The Automotive Parts Sector In Pakistan Export Performance - TRTA i

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More than 75% of companies use local as well as imported raw materials, while 25% purchasetheir raw materials locally. Local raw materials include silicon, pig iron, and heads. The rawmaterials mostly imported are pig iron, coal, nichol, coke, silicon manganese, aluminium,aluminium alloys and foundry chemicals. China, Russia and Africa were found to be thedominating suppliers. However, imports also come from other countries, such as Korea, Iran,Brazil, Ukraine and Canada.In forging, it is an equal mix of local as well as imported raw materials. Companies purchasepullies, round bars, pig iron, alloy steel, carbon steel and engine valves locally. Pins, shockabsorbers, valves, tapers, hammer and steel items are mostly imported. Imports mainly comefrom China, but Italy, India, Korea, the UK, Turkey, South Africa and America are alsorelatively significant players.2.2.3 Stamping and fabrication (sheet metal parts)Most of the body and chassis parts consist of sheet metal parts. Raw material is mild steelsheets in various gauges depending on its use, reliability and safety. Steel sheet is given adesired shape and then welded together to form the shape of the vehicle. The technology isdiverse and generally consists of many processes, such as shearing, blanking, forming,drawing, trimming, notching, bending, piercing, embossing, re-striking, welding, etc.In order to produce quality stamping or fabrication, the first operation is to determine the diesto be used in manufacturing the part and, after considering the specified quantity, material typeand dimensional tolerances, material information is obtained. Most drawings clearly identifythe required material. Some material specifications can be a problem, resulting in productiondelays. These more difficult material specs can involve special types, special tempers, nonstandardthickness and special thickness tolerances.Tolerances vary according to the design of the part, its ultimate use, the size of the part, theoperations to be performed and the material to be used. This means that each part has its ownpractical tolerance. But, generally speaking, the tighter the dimensional tolerance, the higherthe engineering needed. Each basic metal stamping operation is usually done with one hit. Thatmeans the part's entire periphery is cut with one hit (blanking). All holes and openings are donein one operation with punches located at the point of contact. When possible, formingoperations are done in punch presses using hardened tools.Standard tools and engineering fixtures are used or, when customised tooling is required,computer assisted equipment ensures close tolerances. Each of these processes represent"limited quantity" sheet metal manufacturing, different level of quality, close tolerance abilityand "finished" look.2.2.4 Assemblies (components and sub-assemblies)Assembly techniques are used for making sub-assemblies for cars, motorcycles and tractors.Components produced using assembly techniques are: brake assemblies, gear shaft assemblies,speed-o-meters, flashers, lever combination assemblies, jack assemblies, frames, all types ofshocks, shaft assemblies, CNG assemblies, duct assemblies, panel assemblies, mufflerassemblies, spindle gear shaft assemblies, air cleaner assemblies, CNG bracket assemblies,wiper assemblies, sound dumping assemblies, dash insulation assemblies, parcel trays, packagetrays, seats, dimmers, stoppers, oil level gauge seals, rings, fuel and water tanks.Page 18International Trade Centre
Companies purchase 40% of their raw materials locally, while 60% use local as well asimported raw materials. The material purchased locally includes MS sheet, hardware, springs,coating material, glass rooftop, carbon rod, local sheet, carbon steel and ball bearing. Theimported material includes steel wires, metal sheets, tools, plastic compound, and differenttypes of round bar, galvanised and steel wires. These imported raw materials come from Japan,Saudi Arabia, China, Belgium, Korea and some countries in Europe.2.2.5 Product specification certificatesAlmost all suppliers from China, Italy, Korea, Turkey, South Africa, America, the UK, Japan,Holland, Belgium, Europe, Russia, Dubai and Canada give certificates mentioning the origin aswell as the specifications of the product being