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Review of automobile imports

According to the Pakistan Bureau of Statistics (PBS) imports into Pakistan during December 2019 worth to Rs. 625,463 million (provisional) as compared to Rs. 612,215 million (provisional) in November, 2019 and Rs. 609,596 million during December 2018 explaining a rise of 2.16 percent over November, 2019 and of 2.60 percent over December 2018. In terms of US dollars the imports in December 2019 was $ 4,037 million (provisional) as against to $ 3,940 million (provisional) in November, 2019 explaining a rise of 2.46 percent but declined by 8.35 percent as compared to $ 4,405 million in December 2018.

Statistics showed that imports during July – December 2019 totaled Rs. 3,635,558 million (provisional) as compared to Rs. 3,604,706 million during the same period of previous year explaining a rise of 0.86 percent. In terms of US dollars the imports during July-December 2019 totaled $ 23,229 million (provisional) as compared to $ 27,952 million during the same period of last year explaining a decline of 16.90 percent. Furthermore in the first 4-month of the present fiscal year, considering the imports of automobiles, the numbers have dropped considerably as against to the corresponding period of the previous fiscal year.

The plunge in imports is about 54 percent, which is considerable. Considering imports in dollar value, the imports declined from $245,430 million to $ 108,350 million, a drop of $137,080 million while comparing the5-month (July-November) of the current fiscal year with the same 5-month of the same year. Such a fall in imports the industry experts revealed, has led to a fall in the trade deficit, which is good for the economy. However, this fall in imports has also unfavorably affected the businesses of car dealers and the transport sector of the country.

In Pakistan, the main automotive imports comprise of CBU/CKD cars, trucks and tractors. Parts and accessories and motorcycles also account for an important share of imports. As opposed to this, the base of exports is small and narrow. Japan is traditionally the largest supplier of the range of auto-parts products. Emerging sources are Turkey in tractors, Singapore and Thailand for cars and parts, South Korea in trucks and China in the case of motorcycles.

Pakistan has organized a small market ‘niche’ for motorcycles in two SAARC countries, Afghanistan and Bangladesh; tractors in African countries such as Nigeria and Kenya; and for auto-parts in USA and Italy. Moreover, from the period of July to November 2019, the imports of CKD (completely knocked down) and SKD (semi-knocked down) units declined from $205,041 million to $92,229 million, a fall of 62.69 percent as against to the corresponding in 2018. The imports of CBUs (completely built units) declined from $36,805 million to $12,588 million, a drop of 67.45 percent as against to the corresponding period in 2018. Both of these falls are massive and show skewness towards the reduction of imports. Analysis also showed that the imports of buses, trucks, and other heavy-duty vehicles dropped from $10,287 million to $6,932 million, a decline of 40.94 percent. This decline has unfavorably affected the transportation industry, and buses, trucks, and other heavy-duty vehicles are not being manufactured in large numbers in the country. Furthermore, consumers also have less variety of these domestically-manufactured automobiles. Commercial automobiles such as trucks are important for the industry to accelerate the transportation of raw materials and finished goods. Buses are also crucial for citizens regularly commuting between cities for work, education, or leisure.



The imports of motor cars have seen the second-largest dip as against to the previous fiscal year. The decline is from $26,300 million to $5,553 million, a drop of 77.70 percent. The imports of motorbikes have also declined considerably from $218 million to $103 million, a dip of 82.11 percent. In the short-run, this huge decline in the import of cars and motorbikes has been detrimental for car dealers. These car dealers pulled in an important chunk of their total revenues from the sales of imported cars.

Dissimilar sources furthermore recorded that Pakistan’s share in world export trade of automobile products is miniscule. The cited factors constraining the growth of export were the incapability to enter the export market, lack of consciousness of export possibilities, lack of motivation to export owing to un-competitiveness as a result of low levels of production and high level of profits from the local market. The chief ones were: firstly, the absence of assistance through the Commercial Counsellor’s attached to Pakistan’s diplomatic missions overseas and the Export Development Fund in identifying opportunities, and lack of skills in performing the task assigned to them; secondly, the lost opportunity in accessing technical help obtainable from global sources for enhancing the quality of output and transiting from reverse engineering procedures to additional sophisticated processes; thirdly, high cost of production as a result of low productivity and low rates of capacity utilisation exacerbated through the rapid fall in the Rupee’s exchange convertibility rates was also identified as a main inhibiting factor; and fourthly, perhaps the most irritating factor, the delays in refund of domestic and import input taxes paid on exported goods, which impacts on working capital and thus on output through the inability to finance inventory replenishment.

In last i would like to mention here, the automobile industry in Pakistan emerged as one of the quickly growing sectors during last couple of years. The sector affected the economy absolutely from many aspects. The industry contributed a lot to GDP and generated direct and indirect employment, as it gives birth to many subsidiary industries in Pakistan. Fully consideration is required to boost this industry in Pakistan.

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