Automobile Sector in Pakistan

Automobile Sector of Pakistan has been playing a vital role in the overall national economy. The sector is one of the major contributors to the manufacturing sector in the Country and is registering a growth of over 30% per annum. Steady policies of the present Government enhanced per capital income availability of car financing options.
Improved shape and style of locally manufactured cars and up-gradation in the living standards of the masses are main factors behind the impressive growth in this sector. At present there are 32 automobile manufacturing units in the Country with a capital investment of US$ 1.5 billion (Assembly & Auto Parts) and employ 5,600 workforce. Auto parts vendor industry consists of 2,000 units in organized and unorganized sector and employs over 140,000 workforce.

During the current fiscal year the automobile industry has continued its growth momentum for the sixth consecutive year. The demand in the auto sector has been catalyzed by low interest rates in the financial markets, a persistent inflow of home remittances, cheaper and easy availability of car financing and frequent model changes induced by furious competition in the car industry. The increasing trend touched almost every segment of the auto industry.
Car sales have achieved a Compound Annual Growth Rate (CAGR) of 21.7% during the past 5 years. Cumulative production and sales volume of the listed car assemblers jumped by 4% and 9% to 196,405 and 201,421 units respectively during the last fiscal year. The Auto Policy envisages investment for capacity expansion to meet the target of 500,000 vehicles per annum by 2011-2012.
The automotive parts and accessories manufacturers are clearly heading towards the growth of industry and committed to double investment by 2010. The following Industry Statistics have been released by their Association “PAAPAM”:

Faster growth in vending industry has enabled the local automobile sector to achieve expansion in capacity as well as manufacturing technology. The auto industry has taken measures to get rid of the menace of ‘on-money’ (premium for early delivery) from automobile business in the Country through expansion in the production capacities by all the assemblers and increasing the supply of vehicles. Industrialists are making substantial investments to achieve this goal, which will also create job opportunities for an additional 100,000 plus skilled people.

Rs. 70 bn investment made in CNG Industry

With the price of oil reaching 100 dollars per barrel, the Compressed Natural Gas (CNG) Industry is poised to progress and develop enormously in the Country. More than 1,765 CNG Stations have already been set up while 1,000 more would be set up in next 3 years. Pakistan is likely to become the second top user of CNG in the world as over 1.6 million cars are now CNG fitted; 30,000 vehicles are being converted into CNG while about 3,000 new factory-fitted CNG Cars are being sold in the market by local manufacturers every month.

CNG BUSES and TRUCKS - The Green Revolution

The CDGK plans to have 8000 CNG-fitted Buses soon to solve the public transport problem for commuters, substantially reducing the environmental pollution and global warming. In this respect CDGK is likely to award contracts for the installation of 5 CNG Filling Terminals on Public-Private Partnership basis. The Chief Minister NWFP & City Nazim, Peshawar city have invited M/s Yumna Aircraft Mfrs Ltd, China for 700 CNG fitted Buses for NWFP. CNG & LNG Trucks development is also in the pipeline for commercial use.

In the present scenario of SAFTA and WTO regime, our markets are open for international auto manufacturers.