Auto Industry Analysis in Pakistan

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“THE ROLE OF AUTOMOBILE INDUSTRY IN THE ECONOMY OF PAKISTAN ITS GROWTH. ITS IMPACTS NEGATIVE AS WELL AS POSITIVE.” Syndicate # 3 Syndicate Adviser: Dr. Shagufta Zareen Members:
Muhammad Naeem Arshad Abbasi Ghazala Nasir Romana Alam Naveed Akhtar Khurram Mangi Mahmood Alam

Directorate General of Training & Research, Federal Board of Revenue, Lahore

Outline:

 Introduction  Literature Review

 Evolution of Automobile Industry with special reference to Pakistan  Automobile Industry in Pakistan and comparison with the Indian counterpart  Automobile Industry and the Allied industries o Workshops o Spare parts markets  Impact on economy  Contribution to the GDP  Impacts o Positive impacts  Economic impacts  Social impacts o Negative impacts  Economic impacts  Social impacts

 SWOT Analysis  Conclusion  Bibliography

Introduction Since ages man is trying hard to cover the distances between different places in the shortest possible time. In order to fulfill this dream man invented the automobile and within years the automobiles became a common mode to travelling to different places and replaced the traditional means of using animals . With this increasing demand for the newly invented automobiles its production also increased many folds. This industry also gave rise to many allied industries and provided jobs to millions of people all over the world. This industry also contributed its due share in the GDP of the country via import duties, sales tax, federal excise duties etc. However the increasing number of automobiles also had different impacts which affected human lives, atmosphere, social fabric etc.

Literature review The group studied variety of literature to gather in depth knowledge of the assigned topic of research study which includes periodicals, articles, research reports, case studies, economic analysis, financial data of major companies, economic survey of Pakistan , websites and newspapers. Mr. Zahoor Sheikh Sarwar (CASE), Mr. Azam Ishaque, (CASE), Mr. Nadeem Ehsan, (Center For Advance Studies in Engineering), Mr. Danial Saeed Pirzada, (Center For Advanced Studies in Engineering), and Mr. Zafar Moeen Nasir, (CASE) in their report published in International Journal of Productivity and Performance Management, has identified that automobile sector has huge economic potential and the study identified the prevalent condition of productivity in automotive manufacturing industry of Pakistan and indicated the possible areas for enhancing productivity. The findings of this research have revealed that effective utilization of role of technology can enhance the productivity of Pakistani manufacturing firms drastically. Pakistan Auto Industry Development Program (AIDP-2006), an study conducted by Ministry of Industries and Production, Government of Pakistan states that the Pakistan Auto Industry has become a leading industrial sector to steer the growth in large scale manufacturing sector. The high economic and job multiplier effect of this industry and its deep forward and backward linkages in allied industries, make the auto industry a key player in the national economy. The report further elaborates that Pakistan is amongst a few countries of the world which manufacture all kinds of vehicles i.e. 2/3 wheelers, motorcars, LCVs, tractors, prime-movers &

trucks and buses. The total country requirements are generally met from the local production except the import of certain categories of trucks & prime-movers. Import of used cars is allowed to the bonafide ex- patriate Pakistani’s and travelers only under the baggage scheme. The presence of few of world acclaimed brands and multinationals in the manufacturing of vehicles for the last 2 to 3 decades and their regular expansion plans speak of their confidence on the market, government policies and economic potential of the country. Pakistan auto industry turnover during the year 2005-06 crossed US $ 3.6 billion which comes to 2.8% of GDP...
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