Car Manufacturers in Pakistan – Monopoly of ‘THE BIG THREE’ Broken!

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Atlantic Media Company (AMC) of the United States has ranked Pakistan as a comparatively stronger economy in South Asian markets and expects the country will grow rapidly during the days ahead. It said last month the American stock index provider MSCI also included Pakistan among top 10 emerging economies in the world.

The automobile sector in Pakistan is dominated by 3 manufacturers alone; Honda, Toyota, and Suzuki. These three manufacturers have been considered as the only option for manufacturing or assembling automobiles in Pakistan. There are numerous reasons why no other automobile company has taken interest in setting up their assembly line in Pakistan.

Few of the reasons were a destabilized economy due to terrorism, insecurity of foreign investors due to unstable political and security situation, established stereotypes regarding automobiles, buying-power of the individuals of Pakistan etcetera. Thus, this business has always been under the control of the three above mentioned companies. They have unnecessarily raised prices to an extent where they have become out of reach of the common man.

Recently Volkswagen, one of Germany’s best automobile company and second largest automobile manufacturer in terms of market share in the world, expressed interest in setting up an assembly plant in Pakistan. Dr. Cyrill Nunn, the Germany Ambassador to Pakistan, has indicated that a 14 member business delegation will be visiting Pakistan and will meet the automobile company officials for discussing the scope of their investment in the country.

The Pakistani government has shown a keen interest in the matter which is expected to improve the bilateral economic relationship between the two countries. There are around 40 dealerships that are likely to be established all over the country giving rise to many job opportunities.

Another automobile company, Hyundai, the South Korean giant, has shown interest in setting up an assembly plant in Pakistan in partnership with local textile giant Nishat Mills. According to Reuters, MoU has been signed by both companies and a plant will be set up for both passenger and commercial cars. In collaboration with Korean based Kia Motors, the company is planning to launch passenger cars, light commercial vehicles, and SUVs in upcoming years.

Last but not least, the French company Renault has also shown interest in assembling cars in Pakistan after the recent approval of economic policy and vision by Pakistan’s Prime Minister Nawaz Sharif. The project is intended to start materializing in 2018. Import of machinery will be duty-free along with spare parts import duty cut down to 10 percent for all new entrants.

Special Assistant to the PM and Chairman of the Board of Investment Miftah Ismail has stated, “We want greater competition, and we expect with greater competition consumers will be offered better choices”.

Nissan chief spokesman Jonathan Adashak stated earlier that, “Pakistan is certainly a market of interest for us at present” but also added that the final decision on the same has not yet been taken.

The country has a tremendous scope in automobile industry due to a fast growing economy and security situation being improved by the efforts of the Pakistani Government. The China-Pakistan Economic Corridor project is an important factor in creating economic stability. The recent shift in the automotive sector is a true depiction of that.

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