Govt to support low-cost car manufacturing

Government will support manufacturing of a low-cost, energy-efficient and spacious indigenous car which will cost almost three-fourths of other cars in Pakistan with same specifications. Engineering Development Board (EDB) should facilitate and support industry in manufacturing a hundred per cent indigenous car which can be termed as a truly national car and which should become a symbol of quality in the world of auto engineering, said Federal Secretary Industries Aziz Ahmad Bilour.
Automotive industry has been an active and growing field in Pakistan for a long time. However, it is still not as established to figure in prominent list of top automotive industries. Despite significant production volumes, transfer of technology and localisation of vehicle components remains low. Most cars in the country have dual fuel options and run on CNG which is more affordable and cheaper than petrol in the country.
Bilour said industrialists need to bring innovation, out-of-box ideas and knowledge-based activities in manufacturing to boost demand for Pakistani products in international market. Proposal for conversion of existing car models into bullet-proof cars was also discussed. The meeting was informed that by using latest technology, locally assembled cars can be converted into bullet-proof cars without adding unnecessary weight and disturbing efficiency of the car. EDB CEO, Aitazaz Niazi proposed that exports of engineering goods from Pakistan, which currently stand at $1.45 billion, can surge up tremendously if engineering companies are facilitated and sponsored to exhibit their products in industrial fairs world wide. Engineering companies are currently facing difficulty in exhibiting their products international fairs because of financial constraints. Bilour directed EDB to explore possibility of manufacturing environment-friendly hybrid cars which are fast becoming popular in United States with a mileage of 51-53 miles per gallon.
According to ministry of industries, Pakistan produced its first vehicle in 1953, at National Motors Limited, established in Karachi to assemble Bedford Trucks. Subsequently buses, light trucks and cars were assembled in the same plant. The industry was highly regulated until early 1990’s. After deregulation major Japanese manufacturers entered Pakistan’s market thereby creating some competition in this sector. Assemblers of HINO Trucks, Suzuki Cars (1984), Mazda Trucks, Toyota (1993) and Honda (1994) in particular, entered once deregulation was introduced. Assembly of Daihatsu and Hyundai cars (1999) and various brands of LCVs and range of mini-trucks commenced recently. Journey of auto industry in Pakistan from 1953 to 2011 has been rough, tough and sometime very smooth. Car industry saw boom in 2006-2007 when sales touched a record peak of 180,834 thanks to rising car financing up to 70-80 per cent by banks due to low interest rates and rising rural buying.
Since then the industry has been striving hard to reach same sales level amid high interest rates and Yen appreciation against rupee. But high farm income is giving much support to car sales. Good crops this year will keep car sales brisk despite increase in prices.
Car industry has invested over Rs20 billion in the last four to five years to meet growing demand. Direct employment in car industry hovers between 5,500-6,000 persons.
Auto sector now employs 192,000 people directly and around 1.2 million indirectly and has Rs98 billion of investments and contributes Rs63 billion as indirect tax in the national exchequer.
In the meeting, representatives of National Fertilizer Marketing Limited (NFML) proposed that their organisation is preparing a Central Digital Distribution System which will facilitate customers and government to keep a track of fertiliser consignments and record of stocks. Managing Director Utility Stores Corporation of Pakistan (USC) briefed the meeting about future expansion of USC in which the corporation has planned to open 2000 new stores in the country. Proposal for digitalisation of USC network by preparing a Management Information System was also discussed. This system will improve transparency and considerably reduce the operational cost of the corporation. Department of explosives proposed their ideas for ensuring safety and security of life and property of citizens while giving clearance for sale of hazardous material.