Pakistan components sector set to increase investment.
28th January 2005
Pakistan's automotive components manufacturers may double their investments in this sector to about Rs140 billion or more over the next two years, from an existing Rs70-72 billion, say local media reports.
“We expect production of more than 150,000 cars (in Pakistan) in 2005. Even the year 2004 was not bad for the auto industry despite some policy-related disturbances, as the car production went up to around 110,000 units," said former Pakistan automotive industry association chairman Syed Nabil Hashmi.
He added that demand for cars was likely to rise to 170,000-175,000 units this year, and to 250,000 in another two years or so. According to Hashmi, the investment in the vehicle distribution sector had increased to Rs70-72 billion in the past three years, while vehicle assemblers had made investments of Rs8-10 billion or so to expand their production capacity.
New car demand in Pakistan is estimated to exceed local production capacity by 20,000-25,000 units, but rather than encourage imports of built-up vehicles at what have been premium prices, Mr Hashmi said, "We need to attract new assemblers, particularly from Europe. That will benefit all the stakeholders -- consumers, government, vendors, etc. -- because it'll lead to competition in the industry and bring down prices, generate employment, bring in new technology and increase government's tax revenues …It is high time that the government try to woo a couple of new assemblers in the country."