Business

‘Five companies to compete in auto sector’

New automotive policy focused on providing timely delivery of vehicles to consumers

APP March 22, 2016

Pakistan Economic Forum Chairman Humayun Iqbal Shami said the automotive policy is crucial to increasing competition in the local market. PHOTO: FILE

ISLAMABAD: In a veiled attempt to convey that there could be two new auto industry players, Board of Investment Chairman Dr Miftah Ismail said that there would now be five companies to manufacture cars and competition is likely to reduce prices.

Speaking to Radio Pakistan, Ismail said that the Automotive Development Policy was geared towards providing cheaper cars to consumers as well as ensure timely delivery of vehicles.

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He said that the government was working to constitute an organisation to monitor the quality of car engines, and they had also reduced taxes on imported cars. The prices of spare parts for buses and trucks have also been reduced, he added.

“This will motivate the local manufacturer to produce quality cars. Otherwise, people will have the option of imported cars.”

Pakistan Economic Forum Chairman Humayun Iqbal Shami said the automotive policy is crucial to increasing competition in the local market. “Cars are going out of range for the common man due to their high prices,” he added.

According to the new policy, after the consumer has paid, the company is bound to deliver the car within two months. This would lead to competition and better quality as Pakistan has the capacity to locally manufacture automobiles, Shami added.

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Economist Dr. Saboor Ghayur reiterated that the policy would enable new entrants to establish their units and effectively compete with the three well-entrenched assemblers.

“Pakistan can also export its products through this policy, which would create employment opportunities. “This would also increase the country’s GDP and generate revenue. Our economy will strengthen as there is demand on a large scale.”

Published in The Express Tribune, March 23^rd, 2016.

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COMMENTS (10)

Desi | 8 years ago | Reply Thank God, i will be able to some new cars on the road. By the way I wish Ford comes to Pakistan.

Faro | 8 years ago | Reply Finally monopoly of pak suzuki is ended. Thats a good sign because even the most cheap of the cheapest car in the world is billion times better than the cars produced by Pak Suzuki motors. I doubt Pakistanis will ever buy a mehran or any other substandard pak suzuki car. Thmbs Up Govt for this excellent decision .

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Zain - USA | 8 years ago | Reply Agree with Curious 2, the focus of the Auto policy should be export driven market. That is how the Japanese Auto Companies thrives and succeeded, to this day, they depend on Automobile exports as their National Policy. Japan Exports more than 50% of the cars they produce, they are ahead of everyone, as they have entrenched themselves in several key markets like US, by 100% manufacturing cars in US for American Market. They do the same in EU, Asia, etc. So, Automobile industry should be Export focused. That is what other Car Making Industrialized / Emerging countries, like China, India, Indonesia, Malaysia, Thailand, Turkey, Iran, etc. are doing. India started out same as Pakistan, and actually Suzuki Assembly plant was built in Pakistan before it was built in India, but look where is Suzuki/Maruti of India is now, and Pakistan Suzuki is still assembling nearly the same cars they started out in 1980s with. Completely Paralyzed Auto Industry in Pakistan, not beneficial at all. The 3 Auto Assemblers Mafia need to be disbanded completely, and new 100% Made in Pakistan focused Players need to enter, be it with China's Help or Europe's help. There are many willing Auto Makers that can play a better role than the corrupted Local/Japanese Auto Assemblers Mafia that exists in Pakistan currently.

curious2 | 8 years ago | Reply The goal should be to produce cars for export not just domestic consumption - that's where the real volume/money/jobs is. Mexico makes over 400 models of cars - vast majority for export to other countries.

syed & syed | 8 years ago | Reply Is Pakistan's fate is linked with kick backs. Real change and lower price depends of locally manufactured at least 60% parts of any automobile. Assembling is not the answer

Azmat Ali | 8 years ago | Reply I hope Hyundai and / or KIA take the opportunity to come to Pakistan. Their current products in the international market are world class and at decently discounted prices, even in such competitive markets as North America.

Ehs | 8 years ago | Reply We have 3 firms but they are not exactly is direct competition and in fact. Paksuzuki is the only car assembler so in small passenger cars. Honda City is subcompact while corolla/civic are compact. They are all focusing on different segments of the market. (Only corolla and civic overlap) If two more players enter obviously it will create competition which will benefit all.

Usman | 8 years ago | Reply @Shakil Ahmed: Absolutely true. They simply introducing other car manfacturers to the game they play in Pakistan, kickbacks. If other manufacturers agree to pay-off ppl like Miftah and sundry, they can have the slice of the pie. This doesn't mean any car manufacturer can compete. Complete and utter lack of transparency.

Shakil Ahmed | 8 years ago | Reply @Israr: dont count in sincerity of Mitfah and lot, uptil now its always kickbacks decide what policy government applied. Cartel of 3 or dealers association kept bribing governments! So even they have allowed new entrants that will not be truely transparent if you consider who will the local partner in Pakistan of new brands! That will reveal what made government to act against current lot :)

Israr | 8 years ago | Reply Currently we have a cartel of 3 car manufacturers who are ripping off Pakistanis with complete impunity from the government. Can dear Miftah enlighten us why the 3 companies have been allowed over the years to sell us mediocrity at high prices? Also, why should you assume the new companies wouldn't follow the same practice? For me, the new policy only means there will now be cartel of 5 companies instead of the long surviving 3.

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