ISLAMABAD: The auto manufacturers have doubled their production target increasing from 0.25 million to 0.5 million units per annum by 2020.
While talking to media during an auto workshop, former Pakistan Association of Automobile Parts and Accessories Manufacturers (PAAPAM) chairman Aamir Allawala said the potential investment of $46 billion through China Pakistan Economic Corridor (CPEC) is a big opportunity for the auto sector.
“The positive impact analysis of CPEC shows growth in infrastructure development, stimulation of economic growth, enhancement in consumer buying power, and growth in demand for automobiles,” said Aamir, adding that Pakistan has the 6th largest population on the planet and 50% of the total population is below 30 years in age. “There are 90 million young potential consumers.”
He cited the example of motorcycle industry whose demand has surged over the last 10 years. “There is 22 times growth from 87,000 units in 1999 to 2,100,000 units in 2015-16 in the motorcycle industry,” he added.
Aamir said Pakistan is among the 40 automobile producing countries while 4 of top 10 global carmakers have established plants in Pakistan, adding that the auto sector is top contributor to the government in terms of taxes, as 34% of a vehicle’s price is paid as taxes. “It has also created employment for 3 million skilled manpower.”
He said other benefits of the auto sector include foreign investment in manufacturing sector, GDP growth through large scale manufacturing, documentation of economy, and technology and skills dispersion. Aamir said over Rs 92 billion investment has been made by the auto and vendor industry, while PAAPAM members supply local parts worth Rs 30 billion only to Toyota in Pakistan.
It is pertinent to mention that the phase 1 was from 1991 to 2015 in which total market size (including imports) was 70,000, and in the phase 2 (2001-2007) the size went up to 250,000 units. In the phase 3 (2008 to 2013) the market size shrunk a bit with the market size of over 200000 units, and in the phase 4 (2014 to 2015), the market size once again went up to register over 280,000 units.
