Pak Government Needs To Work Harder To Bring Carmakers Like Renault, Fiat And Volkswagen In Pakistan

Auto industry of Pakistan

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.

Also Read: Audi AG To Start Feasibility Study For Assembling Cars In Pakistan

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.

Asad Aslam

A PakWheeler with a degree in mass communication. He tweets as @masadaslam

  • favad

    200000 Cars are good number ,How many Countries have 200k Cars sold annually ,Yes you are right about few things ,biggest issue has been cost of production like electricity and Taxes .

  • Hassan

    200k cars are low compared to the population. Similarly populated countries have a much larger car market i.e. Brazil

  • Guest

    The logic is basically flawed. It says that govt is trying to bring new automakers to increase the foreign investment (for what purpose?) and to reduce the hold of Japanese automakers (again, to what purpose? Does it have a logical background?).

    While the solid logic should have been that Pakistan govt is looking for diversifying, improving the products available, cost-benefits ratio, quality and safety, and reducing the dependence on a single source for the sake of guarding the national interest – and of course all these things have not been discussed in the policy.

    When they talk about the size of Pakistani market they should also talk about the size of infrastructure to accommodate all they want to produce. The size of roads, the parking options, fuel availability (trying driving Balochistan which has the largest land mass but least fuel availability, you have to take your own fuel in jerry cans), the availability of spares such as tyres, the easy availability of essential services like options to pay road token, fitness test etc. With the number of vehicles, the size of all these things should also increase to accommodate.

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