly the auto industry will shift to regular hybrids and plug-ins — and ultimately to zero-emissions vehicles like pure electric or even fuel cell-powered cars. Much will depend on the price of oil, as well as emissions standards set by governments, they say.
The uncertainty over the future mix of technologies is forcing carmakers to hedge their bets with various kinds of technology. That means that, for the time being, manufacturers could “struggle to achieve the required scale economies to cover high up-front investment costs,” Clive Wiggins, an auto analyst for Macquarie Bank based in Tokyo, said in a recent note.
Heavy development costs could weigh on the bottom line of automakers already dealing with the fallout of the global economic crisis. Toyota predicts a loss of ¥200 billion, or $2.26 billion, for the fiscal year ending in March, following a record ¥437 billion loss last year.
Mr. Wiggins said he was “cautious on the infrastructure constraints and costs involved” with plug-ins and electric vehicles. Eco-friendly vehicles could log sales of 11.2 million units in 2020, or 12 percent of total auto sales, from 0.8 million in 2009, with the majority of those sales coming from regular hybrids, he predicted.
Others predict that plug-ins and electric vehicles will be “game-changers” that will allow rivals or even newcomers to leapfrog the industry leaders like Toyota.Toyota to Sell Plug-In Hybrid in 2011 By HIROKO TABUCHI, Published: December 14, 2009
Reverse Engineering the new technology will pay huge dividends to Pakistan. As the largest automobile manufacturers move towards hybrid and battery operated engines, the Pakistani automobile industry has to focus, not only on the domestic market, but also emulate the Korean export-oriented infrastructure. China and Korea don’t build what is needed for Asia—they build what is needed by the consumer.
The Nissan chief executives, Carlos Ghosn, has said that pure electric cars will make up at least 10 percent of global demand by 2020, assuming oil costs more than $70 a barrel.
To address some constraints on its electric vehicle, the company is readying a lithium-ion battery that will power a car for 300 kilometers on a single charge, about twice the distance currently possible, Japan’s largest business daily, The Nikkei, reported last month, without identifying its source.
With a technological leap of that magnitude, and with rising concerns over global warming, consumers could rapidly shift from gasoline cars and hybrids to zero-emissions technology, said Hiroshi Shimizu, an environmental studies professor at Keio University in Tokyo and an electric car advocate.
’“When the market decides on what technology will be dominant,” Mr. Shimizu said, “carmakers better be ready, or ready to fall out of the race.” Toyota to Sell Plug-In Hybrid in 2011 By HIROKO TABUCHI, Published: December 14, 2009
It is time the Textile manufacturers broke out of the Textile manufacturing mindset. Manchester the birthplace of the Industrial Revolution, and the progenitor of the Textile Industry has moved on. The Pakistani Textile giants lazy in their comfort zones, have to be goaded into diversification. The Pakistani industry is focused on Textiles---in terms of diversification, the country has to move beyond textiles—into becoming the food granary for the Middle East ($200 Billino Market) and taking a slice of the automobile manufacturing.
Textile mill owners in the 70 built chemical plants and set up new industries in Kala Shah Kakoo and other areas. Today, every Textile manufacturer has to set up new factories for making batteries, and hybrid cars.
The latest lithium-ion batteries developed by Nissan open up huge vistas of opportunity for the Pakistani entrepreneur.
Dr. Furrukh Saleem in a fascinating article (his best yet) published in The News calculated that Pakistan needs 58,000 new schools and 163,000 teachers to universal education for all Pakistani engines. Pakistan needs 58,000 new schools, 163,000 new teachers, and 5000 new hospitals. He also calculated that a new hospital costs $1.5 million. He suggested that Pakistan build 100 hospitals per year using US Aid. Can Pakistanis work smartly, and run double shift schools which have one room clinics attached to them—providing basic first aid and inoculation and welfare care? Can the third shift impart Vocational Training in trades like carpentry, automobile repair, electronic manufacturing, soldering, plumbing, medical support, teacher certifications, energy maintenance. The cost of providing basic healthcare and complete education to all Pakistani children would be about $15 billion. We put forward a proposal to the Pakistan Tehrik e Insaf to set up a Pakistan Overseas Organization with 5 million members. if each member purchased a share of $2500, the overseas Pakistanis could within a few years (short period, 5 to 10 years) transform Pakistan’s basic infrastructure in terms of health and education. This would unleash the spirit of creative entrepreneurship in Pakistan that would be unparalleled on the planet.
If the Overseas Pakistanis continue to the $2500 contribution to Pakistani infrastructure on a per annum basis—they could pick for-profit investment in automobile manufacturing, bullet train infrastructure, oil and gas development, and food security.