The government of Pakistan is trying to bring new automobile manufacturers in Pakistan in a bid to not only increase the foreign investment but also to shed the hold of Japanese automakers on Pakistan’s auto sector. The new auto policy was developed by keeping the interests of potential new investments in the auto sector. Although the economy is relatively in better condition, and the Pakistani rupee has been stable against the US dollar, there is still a long way to go.
Just a couple of weeks ago, Ghandhara Nissan showed its intent to bring new models under Datsun brand by 2017. The Chairman of Pakistan’s Board of Investment, Miftah Ismail, has been in contact with a few potential investors including Nissan, Renault, and Fiat. Before that, there were talks with Volkswagen Group as well. Ismail told the press,
“We expect that there will be one or two foreign investors coming into Pakistan,”
Although Renault, the French automaker, has nodded that there have been talks and Pakistan has been under consideration, but it’s too early to say anything immediately. Nissan also has shown its interest but did not comment anything binding. Audi, however, has signed a memorandum with Sindh government to start the feasibility study to assemble the cars in Pakistan.
But although the new auto policy favors new investors, it is going to be an uphill battle for Pakistan to convince the new carmakers. And one of the major concern is the political instability. Other than that, the size of Pakistani market is also has been a concern. Just over 180,000 passenger vehicles were sold in Pakistan in FY2014-15 compared to 2 million passenger vehicles in India.
Also, experts have their doubts on the effectiveness of the new auto policy as well. Many argue that the government didn’t take any measures that can help increase the size of the market, like lowering taxes and in return decreasing the overall price of vehicles.
Although the imported cars gave the people some relief, it is not a permanent solution. There is no doubt far more to do, by not only the government but also by the concerned institutions.