Saturday, April 4, 2009


Global auto industry is thinking about how to create demand according to their capacity where Pakistani industry is unable to fulfill the current demand.

The current crises like energy and political instability is also contributing as severe hurdles in the development of Pakistan automobile industry.

The world automobile industry is competing on the base of price (which is the result of efficient production) Efficient fuel technology (which is the result of research and development) & durability (which is the result of quality production) and in Pakistan there isn’t the technology advancement so that you can come over fuel efficient cars.

A Suzuki 800cc car retails for about Rs300, 000 in Pakistan. In India the price is about Indian Rs210, 000 or about Pakistani Rs260, 000. This 15 per cent difference is common to all car brands and cannot be attributed to either super-profits or inefficiency of the Pakistani car manufacturers. It is the result of the subsidies available to the Indian manufacturers and to some extent their economies of scale.

The Vendor industry in Pakistan also plays a critical role in the growth of auto industry as all the component parts are not manufactured under one roof.

Development of vendor industry would be able to expand the employment opportunities and reduce cost of production. Transfer of the state-of-art technology from parent companies of Japan and Korea is one of the most important areas of automobile industry. Unfortunately, Pakistan has not been able to derive maximum benefits in terms of technical know-how, production technology, quality control, post-sale servicing, etc, to the mutual advantage of the manufacturer and consumer.

Apart of all those factors discussed above political stability is also playing negative role, Terrorism activities are key factor to identify any country’s political stability and under current scenario no investor is wiling to invest in the country and instead of investing the companies are working out on transferring the current plant to outside faculty where like other factors political stability is also there like in China ,Japan and India.

All above discussed factors are the reason which differentiate Pakistani automobile industry form global automobile industry.

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