PAKISTAN - AN EMERGING MARKET FOR AUTOMOTIVE INDUSTRY

Pakistan, an emerging market for automobiles and automotive parts offers immense business and investment opportunities. The total contribution of Auto industry to GDP is 2.8% which is likely to increase up to 5.6% in the next 5 years. Auto sector presently, contributes 16% to the manufacturing sector which also is expected to increase 25% in the next 7 years.

Vehicles' manufacturers directly employ over 192,000 people with a total investment of over $ 1.5 billion. Currently, there are around 82 vehicles' assemblers in the industry producing passengers cars, light commercial vehicles, trucks, buses, tractors and 2/3 wheelers. The auto policy is geared up to make an investment of $ 4.09 billion in the next five years thus, making a target of half a million cars per annum achievable.

The auto parts manufacturing is $ 0.96 billion per annum. The demand for auto parts is highest in the motor cycle industry which is 60%, then is for cars which constitutes to 22% and the rest 18% is consumed by trucks, buses & tractors. This demand is met by Imports which caters 22% while the remaining 78% is supplied by the local manufacturers.

The growing demand of local consumers and the export potential of the foreign markets depict sustained growth prospects for the automobile industry of Pakistan . In accordance with the growing demand, Auto Industrial Development Committee (AIDC) has been established by the EDB with an objective to provide focused and continued attention to the auto industry at the government and private level. AIDC is aimed to encourage continuation and increasing indigenization, as well as to facilitate auto industry's integration into the global supply chain.