pakistans japanesedominated car market poised for new entrants
Last Updated : GMT 06:41:18
Arab Today, arab today
Arab Today, arab today

Pakistan's Japanese-dominated car market poised for new entrants

Arab Today, arab today

Arab Today, arab today Pakistan's Japanese-dominated car market poised for new entrants

Despite heavy taxation on imported vehicles
Islamabad - AFP

Pakistan's car market has been dominated by Japanese automakers for decades, but a mini-economic revival looks set to attract new players from Europe and Korea into the mix.

Despite heavy taxation on imported vehicles, enthusiasm for owning a car in Pakistan has remained undented -- thanks in part to underdeveloped public transport in the country's sprawling cities, but also the social status it brings.

Toyota, Suzuki and Honda car assembly plants already work around the clock in the southern port city of Karachi and eastern Lahore -- yet customers can still wait for up to four months for new vehicles to be delivered.

Now demand for cars in the South Asian giant of 200 million people is accelerating even more quickly, as economic growth has reached its fastest pace since 2008 while renewed investor confidence and easing inflation have spurred consumer spending.
Keen to cash in, a delegation from German auto giant Volkswagen visited the country in recent weeks, according to Pakistani officials and German diplomats.

Company spokesman Christoph Adomat told AFP that while "Volkswagen is constantly evaluating market opportunities on a worldwide basis... there are no decisions for an investment from Volkswagen side in Pakistan".

Miftah Ismail, the chairman of Pakistan Board of Investment who took part in the talks, said Volkswagen was not the only company expressing an interest.

"There are a number of other companies from (South) Korea and Europe that we are talking to who are thinking of setting up assembly plants in Pakistan," he said, without naming the firms.

- Japanese stranglehold -

US and European cars dominated Pakistan's roads in the early years after it gained independence from Britain in 1947.
But fuel prices made their compact, efficient Japanese rivals more popular and from the 1960s onwards manufacturers like Toyota, Suzuki and Honda gained a stranglehold on the market.

Italy's Fiat made a brief foray in the 1990s, while South Korea's Hyundai as well as Daewoo-owned Chevrolet tried -- and failed -- to gain a foothold in the 2000s before the financial crisis forced them to exit.

Because Pakistan charges heavy duties on imported cars less than three years old, Japanese companies with in-country assembly operations can set prices significantly above the regional average.

The bottom-of-the-range Suzuki Mehran costs the equivalent of $6,300 in Pakistan but sells for around $3,900 in neighbouring India. The most popular Corolla 1.3 sedan starts at 1.6 million rupees ($16,000), but buyers have to wait months or pay $1,500 for prompt delivery.

The news that Volkswagen was exploring options to enter the Pakistani market has excited car enthusiasts, who are tired of high prices and limited choices.
"I think it is a great idea because Volkswagen cars are value for money and reliability," said Romano Karim, a fan of the classic Volkswagen Beetles from the 60s and 70s that can often be seen on Pakistan's roads.

Haji Mohammad Shahzad, chairman of the All Pakistan Motor Dealers Association, added that having Volkswagen in the market would help drive costs down.

"The monopoly of big three could be broken if Volkswagen produces at least 20,000-25,000 cars annually," Shahzad told AFP.

- Renewed confidence -

Global auto giants are attracted by Pakistan's booming economy, which the International Monetary Fund predicts will grow by 4.5 percent in the next financial year.

Investor confidence in the medium-sized economy of $232 billion has improved since a new business-friendly government led by Nawaz Sharif took power in 2013, with Karachi's share market among the world's top 10 performers in the past year.
The country is also undergoing a major construction boom driven by Chinese investment after President Xi Jinping visited Islamabad in April to unveil a $46 billion investment plan known as the China-Pakistan Economic Corridor.

Car sales have also boomed thanks to the growth of car leasing and financing facilities. Sales in the 11 months to May this year rose 30 percent from a year earlier, according to industry group the Pakistan Automotive Manufacturers Association.

Baber Kaleem Khan, editor of PakWheels.com magazine, said Volkswagen would be well poised to tap into the lower to mid-range market.

"Pakistani automakers haven't really had much competition because their respective domains are well protected by monopolistic business practices," Khan told AFP.

"But given VW's impressive small-range of vehicles, the German automaker can take the market from the ground up and start working to the top."

 

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

pakistans japanesedominated car market poised for new entrants pakistans japanesedominated car market poised for new entrants

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

pakistans japanesedominated car market poised for new entrants pakistans japanesedominated car market poised for new entrants

 



Arab Today, arab today
Arab Today, arab today Skincare PR Performance Full Year 2017

GMT 10:35 2018 Monday ,22 January

Skincare PR Performance Full Year 2017
Arab Today, arab today New hunt for flight MH370 gets under way

GMT 02:36 2018 Wednesday ,24 January

New hunt for flight MH370 gets under way
Arab Today, arab today Modern colorful bedroom renovation

GMT 11:23 2017 Thursday ,21 December

Modern colorful bedroom renovation
Arab Today, arab today France sanctions businesses linked

GMT 01:58 2018 Wednesday ,24 January

France sanctions businesses linked
Arab Today, arab today Turkey detains dozens more

GMT 02:09 2018 Wednesday ,24 January

Turkey detains dozens more
Arab Today, arab today
Arab Today, arab today

GMT 07:22 2017 Thursday ,23 November

Zimbabwe's next leader heads home after Mugabe exit

GMT 07:23 2017 Thursday ,23 November

Zimbabwe's next leader heads home after Mugabe exit

GMT 22:38 2018 Tuesday ,23 January

Bahrain Press headlines

GMT 20:34 2018 Saturday ,20 January

Bahrain press headlines

GMT 16:25 2016 Thursday ,22 December

Italian bank Monte Paschi edges closer to state bailout

GMT 06:03 2014 Wednesday ,09 April

Please .. Let Gaza breathe!

GMT 09:12 2017 Friday ,17 November

Gleam Futures represents Grace Beverley

GMT 04:18 2017 Sunday ,26 November

Bella magazine appoints celebrity writer

GMT 06:00 2017 Sunday ,29 October

Childrenswear brand Once appoints Dyelog

GMT 16:33 2014 Thursday ,13 November

Al-Ehtimam Bil Aakhareen

GMT 03:34 2017 Sunday ,05 November

Needle & Thread relocates press office

GMT 14:56 2017 Thursday ,21 December

Ryanair says formally recognises pilots' union

GMT 01:41 2017 Saturday ,12 August

Moroccan video sparks debate on sexual harassment
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday