Car Production Declined By 55% In Jul-Jun ’22-23

The automotive industry in Pakistan is still seeing a huge decline in production. According to the latest report by Pakistan Automotive Manufacturers Association (PAMA), production has plummeted by 55% in the past year, and there are no signs of improvement soon. The countless non-production days observed by several car manufacturers in Pakistan indicate poor economic conditions. 

Latest Production Numbers

All types of vehicles faced a decline in production except buses. These are the figures released by PAMA.

The Reasons Behind Decline

Several factors contribute to this decline, including the government’s ban on the import of raw materials, the depreciation of the Pakistani rupee, inflation, and economic instability.

The government banned the import of raw materials into the country, making it difficult for manufacturers to obtain the necessary parts to build cars, trucks, and motorcycles. This has led to a decline in production and a shortage of vehicles on the market.

The depreciation of the Pakistani rupee was a cherry on top and has made imported vehicles more expensive, which has led to a decline in demand. Inflation has also made it difficult for people to afford to buy new cars. A lot of cars are now out of reach of the middle-class consumer. And economic instability has created uncertainty about the future, which has led to a decline in investment in the automotive sector. Being the 15th largest car manufacturer in the world, Pakistan is losing its stability in the market and falling behind.

The consequences of this decline are far-reaching. The automotive industry is a major employer in Pakistan, with over 2 million employees and a significant 5% contribution to the GDP. The dismal situation has led to several layoffs in the past year and is only a sign of things to come. The decline in production is also having a negative impact on the economy as a whole, as it is reducing government revenue and discouraging foreign investment.

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