supplied.2.2 Availability, quality and price of raw materialsA large number of exporters and manufacturers dealing in rubber and assembly are notsatisfied with the availability of raw materials from local sources.Raw materials available for casting and components for assemblies are not of good quality and,in order to ensure premium quality, most raw materials and components are imported.The price of raw materials and components is very high. The prices of materials over the lastfew years have increased considerably.2.3 Technology and skilled labourNeither local nor imported rubber technology are easily available to new entrants and their costto acquire is very high. Skilled quality labour is also scarce and expensive. Entrepreneurs haveto invest a great deal in training.For casting and forging, local technology is not easily available and the quality of finishedproducts is not satisfactory. However, the prices of casting and forging are reasonable.Premium imported castings and forging are available in the market but they are extremelyexpensive. Skilled labour is a major issue; despite being of poor quality, labour rates are veryhigh.Stamping technology is locally available at reasonable cost but the quality of the diesmanufactured as well as their cost is not satisfactory. Skilled labour is available at reasonablecost.Assembly technology is easily available locally and is of good quality. The costs of fabricatingthe equipment for assembly line as well as labour rates are satisfactory.2.4 Export marketsCountries to which companies are exporting autoparts are the USA, Italy, the UAE, Sri Lanka,Spain, Bangladesh, Malaysia, England, Brazil, Germany, Poland, Turkey and Europeancountries.International Trade Centre Page 19
Page 1 and 2: The Automotive Parts Sectorin Pakis
Page 3 and 4: AcknowledgementsThe report was prep
Page 5: AbbreviationsACGRAMCBUCIFCKDCNGCSFE
Page 8 and 9: 4 Obstacles and shortcomings to exp
Page 10 and 11: viii
Page 12 and 13: RecommendationsChapter 6 of the rep
Page 14 and 15: Implications of the WTO AgreementsT
Page 16 and 17: Page 6International Trade Centre
Page 18 and 19: • Recommendations aimed at indivi
Page 20 and 21: 2.1.2. Structure of the automotive
Page 22 and 23: Table 2.1 Automotive assembly produ
Page 24 and 25: Assemblers*Make and modelAnnual pla
Page 26 and 27: Assemblers*Make and modelAnnual pla
Page 30 and 31: 2.5 Price trends of raw materials a
Page 32 and 33: These units efficiently manufacture
Page 34 and 35: Table 2.5 Autoparts from China - My
Page 36 and 37: on the road, highly unsuccessful ve
Page 38 and 39: 2.12 Classification and trade of au
Page 40 and 41: Figure 2.4 Pakistan’s automotive
Page 42 and 43: HScodeCategoryDescription841330 Eng
Page 44 and 45: HScodeCategoryDescriptionValue US$
Page 46 and 47: HScodeCategoryDescription842199 Eng
Page 48 and 49: Tyres/Rubber 2001 2002 2003 2004 20
Page 50 and 51: Tyres/Rubber 2001 2002 2003 2004 20
Page 52 and 53: the 21 st , 24 th and 32 nd respect
Page 54 and 55: Table 2.12 Tariffs in export market
Page 56 and 57: Korea, Germany, Spain and US are th
Page 58 and 59: HS code Product description MFN dut
Page 60 and 61: • Dependent on import raw materia
Page 62 and 63: • To represent the members and al
Page 64 and 65: 3 Implications of WTO Agreements3.1
Page 66 and 67: 3.1.5 Focus on trade in goodsIn thi
Page 68 and 69: Figure 3.2 Upward and downward info
Page 70 and 71: On the other hand, some entrepreneu
Page 72 and 73: certain situations only. The degree
Page 74 and 75: Box 3.2 Regional Trade Agreements (
Page 76 and 77: • The right to prevent others fro
Page 78 and 79:
As the LCR has been withdrawn, the
Page 80 and 81:
protect human, animal or plant life
Page 82 and 83:
Relevance to the automotive parts s
Page 84 and 85:
unweighted (i.e. simple) average st
Page 86 and 87:
the member countries. The Governmen
Page 88 and 89:
• The Government should make poli
Page 90 and 91:
Marketing• Market research• Fai
Page 92 and 93:
Bilateral trade committeesA large n
Page 94 and 95:
5.3 Export services as they should
Page 96 and 97:
The services offered by SIPPO are v
Page 98 and 99:
• Individual companies need to ma
Page 100 and 101:
effective networking at their indiv
Page 102 and 103:
• Giving specific training for th
Page 104 and 105:
Page 94International Trade Centre
Page 106:
The study will conduct a comprehens
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