The production of cars on the rise!

Despite an unstoppable rise in prices, the automobile industry of Pakistan has yet again recorded a notable increase in the production of cars during FY 2017-18.

Pakistan’s automobile scene continues to be dominated by decades-old trio i.e. Pak Suzuki Motors, Toyota Indus Motors and Honda Atlas with Al-Haj FAW also creeping in slowly. Despite the alarming speculation of the declining buying power of the general public in Pakistan, the production of cars is increasing. The stats show that the production has only increased in the past few years as 218,372 cars were produced during the fiscal year 2017-18 as compared to 186,936 and 179,944 in 2016-17 and 2015-16 respectively. Currently, the total capacity of plants installed by the car manufacturers can produce 300,000 cars every year. This particular production figure is more than the overall annual sales in the country.

In a country like Pakistan that consists of a budding middle-class population, the market share in the automobile sector is essentially concentrated in the low-budget cars segment i.e. 800 cc to 1000 cc. Pak Suzuki is the one and only major car manufacturer in this segment enjoying the monopoly for the past three decades. However, the Automotive Development Policy (ADP) 2016-21 has opened ways for the new investors to set-up their manufacturing or assembling plants in the country under several incentives. The competition environment promises to get intense as United Motors and Regal Automotive Industry have entered the local market.

On the other hand, let’s have a look at the production stats of the major companies in the local auto sector. The production capacity allows Pak Suzuki to produce 150,000 cars per annum however, the company managed to produce 123,846 cars during FY 2017-18 as compared to 97,531 cars in 2016-17. In 2015-16, the company produced almost the same number of cars i.e. 97,409. As we go further back, Pak Suzuki produced 76,861 and 64,522 cars during 2014-15 and 2013-14 respectively. If we further categorize the production in the 800 cc segment, the auto manufacturer produced 69,078 cars in 2017-18 against 57,842 in 2016-17. As many as 66,957 cars of 800 cc engine capacity were produced in 2015-16 as compared to 54,333 and 42,476 cars in 2014-15 and 2013-14 respectively.

The plant of Honda Atlas has the capacity to produce 55,000 cars per annum whereas it produced 42,710 units during 2017-18 in contrast to 36,531 in 2016-17. The car manufacturer managed to produce 25,061, 24,271 and 23,605 cars during 2015-16, 2014-15 and 2013-14 respectively.

Toyota Indus being another major auto manufacturer in the high-end vehicles holds the capacity to produce 80,000 vehicles every year. However, the company produced as many as 51,218 units during 2017-18 in comparison to 52,874 in 2016-17. The fiscal year 2015-16 is worth-mentioning for the automaker as it produced the highest number of cars in this time period i.e. 57,474. The company jumped to a significant figure of 51,392 units during 2014-15 from the previous 28,124 vehicles produced in the 2013-14.

Al-Haj FAW is comparatively a new face in the local sector which doesn’t have a long history. But, so far the company has produced 598 cars during its maiden FY 2017-18. The production capacity of Al-Haj FAW is 15,000 units.

The production stats of these local manufacturers reveal that apart from Toyota Indus, both Suzuki and Honda have grown in terms of producing vehicles every year. It would be interesting to see the new players competing in the local industry with these decades-old companies. From a buyer’s perspective, it’s a positive sign to have more choices in any certain range of budget. However, the pace at which the car prices are climbing, it’s almost becoming next to impossible for a common person to even think of buying a new car. The government needs to play a critical role here and develop a strategy accordingly to control the prices to a certain extent.

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Apart from being an Electrical Engineer by profession, he is an automotive content writer at PakWheels, a web designer and a photographer.