Automobile Industry of Pakistan Everything You Need to Know in 2023

The automobile industry is one of the world’s most powerful economic forces. This industry provides about 18 million well-paying employment directly and millions more indirectly.

Pakistan is the 35th largest automobile producer in the world. The automobile industry of Pakistan is one of the fastest-growing industries in the country.

Pakistan’s automobile industry contributes roughly Rs. 50 billion (US$220 million) to the national budget. The auto industry accounts for 4% of Pakistan’s GDP and employs approximately 3.5 million people.

Pakistan’s automotive market is one of the smallest but fastest-growing markets in Asia. Currently, Pakistan has 3,200 automobile manufacturing plants.

According to Pakistan Automotive Manufacturers Association (PAMA), Pakistan has produced 226,433 automobiles in the Fiscal Year 2021-2022 1,826,467 Bikes/ Rikshaws, 5,659 Trucks, 661 Buses and 58,880 Farm Tractors.

After the petroleum industry, the automobile industry of Pakistan remains to be the second-largest indirect taxpayer in Pakistan.

Pakistan has received several nominations from foreign investors as a secure place to invest in the auto industry.

Honda, Toyota, and Suzuki currently control the majority of the car market.

International Car Companies 

Automobile industry of Pakistan is dominated by Honda, Toyota and Suzuki

The Auto Policy 2016-21 was introduced in 2015 to attract new automakers to an industry that has previously been dominated by Honda, Toyota, and Suzuki.

Renault, Nissan, Proton Holdings, Kia, SsangYong, Volkswagen, FAW, and Hyundai have all shown interest in joining the Pakistani market after that country passed its second auto policy 2016–2021.

The National Logistics Cell (NLC) and Daimler AG, the German automaker that owns Mercedes-Benz, have signed a memorandum of understanding (MoU) for the local assembly and manufacturing of Mercedes-Benz trucks in Pakistan.

MG Motors Pakistan, a joint venture between JW-SEZ Group and SAIC Motor, is building a 260,000-square-meter manufacturing plant in Lahore’s Special Economic Zone.

Master Motor Corporation is prepared to begin producing light commercial and passenger cars in cooperation with Changan, the auto market leader in China.

The world’s largest automobile maker Volkswagen entered into an agreement with a local luxury brand dealer for the assembly of cars in Pakistan and becomes the 2nd European automaker to capture the Japanese-dominated market.

The auto rickshaw maker company Sazgar engineering works is set up a new car manufacturing plant in Pakistan in partnership with a Chinese company.

Read Also: It Industry of Pakistan in 2022

South Korean brands like Hyundai Motor and Kia Corporation have launched their automobiles in the Pakistani auto market. Another Chinese-owned British automobile carmaker, MG, has debuted in the Pakistani market with their subcompact crossover vehicles.

Another Chinese brand Changan has only been selling minivans and several other types of utility vehicles in the local market. It wasn’t until 2021 that it finally unveiled its first sedan, to be called “Alsvin.”

Monopoly and Lack of Competition

Ever since the local production of vehicles started in the early 1990s, the options for a car buyer in the country remained on a decline. Is compared to the 1980s, when there used to be, a variety of alternatives for each type of car available in more exterior and interior colour options and were updated more frequently averaging 2-3 years per model.

Suzuki Mehran/ Bolan/ Ravi

Since Pak Suzuki began local manufacture in 1991, these vehicles have been accessible, and they continue to be so today without any significant improvements over the past 25 years. Not to mention that by the time local manufacture started in 1991, these cars were already ten years old. While Ravi and Bolan have connections from the late 1970s, Mehran was developed in the middle of the 1980s. What’s more interesting is that Pak Suzuki is excited to offer them due to monopoly and a lack of competition.

Evs/Hybrid Cars 

Electric vehicles in Pakistan

An Electric is an automobile that is propelled by one or more electric motors, using only energy stored in batteries. 

In order to introduce electric vehicles in Pakistan, the Automobile industry of Pakistan and Morris Garages (MG) Motor UK Limited, which is owned by SAIC Motor, have signed a memorandum of understanding (MoU).

the federal government has introduced many taxation and monetary policies in favour of EV and hybrid vehicle owners by announcing a reduction in taxes and charges.

Pakistan joined the global EV revolution in 2021 with the approval and initiation of the framework for an auto policy supporting the idea of electric vehicles (EVs).

According to a plan being developed by the authorities, within the next 15 to 20 years, at least 30% of all cars in the country are to be converted to electric vehicles.

All around the country, EV charging stations are being built. Former Prime Minister Imran Khan unveiled Pakistan’s first electric motorbike, which is manufactured and distributed by Jolta Electric.

Sazgar Engineering Works in partnership with Haval, a Chinese auto manufacturer, to launch the first Pakistan-made hybrid SUV. 

Pakistan launched its first electric car Nur-E-75 on 14th August 2022. It is the first locally-produced electric car stemming from the collective efforts of the Dice Foundation, universities and the private sector launched in Karachi.

Made in Pakistan Cars 

Made in Pakistan Electric Car
Nur-E-75

Which company makes car in Pakistan?

There are many companies like Mercedes-Benz, MG Motors, Volkswagen, Toyota, Honda and Suzuki that are manufacturing cars in Pakistan.

The Pakistan Automotive Manufacturers Association (PAMA), a leading advocacy group for the country’s auto sector, was formed by local based-companies that manufacture. The objective of this association is the growth and development of the local auto industry.

In Pakistan, there are a few local brands that are developing and selling their cars alongside foreign companies that are expanding into the automobile sector to provide consumers with additional choices. Two notable examples in this regard are Regal Automobiles and United Auto Industries.

United Bravo and Prince Pearl, are two 800cc compact hatchback automobiles produced by these local manufacturers. These automobiles are even more reasonably priced than Pakistan’s Suzuki Alto base model.

The authorities are currently working to achieve the target of manufacturing 1 million automobiles locally every year. Currently, 250,000 units yearly production of automobiles are assembled and manufactured in Pakistan. 

PAKISTAN AUTO SHOW EXPO 2022

Pakistan Auto Show (PAS) Expo 2022 took place at Expo Centre Lahore. The event was arranged by the Pakistan Association of Automobile Parts and Accessories Manufacturers (PAAPAM) in partnership with the Federal Ministry of Industries and Production. 

Many leading domestic and foreign automobile manufacturers brands took part in this show. Pak Suzuki Motors introduced three new cars: Every (Wagon), XL-7 (Midsize SUV) and Wagon R Stingray (Hatchback).

Many small companies also showcased their locally manufactured products. Given the rising trend of EVs in Pakistan, the exhibition featured three-wheelers EVs with advanced specs and the country’s first-ever all-electric loader motorcycle and E-bike made specifically for women.

Imports

Pakistan mainly depends on imported cars and vehicle parts as cars are not manufactured in Pakistan but only assembled in the country. Pakistan spends foreign currency every year for importing auto parts.

In order to limit the import of automobiles, the government has imposed heavy taxes and duties on imported cars, which increases the price and made it harder to afford the middle-class person.

Future of Automobile Industry of Pakistan

On December 26, 2021, the Government of Pakistan launched a five-year plan between 2021 and 2026 to increase the production capacity of automobiles.

The automobile industry of Pakistan encouraged companies to focus on their manufacturing and create innovative cars that could compete with foreign automobiles while also giving customers’ preferences top priority.

After the local automakers also entered the auto market, both local and foreign companies are more focused on manufactured vehicles with the help of modern technology. Over the last 10 years, the use of automobiles has increased because of the increasing population, and the demand for automobiles is also increased.

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