Pak­istan au­to­mo­bile sec­tor rides high de­mand

The Pak Banker - - 6BUSINESS - Staff Reporter

Pak­istan's auto sec­tor bright­ened up the na­tion's in­dus­trial scene this week. The sec­tor is up­beat with ris­ing car and ve­hi­cle pro­duc­tion, a huge quan­tity of state-of-the tech­nol­ogy spares and com­po­nents, a grow­ing num­ber of cus­tomers and easy bank fi­nanc­ing.

The Pak­istan Auto Show-2016, the 12th in its se­ries, was staged at La­hore. With in­creased pro­duc­tion ca­pac­ity and easy prices, de­mand is ris­ing fast. A large num­ber of cus­tomers are fac­ing three to four months' wait­ing pe­riod to get de­liv­ery of cars, in­clud­ing Toy­ota and Honda.

Mumshad Ali, chair­man, Pak­istan As­so­ci­a­tion of Au­to­mo­tive Parts and Ac­ces­sories Man­u­fac­tur­ers said: "As a re­sult of our high-tech and pro-con­sumer prod­ucts, the de­mand for au­to­mo­biles, com­po­nents and spare parts is ex­pected to rise over the next three to five years. We are com­mit­ted to all aspects, in­clud­ing pric­ing, styling, de­sign­ing, tech­nol­ogy, spac­ing, user ease and com­fort."

Ali said: "The an­nual rev­enue of lo­cal parts turnover is es­ti­mated at $4 bil­lion. The cur­rent ex­port turnover is $1 bil­lion. The ma­jor buy­ers for the Pak­istani auto parts in­dus­try are from the US, Europe, Turkey, Sri Lanka and Africa. China, Thai­land and Malaysia are the key coun­tries from which the auto parts in­dus­try im­ports its re­quire­ments. Syed Nabeel Hashmi, chief or­gan­iser, Pak­istan Auto Show, said over the years, the event has brought a paradigm shift to the sec­tor. To­day, a good re­sponse to the show in­di­cates the shift of pref­er­ences of pro­duc­ers and con­sumers to Pak­istan be­cause of its high-tech pro­duc­tion and high cal­iber work­ers and en­gi­neers.

Car sales in eight months ( Ju­lyFe­bru­ary) of fis­cal year 2016 rose 37.7 per cent com­pared to the like pe­riod of fis­cal year 2015, the Pak­istan Au­to­mo­tive Man­u­fac­tur­ers As­so­ci­a­tion said. Dur­ing this pe­riod, 121,934 cars were sold from 88,538 units in the like pe­riod of fis­cal year 2015.

"The govern­ment is clear­ing ways for new au­to­mo­tive as­sem­blers in Pak­istan. It means in­creas­ing com­pe­ti­tion in the in­dus­try," said Hashmi. Tariq Chaudhry, chief ex­ec­u­tive of­fi­cer of Pak­istan En­gi­neer­ing De­vel­op­ment Board, praised the role of the au­to­mo­tive in­dus­try. He said: "Pak­istan's au­to­mo­tive in­dus­try is play­ing a cru­cial role in strength­en­ing the na­tional econ­omy and el­e­vat­ing Pak­istan's im­age as a pro­gres­sive and mod­ern coun­try with a strong in­dus­trial base."

The in­dus­try feels en­cour­aged by the global ap­plaud it has re­ceived from 135 coun­tries and pro­fes­sional groups. Chaudhry said the govern­ment of Pak­istan is com­mit­ted to take all pos­si­ble mea­sures to en­cour­age large-scale in­vest­ments and en­hance the busi­ness­friendly en­vi­ron­ment for the au­to­mo­tive and en­gi­neer­ing sec­tors.

He added: "I con­grat­u­late our lo­cal in­dus­tri­al­ists and en­gi­neers who have had re­mark­able suc­cess in es­tab­lish­ing a so­phis­ti­cated en­gi­neer­ing sec­tor, which is cre­at­ing new op­por­tu­ni­ties for value-added ex­ports. Th­ese in­clude fully as­sem­bled cars, com­mer­cial ve­hi­cles and trac­tors, mo­tor cy­cles, spe­cial pur­pose ve­hi­cles, and all types of hitech com­po­nents and parts."

The in­dus­try and the govern­ment have been work­ing on de­tails of more in­cen­tives for the auto in­dus­try and new poli­cies for the auto in­dus­try at this week's meet­ing of the cab­i­net's eco­nomic com­mit­tee. But its chair­man and fi­nance min­is­ter Ishaq Dar said af­ter the meet­ing: "The in­ter-min­is­te­rial level meet­ing will fi­nalise its ad­di­tional pro­pos­als and ready the auto pol­icy for fi­nal­i­sa­tion."

The govern­ment has laid down five pol­icy ob­jec­tives for the auto in­dus­try: To fa­cil­i­tate higher vol­umes, more in­vest­ment, bet­ter qual­ity and the lat­est tech­nol­ogy; cre­at­ing a bal­ance be­tween in­dus­trial growth and tar­iffs; stim­u­lat­ing growth and stream­lin­ing trad­ing ac­tiv­i­ties; en­sur­ing con­sumer wel­fare, qual­ity, safety, choice and value for money and po­lice de­vel­op­ments, con­sis­tency, pre­dictabil­ity and re­view mech­a­nism.

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