Can Changan dazzle Pakistanis into buying Chinese cars?

'The automobile is an expensive commodity - a consumer durable you don't forget buying for the rest of your life. You have your house then you have your car. And just like a house, you have a lot of expectation from your car. It is your status symbol. You drive it everyday. It has hundreds and thousands of moving parts all working in tandem such that it can either be a delight or a nightmare' says Danial Malik.

Danial is a man that understands the importance of a car. He knows how integral it is, just how pervasive its presence can be in a person's life, and just how much people care. He is by no means a raving petrolhead, but he has an appreciation for the more romantic aspects of automobiles. This connection and understanding to cars will help him in what he is setting out to achieve, for Danial is the CEO of Master Motor Limited, a joint venture between Master Motor Corporation and Changan International Corporation with a 70:30 equity partnership. And with this, he wants to bring Chinese cars into Pakistan to compete with the existing, established Japanese brands.

Masters of industry

Master Motor Limited, of course, is part of the Master group, best known for their Molty Foam mattresses which were put into the market by Danial's grandfather, Malik Riaz, back in 1963. One is naturally taken aback of course, few people know just how extensive the Master group is beyond their mattress business. Master Enterprises, under the banner of which Danial's grandfather sold Molty Foam mattresses, was a joint venture with Bayer A.G. of Germany to manufacture foam mattresses in Pakistan. The term 'Molty Foam' soon enough became the household shorthand for mattress. But the group's exploits were far from over, and it went to new heights after when Riaz Malik's three sons Naveed Malik, Najeeb Malik and Danial's father Nadeem Malik took the company's reins in their hands. Over time, the group further diversified into textile, chemical, engineering, power, retail and furniture sectors successfully. Now, with the third generation of the family involved in the business, the group has 16 manufacturing facilities all over Pakistan with distribution and supply chain network throughout the country. According to Danial, the Master group directly employs 20,000 people.

But their involvement in the automobile industry is one that can be traced right back to their initial beginnings as a mattress company. The group entered the industry in the most innocent of ways - making car seats. Four years later, they had made inroads into the textile industry and has furnished most of its need for seat covers from there. During a visit to the Master group's autopart facility, Procon Engineering, one can see seats being made for Toyota's Fortuner to Suzuki's Mehran. The same is true for Honda at its Lahore's facility. Our guide at the Procon Engineering, Amanullah, explained that the group has integrated over decades from making foams to sit and sleep on, and then entered the auto industry. At Procon Engineering, other metal based auto-parts are also made. Today, the group has two automotive plants located in Karachi with an annual production capacity of 740 buses, 9000 trucks and 30,000 passenger vehicles.

China throws its hat in the ring:

When you think China, you think communism, and dragons and Kung Fu and maybe Pandas. You don't think cars when you think China. Cars are supposed to be made in Japan or Germany, not China. Or so you'd think. China is in fact the biggest automotive market in the world, producing a whopping 30 million units per annum. Within China, Changan is the largest automotive brand - producing 2.8 million vehicles a year, more than ten times Pakistan's total car production.

The reason more Japanese and South Korean brands are seen globally is that the market dynamics of these countries are vastly different to China. They have small domestic demand...