Canada Global(Web News) With a 55% decrease in vehicle sales in the year 2023, the auto industry in Pakistan continues to suffer.
Due to the foreign exchange crisis, car production was badly affected by the ban on imports until last year and all OEMs suspended production. Production at parts factories also fell by 70 percent. Due to the decline in vehicle sales, the national exchequer has also faced a significant decrease in revenue.
Difficulties in opening LCs and difficulties in foreign exchange management prevented the import of critical components, similarly raw materials for locally manufactured components could not be imported. Despite the lifting of the import ban, demand for vehicles has not recovered due to high interest rates. Due to the depreciation of the rupee, the increase in vehicle prices could not continue in the last quarter of 2023, compared to the previous level. This decrease is minor due to which the sales could not increase.
Pakistan’s auto industry also failed to achieve the policy goals of introducing low-cost vehicles and exporting vehicles manufactured in Pakistan. Automobile manufacturers say that there is no intention to introduce small and low-cost vehicles in Pakistan, mostly SUV models have been introduced. Along with new players entering the market, old players are also gaining popularity. With the introduction of SUVs and hatchbacks including sedans, people have no choice but to buy used reconditioned vehicles.
The prices of used imported vehicles also increased throughout the year, but according to car dealers, there has been a significant decline in sales due to the increase in the prices of old vehicles. The auto industry has pinned its hopes on the year 2024. The auto industry hopes that the new year will be the year of hybrid technology that will pave the way for electric vehicles.
The auto industry is hopeful that the formation of a stable government after the general elections will end political uncertainty, which will have an impact on economic activity, leading to an increase in vehicle sales at the start of the new year. Five lakh vehicles will be reached by 2030, but for this policy continuity and reduction in interest rate is inevitable.
