The indian market have now attained such a significant volume that motor manufacturers can no longer ignore it, infact they go out of their way to get the foothold in it, so that is why they have such a huge variety.
While policy makers in Pakistan took a different path, where Pakistani Government set up joint ventures with Japanese companies to attract them & serve local needs, and when they gained a certain volume in sales, then Govt sold their share back to the manufacturers (Suzuki, Honda, Toyota, Mazda etc) but instead of letting the free market take its course (survival of the fittest) they gave them the protection to save/ensure the jobs at the OEM/local vendors, now the duty structure is as such that Govt has created huge overhead some of which goes to Govt coffers, while the rest becomes a device in manufacturers to monopolize the market which in turn gives them guarantee that no matter how much outdated product they have in Pakistani market it will not be and utter failure. Another side effect for all these shenanigans is that our local vehicles have no depreciation concept, worth of old vehicles remains pretty static in-fact in some cases vehicles appreciate rather then other way around (example is corolla/Civics/City etc) which borders on lunacy, this situation gives OEM added incentives to stick to old models.
So this brings us to current affairs, where the cheap as chips Camry & Accord which are staple products for middle class around the world (in-fact Camry is mostly used as Cab) become status symbols and are sold for almost the same prices as base model Mercedes E200, and 4x4 which are used as modern donkey and cart has turned into prized possession and family heirlooms which is ridiculous situation, but the fact is in this country Vehicle OEM are now one of the strongest lobbyists and use their clout to keep the status quo as they don't want any changes in duty structures, for example the current situation lets Pak Suzuki choose a model as it becomes obsolete in the rest of the world, and they shift the old press machines/assembly lines from Thailand, Malaysia etc to Pakistan and reap the profits of obsolete models.
Because our market does not have the volume due to this closed market situation and as a result has not gained a critical volume that new manufacturers (especially German, Italian and American etc) don't feel any pain by their lack of presence in Pakistan, while few of them who wanted to check the waters by importing CBU (completely built units) could gain no traction and either they failed miserably or not bothered at all. While the duties on CBU in Pakistan have unnecessary ambiguity that it takes rocket science to decipher it, for example the duty structure is not uniform for Japanese companies and their western counterparts, while the hybrids have totally different structure as well.
Q: Is there any cure for current situation?
A: Off-course it can be rectified by change of the policy, just like telecom, services & Oil & gas sectors were deregulated, do the same to motor manufacturers as well.
Q: What are the steps for achieving these goals?
A: Regulation can not ask an OEM to bring the latest models, but they can be framed such a way that obsolete products can no longer be manufactured, such as,
1) Regulate the power trains to such and extent, that they are closer to latest emission standards (Euro 3, 4 etc), so they have to phase out the older ones for the new ones, as petroleum levy is charged, it should be used to give the incentive to upgrade the refineries to lower the Sulfur content in the fuel.
2) Overhead should be reduced on CBU units & cut down on red tape, so that commitment for new entrant is not too high, and let the open market decide which company/product survives.
3) Duty structure that is based on displacement should be replaced by the power output of engines, better still they should encourage the efficiency rather then the size.
4) Safeguarding the local jobs in manufacturers/vendors have gave nothing but grief to masses, so Govt should no longer micro manage this situation & let the fate of these jobs at the mercy of market economy, as these jobs are not worth mortgaging whole nation, while most of those skilled labor can easily serve in the cottage industry of providing the service to newly imported vehicles so there won't even be that much job loss as well.
5) Don't obsess with foreign exchange loss, if the market is truly open, within few years there will be export oriented OEM setup which will be far more effective in job creation rather then focusing on domestic consumers, the shining example is Thailand and its manufacturing today, its much more focused on export market & so they are far better off then us.
Sorry rant is getting longer, hopefully it gives you some understanding of the current situation.