Chinese automakers will not be affected by the rupee devaluation, significantly, and shall enjoy an edge over other carmakers (Japanese, Korean etc.) in Pakistan, as per the report by Express Tribune.
After the Auto Policy 2016-21, many new automakers, from around the globe, have entered into Pakistan, and some are planning to enter soon. The most substantial chunk of these companies is from China. The China-Pakistan Economic Corridor (CPEC) is another reason that a lot of Chinese auto companies are willing to come to Pakistan.
The Chinese automakers will have a significant advantage over its competitors in the country, because the imports have become expensive for other carmakers, comparatively, due to constant devaluation of the rupee against the Dollar. The rupee depreciation is not affecting the Chinese automakers as such, because both Pakistan and China have started using yuan and rupees for bilateral trade — in simple terms both the neighbouring countries are not using Dollar for trade, which is influencing the rupee.
“South Korean, Japanese and European companies would certainly struggle following rupee devaluation. Their CBUs (Completely Built Units) and CKDs (Completely Knocked Units) would certainly be more expensive.”
In the past seven months, the rupee has depreciated over 22% and is expected to weaken more against the Dollar in the future. On the contrary, the China-Pakistan have increased the sway of currency from 10 billion to 20 billion Yuan for the next three years, which is indeed good for the Chinese auto manufacturers.
A list of Chinese automakers, coming to Pakistan, is as below:
- Changan Automobile Limited
- JAC Motors
- Automobile Works (BAW)
- Shanghai Shenlong Bus Co Ltd
- Wuxi Shengbao Electric Vehicle Co Ltd
- Haohong Motors etc
It is to be noted here that some of the automakers mentioned-above have already entered Pakistan such as FAW, JAC and Jinbei, while others are gearing up to come to Pakistan.
Let’s see, how the arrival of new automakers will make a difference to the existing auto industry.
That’s it from our side, drop your thoughts in the comments section below.