Impact of imported cars on Pakistani car manufacturers

Posted on at


Pakistan has a vibrant automotive industry. A survey of the streets shows the variety of cars available in the country. From compact cars to passenger cars, hatchbacks, large SUVs and luxury executive cars all types of vehicles available. However, there is no car brand homegrown. The closest to a brand of Indian cars locally assembled vehicles are cars that are facing stiff competition from imported cars. In addition, the market is dominated by Japanese automakers. There are three major car assemblers know Pak Suzuki Motors, Toyota and Honda Atlas Indus Motors which together account for a large share of the car market in Pakistan. A number of companies help in the sale and distribution of these cars. Besides showrooms and dealer networks, companies based website that help in selling cars like Carmudi.pk. The models available are listed on their website, customers can browse around, find your favorite vehicle and then buy directly from the car dealer.
 
Impact of imported vehicles automakers Pakistan
 
Car sales domestically manufactured
The year 2013 saw the combined sales of local car assemblers decline by about 22% in 2013. This can be attributed to a number of factors. First, sales are sensitive to consumer purchasing power. In Pakistan, high inflationary pressure on each individual making them reluctant when they have to buy a new car. Also, running, maintenance costs and fuel also raise the cost of owning a vehicle and result in a drop in demand. Another reason for the negligible growth in local car sales is generally slow economic activity in the country. Frequent interruptions in power supply, steady increase in electricity prices, stiff competition from an influx of imported cars and tax structure of the country that puts additional burden on the consumer. Restructuring vehicle registration fees, chips vehicles and other road taxes increases the cost of buying a new car. In addition, the draft finance law in June 2013 put one percent additional tax on sales to OEMs that led to a greater increase in the cost of production which resulted in increase in the selling price.
 
Impact imported cars
The import of cars adversely affects local manufacturers. The poor performance of local car could also mean that the locals prefer imported cars. Their reluctance to buy local car may be due to the considerable difference in quality and performance between the two types. The superior quality of materials used, workmanship, final finishing and world-class assembly of all components are some things that go in favor of imported vehicles.
 
Local manufacturers call for ban on imports
Given the market trend and consumer demand, local manufacturers are asking the government to implement policies to protect and ban cars entering the country. If the number of imported cars continue to rise and local car sales down, then many thousands of workers will lose their jobs.



About the author

160