Well, it's not quite flourishing either when you compare it other neighboring countries.
About the struggle to survive, yes, the new entrants would have struggled to survive if the ban would have continued. Think about Bravo, Kia, Hyundai and the others , who would wanna invest in such a place where they know only a small percentage of the people could buy a new car (and that too out of the ones who could afford it in Pakistan).