Foreign Auto-Manufacturers Reluctant to Enter Pakistan

Pakistani automotive market has witnessed a substantial increase in the previous fiscal year, where the car sales went up to 179,944 units in 2015, as reported by PAMA. But there’s still a tremendous room for the market to be explored by the Foreign Companies.

Read More: French Automakers, Renault and Peugeot, Interested to Invest in Pakistan

The proof is evident by the Toyota Indus trying to operate at its full capacity to meet all the orders and to clear all the backlogs of thousands of vehicles. Furthermore, it is argued that the foreign investors shy away due to the high monopoly in the local market being enjoyed by three (Toyota, Suzuki and Honda) auto-manufacturers in Pakistan.

mehran corolla civic car sales

Even if this monopoly does hold some truth to its credibility, there is still the issue of a huge investment for a new auto-manufacturer to enter into Pakistani market. The Federal Finance Minister, Ishaq Dar, on his recent visit to France, has invited foreign investors. Government is trying to tempt new investors based on its newly announced automotive policy, which allows the new investors to pay fewer taxes on import of parts and various other incentives that could help them in their new business avenues.

When asked about the possibility of a new automobile investor in Pakistan, a local industry specialist replied:

Pakistanis prefer brand popularity, and for a new manufacturer to enter in our market; they will have to put in a lot of effort and capital to promote company’s PR among the masses, to sustain the idea of its credibility

Read More: Dewan Motors Launch BMW X1 – Starting From 3.99 Million

It is a fact that CBU’s do end up costing more and installing local assembly units require lots of funds and time. Furthermore, the biggest concern for any investor will be aimed at the security of their investment, because Pakistan is quite famous for its turmoil prone political environment. So industry experts believe that if the Government provides Sovereign guarantee and tax exemptions to international auto-manufacturers, then the new companies will rush to an emerging Pakistani market. Because let’s be honest, the current choices are not up to the par and our local industry does have a lot of room to accommodate French, German and American brands such as Peugeot, Renault and Volkswagen.

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Abdul Hanan

Hanan is an avid auto enthusiast with a flair for writing and playing games. He loves traveling, deciphering political maneuvering and exploring the realms of coding & graphic designing.

  • Sultan Kiani

    You’re not going to see any EU automaker building cars in Pakistan in near future. N-League govt is going to end in 2018, neither Peugeot nor Renault or VW will risk entering Pakistan. However, you’ll see Xing Mong, Ling Long and Ching Chong Changgan replica cars soon on the roads thanks to CPEC agreement.

    Other than Chinese, Hyundai and Nissan may introduce few cars like Datsun Go series (Nissan) and i10 (Hyundai) since they already have good experience and brand recognition in Pakistan.

  • Guest

    “…the biggest concern for any investor will be aimed at the security of their investment, because Pakistan is quite famous for its turmoil prone political environment…”
    Author himself is admitting it. But I guess introducing small cars will really go a long way for these companies to get a feel as to what is the market reality in Pakistan. On the Chinese, yes they will coming in numbers and coming in hot because they will be planning to get the best out of CPEC in every manner….

  • Soccer Guy

    What reference event makes you conclude this?

  • Sultan Kiani

    Life Experience and analytical skills!

  • Soccer Guy

    Appreciate you share that with us, but that needs to be based on some recent statements or events

  • Sultan Kiani

    Thank you, but I’m not the author, I just commented to share my opinion!

  • Muhammad Adil Mazhar

    Agree with these facts, but can only wish for these companies to step into Pakistan ASAP.

  • Bitter_truth

    The truth is people who don’t know anything about Cars prefer to Buy locally assembled Rolloa and nasty civic. People who knows about international car brands are looking forward to see companies Like Ford, Volkswagen etc. PW writers just do hit and try by spreading false news just to get few junky clicks on Junk posts except few posts rest don’t contains any valid sources.

  • Soccer Guy

    lol Yeah i realized this later

  • Shahbaz

    Government should also give guarantee to people that these companies do not run away after selling CBUs. If I have to take risk of parts availability and resale, there are many options of JDMs at a very reasonable price. Mostly blogs on Pakwheels are written by the people who did not have much experience of buying, driving and selling vehicles. Peugeot, Renault and Volkswagen are not of Pakistani taste (Because I know these cars). I will be surprised If they can compete local cars. BMW is a good addition but for a specific class.

  • Muhammad Yasir

    this is purely the fault of the public AND the govt

    public for its childish and illiterate evaluation of the car pricing schemes and such. THIS IS THE DAMN GODFORSAKEN REASON we STILL DO NOT have a BUDGET CATEGORY of Automobiles in Pakistan (the horrific Mehran costs ~7 LAC Pkr , which is a MID RANGE price NOT a BUDGET one !!!. )

    secondly , i believe that the govt isn’t making enough headway. there should have been more urgency from the concerned representatives … instead there’s just apathy and shameful LETHARGY !

    DAMN THIS HORRIBLE government :@ !

    only God knows when we will be able to purchase usable and decent cars in BUDGET Category Pricing in Pakistan !

  • Guest

    You are young enough to know only about this govt.

    Pakistan went downhill just after the murder of Liaquat Ali Khan.

  • Guest

    Pakistanis are used to Japanese vehicles. They won’t easily accept French or Italian design, neither the body shape, nor the handling nor the technical stuff.

    But heck the government cannot give guarantee of their own survival (which can be seen by many coups in the history, dissolving of assemblies, governor rules and what not), how can they give any other guarantee?

  • Guest again

    They have made no investment to date. No MoUs, No JVs, No Nothing.

    Got it.

  • Muhammad Yasir

    im not talking from a political perspective. rather from a technical or rather professional point of view.

    and yes , the country did go to hell after L.A.Khan’s assassination ( A* in O’levels Pakistan Studies CIE exams)

    however , im more interested in the fact that we STILL don’t have a budget car market EVEN tho we are CLOSING on seven decades of Country ‘sovereignty’ !

  • Soccer Guy

    Got nothing as u r pretty outdated in this regards.

  • Guest again

    As a nation, we are not interested. Japan became so good because they were rooting for a national car.

    We do not understand the importance of transportation infrastructure. We were looking for atom bomb. We made it.

  • Muhammad Yasir

    good sarcasm