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Chinese truck makers eye Pakistan as roads and market expand


3/6/2017

KARACHI: A greater number of trucks plying along the China-Pakistan Economic Corridor (CPEC) are likely to be Chinese as the country’s manufacturers aim to penetrate further and gain share in a market currently dominated by Japanese players.

In the recently-concluded Pakistan Auto Parts Show (PAPS) held at the Karachi Expo Centre, Chinese truck and bus manufacturers made their presence felt.

German truck maker MAN SE to set up assembly plant in Pakistan

Keeping in mind CPEC and its need for heavy vehicles, it came as no surprise that Chinese manufacturers dominated the exhibition in terms of numbers and sounded confident over increasing their sales figures.

“We are looking for better sales in the coming months,” said Dysin Automobile Limited Manager Tender and Commercial Sales Jawaid Iqbal.

Dysin Automobiles is a regular exhibitor at PAPS and has so far sold over 700 trucks in Pakistan, informed Iqbal.

Apart from the traditional sectors like oil and transport, these vehicles are being used in major infrastructure projects like highways, power plants as well. As part of greater economic activity under CPEC, industry officials say a large number of Chinese trucks and dumpers are being purchased by private contractors working on large infrastructure projects.

Four truck manufacturing companies exhibited their products in PAPS 2017, a three-day show. Three of them were Chinese with a lone European completing the lineup.

R & R Corporation Pvt Ltd is marketing Chinese trucks and buses in Pakistan and its Director Sales and Marketing Rana Ali Hassan said that more than dozens Chinese buses are soon going to reach Karachi for the city’s mass transit project.

Companies that assemble or import Chinese trucks and buses in Pakistan are of the view that the biggest reason for greater sales is price, which is almost half in most cases.

For instance, a Chinese truck that one can buy in Rs7.8 million goes up to Rs12.6 million in the Japanese range. The high-end European brand like Volvo goes up to Rs16.5 million.

 Threat to other players?

But this does not mean that existing players feel threatened.

“Our market is niche and we don’t feel threatened by the Chinese coming in to Pakistan because our sales are also growing fast,” an official of Volvo told The Express Tribune.

Volvo, a Sweden-based manufacturing company,  has been importing Completely Built Units (CBU) in Pakistan for more than a decade. Volvo’s authorised dealer in Pakistan has sold more than 1,400 trucks so far. The company sells around 80 trucks per year and its sales are growing at an annual rate of 20%.

Auto companies say local part makers can meet demand

Sales in Pakistan

Pakistan produced a record 6,736 units of trucks and buses in fiscal year 2015-16. After a gap of over seven years, sales of trucks and buses have rebounded strongly due to a relative improvement in security and macroeconomic stability in the country.

Assemblers of trucks and buses in Pakistan also give credit to the policies of current government which has supported local industry instead of importing new and used trucks.

The CPEC is also expected to generate huge demand for trucks in Pakistan thus, creating opportunities for all companies from mid-tier to high-end categories. Industry officials say German truck maker MAN SE is also gearing up to establish a plant in Pakistan.

Some industry officials say established Pakistani companies would prefer to use European trucks due to quality concerns. European truck makers are also confident that their vehicles are better placed to commute on extraordinary high altitude of Karakoram Highway (KKH) – one of the highest paved roads in the world that connects Pakistan and China.

Source: The Express Tribune