Pakistan Auto industry enjoys incomparable success

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Pakistan Auto industry

Pakistan Auto industry has been blooming in Pakistan since last two years. It has continuously been recovering from the lows of 2008-09 when 99,310 units were sold to an impressive 179,953 in fiscal year 2015. Last year’s December has probably been the best closing month in the continuation of the progressive momentum.

Pakistan auto industry is expected to grow like last year until June and then go beyond in the remaining calendar months, unless inflation sets in the economy, even though Pakistan’s economy is only slightly exposed to the world markets.

Some new models are expected to be launched in 2016 to keep the growth steady. Others not launching new models will have to modify and upgrade the existing models to compete. At least one new car in the small car range or one new model is expected to be introduced.

The year 2016 could have been more productive if the ill-famed Automotive Industry Policy (AIP), which is still not being launched. The last plan expired in 2012. Work on the new five-year plan started in 2011, and it has been 5 years since then. People involved actually do not realize the economic benefits of a thriving automotive industry.

The Engineering Development Board (EDB) will continue striving to improve the safety structures in vehicles, but in order to make it a success Pakistan Standards and Quality Control Authority (PSQCA). With Pakistan becoming an “observer” member of WP.29, some steps towards standardisation are expected during the year.

The United Nations Economic Commission for Europe (UNECE) World Forum for Harmonization of Vehicle Regulations (WP.29) is a unique worldwide regulatory forum which provides the legal framework allowing Contracting Parties (member countries) attending the WP.29 sessions to establish regulatory instruments concerning motor vehicles and motor vehicle equipment.

On-board electronics also has a greater role after model and pricing specially among the youngsters. Connectivity and electronics should also be user friendly.

Digitisation will also play an important role in the supply chain and sales process. Baby steps will be taken by original equipment manufacturers (OEMs) for digital marketing, which will become more pronounced with each passing year. Auto part makers, especially those with after-market service ability, would be following suit.

The 2-wheelers sales seem to have increased.

For mobility and independence in urban areas and large population areas need to increase 2 wheeler’s sale.

On the other hand, Pakistan auto industry future’s for growth in 2-wheeler’s sale in rural region seems low. With large parts of rural economy still dependent on agriculture, the rural market has suffered due to low productivity and depressed prices in the agricultural sector.

Trucks and buses have grown in the last 2 fiscal years, but they are sitting at numbers lower than the numbers in the seventies.

More truck models are due to be introduced by Dong Feng and Sinotruk, rather than by local assemblers. Shehzore brand is also expected to be revamped by the Dewan group, though it is not clear who they will be partnering up with.

CPEC and Pakistan having accepted the TIR convention, the trucking volume will grow and the industry must prepare in 2016 to be a worthy player, otherwise trucks from other countries will ride on our roads.

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