Auto industry’s future bright as more players enter
car manufacturing auto industry. PHOTO: AFP
Owing to the gradual opening of economic activities after the Covid-19 pandemic and contingency measures coupled with the vaccination drive, Pakistan witnessed a significant increase in both production and sales of passenger cars in financial year 2021-22.
According to the statistics of Pakistan Automotive Manufacturers Association (PAMA), Pakistan produced 226,433 passenger cars in 2021-22 with sales volume of 234,180 units, up about 49% and 55% from 151,794 and 151,182 units respectively in 2020-21.
Industry insiders believe that the future of Pakistan’s auto industry is bright as more international players enter, bringing advanced equipment and technology.
However, due to economic conditions such as inflation and power shortages, import restrictions and natural disasters, they pointed out, production and sales growth would slow or even decline in the current fiscal year.
They stated one of the most important factors determining the continuous and high growth of local automobile production is the perfect supply of spare parts.
According to the Pakistan Economic Survey 2021-22, during July-March FY22, large-scale manufacturing (LSM) registered a growth of 10.4% against 4.24% growth in the corresponding period of last year. Automobile remained one of the top performing sectors of LSM. There are multiple reasons for the increase in car production and sales.
Mobile World Editor Sohail Nasir said, in a recent interview, the entry of Chinese automotive companies has contributed significantly to the landmark production of Pakistan’s automotive industry. He cited the excellent performance of Chinese car brands such as Changan, Chery, MG, Changcheng and DFSK, which continue the Chinese legacy, generating their share in the market.
Engineering Development Board (EDB) General Manager (Policy/ Admin/ Coordination) Engr Asim Ayaz underlined that Pakistan’s government has announced Automobile Industry Development and Export Plan (AIDEP) 2021-26 to encourage local manufacturing of vehicles.
“More and more enterprises that need to go abroad are realising Pakistan’s unique location and labour advantages,” Ayaz added.
“China, as Pakistan’s all-weather strategic partner, shares a border with our country and has stable policies to ensure that the supply chain will not be disrupted. The growing presence of Chinese companies has played a catfish role in invigorating Pakistan’s car market.”
On August 14, the first locally produced electric car was launched through the collective efforts of Dice Foundation, universities and the private sector in Karachi.
Pakistan’s first ultra-rapid DC charging station for electric vehicles was inaugurated in Karachi two months ago.
Dice Foundation Chairman Dr Khurshid Qureshi said the revolution of electric vehicles is making its way in the global auto industry and Pakistan has also taken the first step in this regard.
The recent rise in gasoline prices has led to a decline in demand for gasoline vehicles. In the long run, the most effective way to deal with climate change is to use new energy resources.
Pakistan is a country heavily affected by climate change, and the promotion of new energy vehicles is of greater significance to it.
China has a core advantage in developing electric vehicles and its companies have invested in Pakistan.
The article originally appeared on the China Economic Net
Published in The Express Tribune, September 3rd, 2022.
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