Muhammad Umar Waqqas
KARACHI: Director Sales and Marketing, Proton Apollo Motors Moiz Ahmed says, “The Pakistani auto sector has incredible potential that can produce and sell 500,000 units of light commercial vehicles yearly. These possible assumptions are based on ‘x’ numbers of cars per 1000 people and our per capita income. Indonesia is an example with similar demographics, during 2004-5, they had almost at the same per capita income of $1403, sold around 360,000 units. This is the same when the Pakistan auto sector was at its peak before Covid. Now Indonesia has an average $5000 per capita income and sales standing around one million units.”
He said, “We can hope that in a 10 year period Pakistan auto sector can achieve half of what Indonesia has achieved. Economic and political stability is an absolute need of our country to achieve all of the economic goals. Yet another easy example shows the great potential in Pakistan, at peak Pakistan was averaging 1.54 vehicles per 1000 people while the World average was 10 vehicles per 1000 people. It shows a great potential in the auto manufacturing industry, but the economic and political stability in the country is essential to move on this track.”
Moiz pointed some problems and uncertainties the auto sector has been facing since long are constant volatility in the USD rate that as he says “has brought us to continuous price increase in raw material purchases, government taxation, law and order situation in the country, inflation, borrowing cost are few challenges that we must have to mutually overcome within a very short time.”
He says, “Government should introduce such policies which may grant long-run stability and slash taxes to let manufacturers produce greater volumes. It will let the government generate higher tax earnings on volume and side by side enable competitive prices for consumers. Not only this, through a volumetric approach, localization / deletion will be encouraged which will reduce the USD impact on the prices of vehicles. The practicability of the above depends on many factors, most important ones include, economic and political stability in the country which will surely revive consumers’ confidence to spend.”
“Various brands are penetrating the Pakistani market, they should capitalize on changing demographics where demand will be driven by more than 65% of the population below 30 years of age. They should re-evaluate the customer experience cycle and revamp the selling model to target digital shifts in the demographics. Having said that, digitalization has educated consumers who are now looking for the quality, reliability, specifications, innovation and new generation products. Other than this, major penetration would occur when new brands will focus on the lower-end market or lower middle-class group opting for cheaper vehicles with smaller engines below 1000cc,” Moiz Ahmed tells the TFD.