KARACHI: The government’s high auto taxes of 37-43% are severely hampering Pakistan’s auto industry growth. This was stated by Abdul Rehman Aizaz, Chairman of the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM), at the inauguration of the Pakistan Auto Show 2023 at the Karachi Expo Center here.

Aizaz stated that around 300 auto part manufacturers in Pakistan supply thousands of components to domestic car assemblers, generating significant employment and greatly contributing to the country’s industrial output.

However, due to low production volumes, non-tariff barriers and the reluctance of international companies to transfer technology, localization levels in the auto industry remain low compared to the motorcycle and tractor segments where localization is around 90-95%.

PAAPAM members say ‘significant’ import substitution, exports possible in Pakistan

He urged car assemblers to work with global auto part makers and local manufacturers to set up joint ventures and tap into Pakistan’s market potential. Aizaz noted that while passenger cars and SUVs get attention, the auto industry also includes highly competitive motorcycle and tractor segments. Pakistani manufacturers are exporting to international markets due to high quality and cost competitiveness driven by localization.

Zain Shariq, Convener of the Pakistan Auto Show 2023, mentioned that over 150 companies including Chinese and Iranian manufacturers are participating in the show, themed ‘Synergizing Pakistan’. The event aims to highlight the manufacturing capabilities of the local auto industry which also caters to the defense, aviation, and healthcare sectors.

A symposium titled ‘Synergizing Pakistan’ will also be held during the event on October 28 where industry experts and academia will discuss ways for the manufacturing sector to enhance competitiveness and tap local and international markets.

Copyright Business Recorder, 2023