Pakistan is on the verge of becoming a major exporter of new cars and other automobiles. There are several reasons behind this, but one main one is the rising population. With the increasing number of people, there will be an increase in the demand for new cars.
This is not a secret, as the PML-N (Nawaz Sharif’s political party) has been promising a series of new jobs, and other projects, in order to boost his vote share, especially in upcoming local elections. It is a strategy that he might want to use in future to win the next election for the seat of PML Karachi. And, it appears to be working. For example, the head of the provincial revenue department, Mian Muhammad Asif, has already confirmed plans to invest about Rs3.2 billion on new cars for the provincial capital.
The chief executive of Pakistan International Auto Corporation (PIC), Shafqat Hussain, has also made big promises. He has promised to double the car production in Pakistan. There is no doubt about it. In fact, PIC is planning to double the volume of car manufacturing by the end of fiscal year 2021. The prime minister of Pakistan is probably looking forward to his first car, or maybe even his first bus, when he becomes prime minister after the next general election is held.
All this is well and good, but can this dream become reality? Actually, it is quite possible. One of the major advantages of the transport sector in Pakistan is that it is one of the major drivers of the domestic economy. So, if the government starts supporting this sector sufficiently, it can emerge as a major player in the global transport market.
However, there are some challenges on the way. For one, there are several companies, which are already established in the transport sector. They have a monopoly in the domestic transport market. They are providing new cars at very low rates. It will be difficult for any new company to enter this business.
However, there are some transport companies, which are in the process of expansion. They have bought new transport buses and are upgrading their fleet to cater to the demands of the rapidly growing population. There are some major transport companies, which are planning to expand their business in the transport sector, if the government gives them a chance.
The other challenge that may come up for the new car manufacturer is the security issue. The insecurity situation in the country has worsened in the recent months. If you want to import new cars in Pakistan, then you may not be able to do so. According to the law, all vehicles coming from outside the country need to be registered at the Pakistan customs and should have valid permits.
Another major challenge for the manufacturers of new cars in Pakistan is the environmental laws and regulations. Automakers will have to change their vehicles to comply with the regulations of the Islamabad Motor Vehicles Commission (MVC). Cars, which do not comply with the specifications of the set out regulations, can be confiscated. So, if you are planning to import a car in Pakistan, make sure that it is able to pass all the required tests by the concerned authority.
Besides these major issues, there are also a number of other issues and difficulties, which are going to hamper the progress of the car manufacturing industry in Pakistan. For instance, the bureaucratic procedures, which are involved in obtaining a license for producing new cars in Pakistan, are very lengthy and often take months. So, manufacturing of new cars is not likely to start before next spring. As you know, the automotive industry of Pakistan is entirely dependent on the government. In order to secure the necessary permissions and make sure that the process goes smoothly, it is always better to consult a professional before manufacturing begins.
Furthermore, the export restrictions imposed by the international community are another hindrance in the path of the car manufacturing industry. Automobile makers fear that if this law is implemented, they would not be able to export any car to the European Union, because the EU cars will have to be produced in Pakistan as well! So, Pakistan might be left with only one choice – to shift towards automobile manufacturing. The only possible car manufacturing facility in Pakistan, which has so far started production is the GM Hiccup auto-manufacturing facility in Karachi. The other major companies which are manufacturing cars in Pakistan are the Toyota, Mahindra and the Ford Motors. It is expected that more companies will start to explore the market for new cars in Pakistan in the future.
It is obvious that there are still many legal issues, technical hurdles and other issues, which will remain till the final year of implementation. However, these problems are temporary and can be solved easily. There is no doubt that new cars will play an important role in improving the economy of Pakistan. Hence, all the illegal car drivers will have to switch over to these new cars and the economy can once again begin to prosper.