Pakistan's automobile market has great potential and many car companies have entered

According to Nikkei, Pakistan's auto market is currently developing steadily at a healthy level. Last year, annual sales of passenger cars in Pakistan exceeded 200,000 for the first time, and all automakers in the country intend to increase production capacity to meet the increasingly prosperous market.

In order to seize the opportunity to attract Pakistan's middle class, many foreign car companies have also flocked to enter the Pakistani car market. Some new faces in the Pakistani market, such as Renault and Kia, will threaten the control of Japanese cars in Pakistan. In addition, the Pakistani government has also provided more preferential policies for car companies.

Car companies' sales volume increased as policy dividends increased

In fiscal year 2016 (ending June 2016), passenger car sales in Pakistan were approximately 218,000 units, a record high.

Among them, Suzuki Motor's Pakistan Suzuki Motor is the leader. Last year, Pakistan Suzuki received an order for 50,000 new cars from Punjab Province. The province purchased new cars mainly to increase employment, and the new cars will be used as taxis. In fiscal 2016, Pakistan Suzuki's sales volume was 128,000 units, accounting for about 58% of Pakistan's annual passenger car sales. In order to meet the growing market demand, the company plans to invest $460 million to build a new plant.

Indus Auto is a joint venture between Toyota Motor and the local House of Habib Group. Its main model is Corolla. In fiscal 2016, Indus Auto sales increased by 11% year-on-year to 65,000 units. Toshiya Azuma, vice chairman of Indus Auto, said that Pakistan's current automobile production capacity cannot meet market demand and predicted that Pakistan's sales will continue to grow. "Currently, India's annual automobile sales are about 4 million units (including commercial vehicles). Pakistan's population is about one-sixth of India's population, so Pakistan can achieve an annual automobile sales of 600,000 units."

Honda Atlas Cars, a joint venture of Honda Motor in Pakistan, also achieved record sales growth in fiscal 2016. In fiscal 2016, its Civic and City models sold 35,000 units, a year-on-year increase of about 50%. In addition, the company's executives also predicted that Civic sales in 2017 would be around 50,000 units.

There are many favorable factors in Pakistan that promote the development of auto companies. With the development of Pakistan's economy, household income is gradually increasing. In addition, the price of gasoline and diesel in Pakistan is on a downward trend, and the interest rate of auto loans has also dropped significantly, from 18% in 2008 to 10%. Recently, the China-Pakistan Economic Corridor has promoted investment in infrastructure in Pakistan, and in the near future, Pakistan may complete a highway network.

Entry of new car companies

In March 2016, the Pakistani government announced its 2016-2021 Automotive Development Policy, which provides many incentives for automakers entering the market, including reducing import taxes on parts. In order to seize the opportunity, Kia Motors has reached a partnership with the local Lucky Cement company and plans to jointly invest $115 million to build a joint venture. At the end of 2018, the two companies will start producing cars at their Karachi plants, with an annual output of about 25,000 vehicles.

Ali Tabba, CEO of Lucky Cement, said that with the increase in market demand and the increasing coverage of highways, now is the best time to enter the automotive market. Both companies said that the new plant's products will cover all market segments, including compact cars and sedans, and the main product focus will be the market between Suzuki's compact cars and Toyota Corolla (which is considered a luxury car locally).

Renault has also taken a similar approach. At the end of last year, Renault applied to the Pakistani government for permission to produce cars. Renault plans to start production in 2018 and has signed a memorandum of understanding with the Sindh Investment Board and has started a feasibility study. The Sindh Investment Board said it would invest $100 million, with a production capacity of about 6,000 vehicles in the first year and eventually expanding the capacity to 50,000 vehicles. In addition, Audi is also interested in producing cars in Pakistan.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.