Engineering Development Board (EDB) has urged Chinese automobile manufacturers to avail investment opportunities in Pakistan. The EDB CEO Aitazaz A. Niazi in a meeting with Chinese delegation led by Economic and Commercial Counselor Zhou Zhencheng highlighted the opportunities in setting up a low price small car unit, manufacturing car sub-assemblies, components presently imported and setting up of tractor assembly plant.
He offered to assist Chinese manufacturers in finding local partners for them, as the government was interested to promote competition in the automotive sector. A detailed presentation on automobile sector of Pakistan was given to the visitors. They were informed that Japanese car manufacturers have 100 per cent share in the local car market against 45 per cent share in the motorcycle sector.
The Chinese share in motorcycle production is 55 per cent. It added that 133,972 cars were manufactured in last fiscal year while motorcycle production was 1,535,427. The Chinese diplomat Zhou Zhencheng informed the CEO about the global auto show being organized in Shanghai in September. He invited him to participate in the auto show. However, Chinese delegation assured that chinese manufacturers would be persuaded to explore Pakistan’s market. Referring to new entrants’ policy of the Government, it was explained that any manufacturer can invest in Pakistan under Auto Industry Development Program (AIDP) or the Tariff Base System (TBS). AIDP facilitate new entrants to import 100 per cent CKD kits at the leviable customs duty for a period of three years from the start of assembly/manufacturing.
The government intends to make the existing policy regime more flexible for the new entrants in order to attract foreign investment. In this regard amended policy is expected to be finalized soon, Niazi told the Chinese delegation. The Automobile industry of Pakistan has enjoyed tremendous growth in the past few years however, owing to the global economic recession and a tight monetary policy by the state bank, a decrease in the overall demand of automobiles has been witnessed during the year.
The automotive sector of Pakistan, despite significant production volumes has lacked in transfer of technology. As of 2010, the industry has not adopted any automobile emission or safety standards. Most cars produced still rely on the obsolete carburetor based technology. There are only three major competitors in the industry, namely PakSuzuki, Indus Motors and Honda Atlas.
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