Pakistan Automobile Manufacturing Association (PAMA) recently released data that reflected a surge in the sale of domestically produced automobiles. The data released by the association showed a rise of approximately 61.8 percent in the first five months of 2022 compared to the same period in the corresponding year 2021.
Car manufacturers have always faced the brunt of criticism for having extremely high prices and poor quality. Pakistan recently tried to shift away from its import bias in the automobile industry and start producing and assembling cars locally.
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Pakistan began to import CKD (Completely Knocked Down) and SKD (Semi Knocked Down) variants of cars and started assembling them locally. Jian Peng, Pakistan’s Honorary Investment Counselor in China, said that “In the past, imported cars occupied the major part of Pakistan’s car market, but now domestically produced or domestically assembled cars are gaining popularity.” And this is very much reflected in the hike in car sales in the recent months. The rise in sales of automobiles also reflects a recovering economy that was adversely affected by the pandemic.
International brands are entering the Pakistani market and setting up local assembly plants in joint ventures with the PAMA, further bringing down the inflated prices. Moreover, the introduction of new international companies in the Pakistani market would also help bring down the cost of spare parts and help strengthen the supporting sector of the automobile industry in the country.
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Previously a significant chunk of Pakistan’s car market was occupied with the import of CBU’s (Completely Built Units) but as favorable policies are introduced, domestically manufactured and assembled cars are gaining popularity.
Significant strides have been made to bolster the efforts to enable the entry of international automobile brands into the country in joint ventures with the local industry but Pakistan needs to further incentivize so more automobile companies enter this market of great potential. As more and more car manufacturing companies enter the Pakistani market, it would also help crumble the monopoly which some companies enjoy in the Pakistani market.