Automotive industry in Pakistan

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The Pak Suzuki Mehran is Pakistan's most produced car.

The automotive industry in Pakistan (Urdu: پاکستان کی گاڑی صنعت‎) is the one of the fastest growing industries of the country, accounting for 4% of Pakistan's GDP and employing a workforce of over 1,800,000 people.[1] Currently there are 3200 automotive manufacturing plants in the country, with an investment of 92 billion (US$870 million) producing 1.8 million motorcycles and 200,000 vehicles annually. Its contribution to the national exchequer is nearly 50 billion (US$470 million). The sector, as a whole, provides employment to 3.5 million people and plays a pivotal role in promoting the growth of the vendor industry. Pakistan’s auto market is considered among the smallest, but fastest growing in South Asia. Over 180,000 cars were sold in the fiscal year 2014-15, rising to 206,777 units fiscal year 2015-16.[2][3][4] At present, the auto market is dominated by Honda, Toyota and Suzuki. However on 19 March 2016, Pakistan passed the "Auto Policy 2016-21", which offers tax incentives to new automakers to establish manufacturing plants in the country.[5][6] In response, Renault-Nissan, Kia Motors, Audi, Volkswagen[7] and Hyundai[8] have expressed interest in entering the Pakistani market.[2][9] Pakistan has not enforced any automotive safety standards or model upgrade policies. Obsolete vehicles including the Mehran, Bolan, and Ravi continue to be sold by Pak Suzuki.[10]

History[edit]

1950s[edit]

Pakistan produced its first vehicle in 1953 at the National Motors plant in Karachi, according to the Ministry of Industries & Production. The plant was opened in conjunction with General Motors who arranged the facilities for the production of Vauxhall cars and Bedford trucks. Subsequently, buses, light trucks and cars would be assembled at the same plant. In the same year, Ford trucks partnered with Ali Automobiles where they introduced Ford Anglia, Ford pickups and the Ford Kombi. Exide Pakistan also began production of car batteries in 1953. Haroon Industries partnered with Dodge Motors in 1956.[11]

1960s[edit]

In 1961, Allwin Engineering introduced precision auto parts to the Pakistani auto market. In 1962, Lambretta partnered with Wazir Ali Engineering to begin production of the Lambretta TV200 scooter while Kandawala Industries introduced Jeep CJ 5, CJ 6, CJ 7. In 1963, General Tyre Pakistan began production in Karachi while Hye Sons began production of Mack Trucks. In 1964, Rana Tractors began producing Massey Ferguson Tractors while the famous Vespa scooter and rickshaw were introduced by Raja Auto Cars. In 1965, Jaffer Industries and Mannoo Motors began operations.

1970s[edit]

The 1970s saw nationalization of many companies. In 1972, the Pakistan Automobile Corporation or PACO was formed. Many companies were bought out or merged into others. Wazir Ali Engineering was renamed to Sindh Engineering, Ali Autos to Awami Autos, Haroon Industries to Republic Motors, Ghandara Motors to National Motors, Hye Sons to Mack Trucks, Kandawala Industries to Naya Daur Motors, Jaffer Industries to Trailer Development Corporation and Rana Tractor to Millat Tractors. Dawood Yamaha introduced Yamaha motorcycles in 1974 and in the same year Beta Engineering started producing diesel engines. In 1976, Suzuki Motor Cycles launched by Sindh Engineering. Saif Nadeem Kawasaki launched Kawasaki motorcycles in 1977 while Suzuki Jeep was manufactured by Naya Daur Motors.

1980s[edit]

In 1980, Awami Motors began manufactured Suzuki pickups while Sindh Engineering began producing Mazda Trucks. In 1981, Agriauto Industries introduced production of local auto parts while in 1982, Suzuki began production of vehicles. In 1983, the Vendor Development & Technical Cell or VDTC was formed along with Al-Ghazi Tractors which was introduced by Fiat. In 1986, Hinopak Motors began as a joint venture between PACO, Al-Futtaim, Hino Motors & TTC. In 1987, Ghandara Nissan began production of Nissan Diesel Trucks. In 1989, Pakistan Association of Auto Parts & Accessories Manufacturers began operation.

1990s[edit]

The industry was highly regulated until the early 1990s. Following deregulation, the decade witnessed a huge boom in auto production, as nationalization was abandoned in favor of privatization. Japan acquired the 40% shares of Pak Suzuki in 1991. In 1993, the Indus Motor Company began production of Toyota Corollas. In 1994, the Pakistan Automotive Manufacturer Association formed, and Honda Atlas introduced manufacturing of the Honda Civic. In 1995, the Engineering Development Board inaugurated the PAP show.

