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The Automobile Industry

The advent of the automobile


In 1860, Jean Joseph tienne developed the first practical internal combustion engine. In the following
decade, several notable inventors like Karl Benz and Gottlieb Daimler, created gas-powered vehicles that
began to dominate the industry with their light weight and cost-effective build. French companies began
the trend of placing the engine over the front axle in the 1890s, while US manufacturers introduced cars
with interchangeable machine-produced parts.
Henry Ford started using assembly line manufacturing for mass production of automobiles in 1914. He
also provided loans to customers to buy cars in 1915, making the Ford Model T affordable for the middle
class. In the 20s, General Motors innovated to make cars more popular among the masses. They were
the first to think about making different cars to cater to varying income brackets, e.g. the Cadillac for the
elite, and the Chevrolet for others.
Today, major companies all over the world mass produce automobiles, and it is one of the worlds most
lucrative businesses. The following is a list of 10 big players with considerable market share around the
globe.

World Players
1. SAIC Motors
With a market value of $26.7 billion, and a profit of $3.3 billion, SAIC Motors is the leading
Chinese automobile manufacturer.

2. General Motors
Despite not always being in the best of shape, General Motors remains in a commanding
position as an automobile manufacturer with a profit of $6.2 billion and a market value of $38.5
billion.
3. Hyundai Motors
Putting affordability and quality in the same sentence, Hyundai boats a profit of $7.6 billion,
with a market value of $41.5 billion.

4. Nissan Motors
With a strong stake in Asias emerging economies, Nissan earns a profit of $4.1 billion, and
enjoys a market value of $43.4 billion.
5. Ford Motor Company
An American automobile giant, Ford makes a profit of $5.7 billion, with a market value that is no
less than $51.8 billion.

6. BMW Group
One of the worlds best known brand names, BMW has market value of $60 billion and makes a
profit of $6.6 billion.

7. Daimler Motor Company


Manufacturer of another one of the worlds best known cars, the Mercedez Benz, Daimler has a
market value of $61.4 billion, and a profit of $8 billion.

8. Honda Motor
With a profit of $2.6 billion, Honda continues to do very well with major success coming from its
Honda Civic and Honda City brands. It has a market value of $72.4 billion.

9. Volkswagen
One of the oldest automobile brands, Volkswagen has a market value of $94.4 billion and makes
a profit of $28.6 billion.

10. Toyota Motor Corporation


From hatchbacks to SUVs, Toyota does it all- and does it well. Making a profit of $3.4 billion,
Toyota has a market value that is a whopping $167.2 billion.

Pakistans automobile industry


Pakistan produced its first vehicle in 1953, through National Motors Limited, established to manufacture
Bedford trucks in Karachi. The same plant manufactured buses, light trucks, and cars. The industry,
highly regulated until the 90s, became flooded with Japanese manufacturers, with HINO trucks, Suzuki,
Toyota, and Honda, among others.

Despite significant production volumes, transfer of technology and localization of vehicle components
remains low, and only a few car models are assembled in Pakistan, while customers have little to choose
from. The lack of competition in the local auto industry has resulted in technological stagnation of the
industry. Small cars produced by Pak Suzuki, the country's largest auto assembler, in the country are
globally retired models utilizing obsolete technology and not offering any safety features. However,
some of the major world automakers have set up assembly plants or are in joint ventures with local
companies, including Toyota, General Motors, Honda, Suzuki, and Nissan Motors. The auto industrys
contribution to GDP in 2007 was 2.8% which is likely to increase up to 5.6% in the next 5 years. The auto
sector presently contributes 16% to the manufacturing sector which is predicted to increase 25% in the
next 7 years.

During the years 2006-2007, car sales peaked to 180,834, courtesy a major increase in car financing by
banks because of low interest rates and rising rural buying. In recent years, as a result of inflation and
high oil prices, the price of cars, along with maintenance costs have gone up for the average consumer.
Many cars in the country have dual fuel options and run on CNG which is more affordable and cheaper
than petrol in the country.

The following is a list of three of the biggest players in Pakistans automobile industry.

Pakistans Players
1. Pak Suzuki
When it comes to the small-car segment in Pakistan, Pak Suzuki possesses an almost monopoly-
like market share. Since the discontinuation of the Daihatsu Cuore, manufactured by Indus
Motors, Pak Suzuki has lost its only serious competitor.
Pak Suzuki enjoys a massive 49% market share in the Pakistani market.

2. Honda Atlas Motors


Manufacturers of the widely used Honda Civic and Honda City sedans in Pakistan, Honda Atlas
Motors tends to have a loyal customer base. It is met with little competition apart from the
Nissan Sunny and the Toyota Corolla. However, due to their narrow range of cars, they have the
least market share among the three.
Honda Atlas has a market share of 13%.

3. The Indus Motor Company Limited


Producing the 6 versions of Pakistans favorite sedan, the Toyota Corolla, the Indus Motor
Company is one of the largest and most successful of its kind in the country. It also
manufactures the Toyota Hilux SUVs and trucks, and previously, the Daihatsu Cuore.
Indus Motors has a very large market share of 38%.
Note: All market shares are of the Pakistani Automobile Industry and are up-to-date as of 2012.

Shehroze Rizwan Moosa


Neha Akbar Baig
Abdullah Quresh Abdullah