Initially nurtured in the difficult terrains of the Khyber Agency where it was set up in 1960, the Al-Haj Group is currently engaged in logistics and transportation, including hauling liquid bulk cargo, as well as in auto assembly, tyres, and textile businesses.

The most recent addition to the group is that of the flagship Al-Haj FAW Motors Pvt. Ltd (AHFML), which has an automobile assembly plant that simultaneously rolls out heavy duty trucks and light vehicles.

Another subsidiary, Al-Haj Tankers, imports diesel and oil form the Middle East for export to Afghanistan.

AHFML was incorporated as a private limited company in 2006, with its promoters contributing 100pc of the Rs2bn investment. The group’s chairman, Haji Shah Jee Gul Afridi, is an independent MNA from Fata, and his brothers are partners in the business.

Hilal Khan Afridi, AHFML’s CEO, told this writer in his automobile assembly plant office on the main National Highway, Zulfiqarabad, that his group entered into a distribution licence agreement with FAW, China, in 2006.

FAW (First Automobile Works) manufactures a wide range of vehicles, catering to the needs of all segments of transportation, including passenger cars, and was founded by Chairman Mao Zedong in 1953.

Initially, the Al-Haj group introduced FAW’s heavy duty trucks as completely built up (CBU) units. After receiving good response from transporters, the range of trucks was increased to cater the needs of all segments of cargoes, and included medium and light duty commercial vehicles.

The AHFML says it is the only automobile company to have benefited from the new Automobile Industry Development Policy, under which investment in the sector is restricted to equity financing and foreign direct investment

The prompt and positive response from the market encouraged AHFML to enter into a technical licence agreement with FAW to produce the vehicles in the country. Mr Hilal Afridi said buyers were given the option to select from other than the few existing brands being marketed for the past many years.

He disclosed that AHFML is the first and only automobile company that has so far benefited from the new Automobile Industry Development Policy (AIDP). Under this policy, the government has allowed investment in the industry through only equity financing and foreign direct investment, with no debt financing. Therefore, his group executed the venture on the basis of equity financing, he added.

The foreign qualified, young and enigmatic Hilal Khan Afridi is the son of Haji Shah Jee Gul Afridi. He said the first heavy duty truck rolled out from his plant in October 2011. The state- of- the- art plant is spread over 25 acres and has the capacity to produce 12,000 to 15,000 units annually. The plant has separate facilities to produce FAW’s heavy commercial vehicles, light commercial vehicles and passenger cars. Only last month, it introduced a new 1.3 litre hatchback, V-2.

Due to strong technical support from FAW engineers, he said, the group managed to roll out small vehicles the very next year (2012). Afridi added that “the success of our automobile brand can be attributed to our efficient after sales service. Ours became the second biggest brand in a short period of 6-7 years”.

The group has also established a dealership network throughout the country, with emphasis on the 3S (sales, service and spare parts) for all categories of vehicles.

The AHFML CEO claimed that his company’s current share in the truck market is around 30-35pc. However, he said, the total domestic market demand for heavy trucks has dropped to 2,000 units per annum, from over 4,000 units in 2008-9.

Afridi criticised the government’s policy of allowing the import of used sprinkler trucks, which, he said, is being widely misused because importers are importing up to 15-20-year-old trucks. Most of these old trucks first reach Dubai, where they are fixed with sprinklers, and then imported here.

And these trucks are used in all segments of commercial vehicles for hauling dry and liquid bulk cargo. The automobile industry has taken up the issue at different official forums, but still awaits a positive response, he regretted.

Once these old and used trucks come on the roads, they cause a huge loss of up to Rs50bn per year to the country’s economy by way of breakdowns and roadblocks. He demanded an immediate ban on the import of sprinkler trucks.

By doing so, he said, the auto industry will be revived and grow and provide jobs to the skilled and semi-skill workforce.

Responding to a question, Afridi said the auto industry has a big potential in Pakistan because of the country’s large population and vast land territory. He also wondered that with a population of 200m, the annual demand for vehicles is around 150,000-175,000 units only. Against this, neighbouring Iran, with a population of 80m, has annual demand of around 1m vehicles.

Published in Dawn, Economic & Business, December 22th , 2014