2000s[edit]

From 2001 -02, One Dealer of bikes namely SITARA AUTO IMPEX, AKBAR ROAD, SADDAR, KARACHI started import of CBU Chinese bikes and also Local assembly of CD70CC bikes in Karachi, after that someother Pakistani importers started import of Chinese CBU bikes in Karachi, due to custom duty cut by Finance minister Shaukat Aziz after 2 decades and Chinese firms also made copy of small Japanese bikes especially famous of HONDA CD70, in the Same period 5 Karachi based units start local assembling of CD70 Replica these were GUANGTA SITARA, ROCKET, JINAN, SUPER STAR, & STAR. In the year 2006 near about 33 bike assemblers are assembling 70cc Bikes, Market Leader created hurdles for them and thay arranged there Association namely APMA , Association of Pakistan Motorcycle Assemblers, and Mr Muhammad Sabir Shaikh, elected Chairman of the APMA. From 2002 to 2007, auto sales reached record sales year after year, reaching a peak of 195,688 sales in 2007, thanks to rising car financing up to 70-80% by banks and low interest rates coupled with rising rural purchases. From 2007 to 2009, the auto sector witnessed reduce sales amid high interest rates and Yen appreciation against the Rupee. In 2007, the automotive industry made up 2.8% of Pakistan's GDP and contributed 16% to the manufacturing sector. The 2000s also saw the introduction of dual fuel options to run both on Petrol and CNG, which is more affordable and cheaper than petrol in the country.

2010-present[edit]

From 2010, many small auto units of bikes closed due to stiff competition between the Assemblers but still some Assemblers applied for the approvel to start assembly, Currently 3 Japanese, and 7 Chinese Assemblers are making profits 40 + units are not in good position. In 2010 the sales rebounded and began increasing again. The auto industry predicted a growing demand in Pakistan and invested over Rs20 billion during this decade. Motorcycle production hit a record level of over 1.5 million units in 2010-2011. Last fiscle year 2016-17 Pakistan produced record 2.5 million bikes in a year. In 2015, the Auto Policy 2016-21 was introduced, to help introduce new entrants into the Pakistan auto industry, which has traditionally been dominated by Honda, Toyota and Suzuki. The auto industry remains the second largest payer of indirect taxes after the petroleum industry in Pakistan. At present, there are 10 cars for every 1000 people in Pakistan. This is one of the lowest ratios among emerging economies, which itself speaks of high potential of growth. Rising per capita income with changing demographic distribution and an anticipated influx of 30 to 40 million young people in the economically active workforce in the next decade will provide a stimulus to the industry to expand and grow[12]

Historical production by year[edit]

Automobiles[edit]

Historical production by year (Automobiles)[13]
Year Production
1992
66,000
1993
76,000
1994
61,000
1995
44,000
1996
78,419
1997
41,585
1998
43,519
1999
46,761
2000
39,117
2001
46,538
2002
48,579
2003
74,274
2004
112,550
2005
150,016
2006
189,639
2007
195,688
2008
186,064
2009
100,468
2010
137,415
2011
153,114
2012
175,184
2013
134,849
2014
148,746
2015
229,686
2016
274,536

Motorcycles[edit]

Historical production by year[14]
Year Production
1996
106,797
1997
92,978
1998
87,504
1999
86,959
2000
108,850
2001
120,627
2002
175,169
2003
303,383
2004
416,189
2005
520,124
2006
467,267
2007
660,593
2008
509,054
2009
736,861
2010
838,665
2011
828,576
2012
819,556
2013
771,507
2014
1,131,196
2015
1,362,096
2016
1,632,965

Manufacturers[edit]

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References[edit]

  1. ^ https://propakistani.pk/2015/08/12/automotive-industrys-contribution-to-pakistan-infographic/
  2. ^ a b "Automobile industry: Pakistan woos Renault-Nissan in investment push - The Express Tribune". The Express Tribune. 2016-05-07. Retrieved 2016-11-15. 
  3. ^ "Car sales continue to shoot up - The Express Tribune". The Express Tribune. 2016-02-12. Retrieved 2016-11-15. 
  4. ^ "Pakistan auto industry rides a high". Business Recorder. Retrieved 2016-11-15. 
  5. ^ boi.gov.pk/userfiles1/file/AutoPolicy/AP.pdf
  6. ^ "Auto policy approved, door wide open for new entrant - The Express Tribune". The Express Tribune. 2016-03-19. Retrieved 2016-11-15. 
  7. ^ https://tribune.com.pk/story/1325911/volkswagen-set-launch-two-new-vehicles-pakistan/
  8. ^ https://www.bloomberg.com/news/articles/2017-02-03/hyundai-motor-plans-pakistan-venture-with-billionaire-mansha
  9. ^ "Audi AG expresses intent to assemble vehicles in Pakistan - The Express Tribune". The Express Tribune. 2016-11-15. Retrieved 2016-11-15. 
  10. ^ "Auto industry enjoys unequaled run of success - In Motorcycles the famous model in Pakistan is HONDA CD70, and Replica of CD70, more than 50 Assemblers are also still assembling 70cc same model in Pakistan and providing these bikes in Lower prices to bike users, Mr Muhammad Sabir Shaikh, Chairman Association of Pakistan Motorcycle Assemblers APMA, and CEO, of SITARA AUTO IMPEX, Karachi, is the man who changed the history of Pakistans Auto Sector, www.motorcycleexport.com The Express Tribune". The Express Tribune. 2016-02-08. Retrieved 2016-11-15. 
  11. ^ https://www.ukessays.com/essays/management/the-economy-and-automobile-industry-of-pakistan-management-essay.php
  12. ^ "Automark Magazine". www.automark.pk. 
  13. ^ http://www.pama.org.pk/images/stories/pdf/test.pdf
  14. ^ http://www.pama.org.pk/images/stories/pdf/test.pdf

External links[edit]