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AUTOMOBILE
INDUSTRY
In the world trade, Auto Sector
is one of the largest segments. It is the major driver of economic
growth and business activities. It puts multiplier impacts on the
economy. Day-in, day-out around 200,000 vehicles roll off the world’s
assembly lines with car as the dominant segment of the industry.
Evolution
of Automobile Industry in Pakistan
Automotive industry in Pakistan
started in 1950 and has gone through different phases of progress as
summarized below:-
|
PERIOD |
MANUFACTURING
OPERATIONS |
VEHICLES |
COMPANY |
|
1950’s
(Private
sector). |
SKD Assembly. |
Bedford
trucks/buses. |
General Motors. |
|
1960’s
(Private
sector). |
SKD/CKD
Assembly
Indigenization
in :- i) Bedford trucks /
buses - 40%
approx.
ii) Cars -
20%. |
Bedford
trucks/buses, Ford Combi vans,
Vauxhall, Ford
Prefect, Ford Cortina and Dodge Dart cars. |
Gandhara
Industries Ltd. (formerly General Motors). |
|
1970’s
(Nationalization). |
SKD/CKD
Assembly
Indigenization
process accelerated and achieved 80% deletion in Bedford
trucks/buses by 1976. |
Bedford Trucks/
Buses, cars (upto 1972). |
PACO |
|
1980’s onward
(Privatization
& entry of private sector). |
Progressive
manufacturing of cars under Deletion Programme. |
Suzuki, Toyota,
Honda, Hyundai, Santro, Kia, Cuore, Revo and Chevrolet
cars. |
PACO, Pak
Suzuki Motors, Indus Motors, Honda Atlas Cars and Dewan
Farooq Motors, Adam Motors, Nexus Auto |
Segment wise Automobile Manufacturing Units
•
Cars 7
•
L.C.Vs 7
•
Jeeps 2
•
Truck and 5
Bus
•
Tractor 4
•
Motor cycle 39
•
Vendors (400 approx)
Operational Environment
Industry operates under franchise and technical cooperation agreement
with:
§
Japan
§
Europe
§
Korea
§
China
*Production:
Source:
PAMA
The two segments of the industry namely; car and two wheelers have shown
remarkable growth over the last five years. The growth in domestic
market of cars has risen from 40,601 in 2001-02 to 126,817 in 2004-05,
which is expected to cross 150,000 units during 2005-06. This growth is
attributed mainly by car financing schemes, improved liquidity position
of certain class as a result of economic growth indicators and other
monetary measures.
The motorcycles have also shown marvellous growth due to new entrants.
The new entrants with fair competition have brought about the
availability of cheaper vehicles in the domestic market.
Vendor Industry
The industry has the potential for development of entire engineering
sector. Development of vendor industries in return assures transfer of
technologies in nearly all spheres of engineering, specifically,
metallurgy, plastics and glass.
Technology exists for major engine, suspension and transmission
components but due to limited market, prospective entrepreneurs shy away
from investment. Over 400 vendors are engaged in the production of auto
parts locally including tyres, sheet metal parts, mirrors, gaskets,
engine valve, camshaft, oil pump gears, pistons, radiators, seats,
dashboard, and axles.
Tariff Structure for Auto Sector
|
Product |
Customs Duty |
|
|
CBU |
CKD |
|
Cars
Up to 1500 cc |
50 % |
35 % |
|
1501 – 1800 cc |
65 % |
|
Above 1800 cc |
75 % |
|
Other vehicles |
|
|
LCVs |
60 % |
20 % |
|
Buses |
20 % |
5 % |
|
Trucks |
60 % |
20 % |
|
Tractors
(35 HP to 100 HP) |
15% |
0 % |
|
Tractors
(Above 100 HP) |
30% |
0 % |
|
Motorcycles |
90 %
|
30 % |
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