Modern global standards: Speakers raise questions over local automobile industry’s ‘failure’

ISLAMABAD: Speakers at a conference have raised serious questions about the local auto-mobile industry’s failure to adopt modern global standards and inability to increase production and quality to target export markets.

The participants of the conference titled, “Revitalizing Pakistan’s Automobile Industry: Moving towards Consumer Welfare, Global Integration and Sustainable Mobility”, organised by the Pakistan Institute of Development Economics (PIDE) also highlighted that Pakistan’s auto industry was technologically lagging decades behind global standards.

The conference attended by representatives of automobile companies in Pakistan, automobile parts manufacturers, and academicians primarily focused on three major themes, (i) localization obsession and supply chain constraints, policy, reforms;(ii) industry development, and electrification and (iii) the future of mobility.

The participants highlighted the major issues being faced by the industry as a whole and firms individually that have kept the automobile sector from developing into a major industry in Pakistan and in the global automobile industry.

There was a unanimous agreement that the transition to EV is bound to happen, globally as well as in Pakistan, and we must decide if Pakistan wishes keep the pace with the rest of the world or stay far behind. In case of the former, it is important to foster competition in the automobile industry to provide consumers a fair chance of choosing a quality vehicle of their choice, and also look towards integrating into the global value chain.

Speaking on the occasion Dr Nadeemul Haque, vice-chancellor (VC) PIDE in his opening remarks to the conference put forth a pertinent question for the stakeholders to ponder upon. He expressed serious concern over Pakistan’s automobile industry’s inability to increase production, improve quality and increase exports despite existing for many decades. Haque said the lack of technological adoption by Pakistan’s automobile industry is the reason it is lagging decades behind the world. The VC PIDE also criticised Pakistan’s continuous efforts focusing on localising the entire automobile production chain which has to date not provided any benefit to the automobile industry, and suggested that instead, Pakistan must focus on value addition through technological advancements to become part of the global value chain of the automobile industry.

The PIDE team presented the findings of their ongoing research on the state of automobile industry in Pakistan and the future outlook. The Round Table Conference participants lauded PIDE’s efforts to not only research the industry but to involve all relevant stakeholders and initiate a necessary dialogue for course correction.

All participants wholeheartedly expressed their views on the issues and future ways of action to revitalise Pakistan’s automobile industry. While many differing opinions were shared, all members agreed that without the transfer of technology and skills, the automobile industry could not grow. Academia-industry linkages must also be strengthened for any indigenous innovation in the automobile industry that we wish to see. Academia must also step forward to provide research and development support to the industry, particularly by working on current areas of improvement but with a futuristic approach.

The role of government is also essential for flourishing the automobile industry in Pakistan. It must focus on developing facilitative policy environment and regulations, which at the moment are rather repressive.

The conference was informed that the global automotive industry was undergoing profound changes, characterized by a shift towards electrification and sustainability. Automobile firms and countries are adopting policies have been investing heavily to transition towards electric vehicles to align with evolving consumer preferences and addressing environmental concerns.

Additionally, advancements in autonomous driving technology and connectivity are reshaping the driving experience, albeit amid challenges such as semiconductor shortages and regulatory shifts. Pakistan’s automotive sector, with its diverse history marked by growth spurts and setbacks, is now undergoing a gradual recovery phase. While past decades witnessed phases of growth fuelled by government policies and the influx of Japanese brands, recent years have posed challenges like political instability and increased reliance on imports.

Copyright Business Recorder, 2024