Pakistan’s lacklustre automobile industry
Few major players and a lack of good local options at different price points are some problems facing Pakistan’s automobile industry.
There are currently three major players in the automobile industry in Pakistan; Indus Toyota, Atlas Honda, and Pak Suzuki. Pak Suzuki is the undisputed king of the lower priced, sub 1300cc, portion of the market. Indus Toyota is the leader in the market above 1300cc with Atlas Honda closing the distance in terms of the difference in the number of sales per year. These “big three” companies hold almost all of the market share which in turn has allowed them to monopolize the market and has discouraged other companies from setting up shop in Pakistan.
This situation leaves customers to choose from very few poor quality options. Due to this a trend has started to emerge; Pakistani customers have started to choose second hand imported Japanese cars which undoubtedly offer better quality and performance than the local offerings.
Take for instance the sub 1000cc local market. Customers have to choose between the Suzuki WagonR, the Suzuki Cultus, or the Suzuki Mehran. These cars do not offer much in terms of performance, comfort, or safety. The fuel economy for these cars is not comparable to Japanese imports, cabin comforts are minimal and there are no features such as push to start, keyless entry or eco-idling. Only the top end Cultus offers ABS (anti-lock braking system) and air bags. Customers can go for imported Japanese cars such as the Toyota Passo, Toyota Vitz, imported Suzuki Wagon R, and Daihatsu Mira etc. These cars offer more in terms of comfort, performance, and safety features than the local options.
In the larger car segments the story is the same; very few options to choose from, and not much difference to offer in terms of driving oriented benefits. In fact customers in Pakistan are willing to spend more money on second hand hybrid Japanese cars such as the Toyota Aqua, the Honda Fit, the Toyota Prius, and the Honda Vezel. This shows that people would gladly buy fresh new cars packed with the latest technological features if they were offered by local companies.
There is some hope for the customers of Pakistan though, the government has released a new auto policy regarding safety features and anti-theft devices in cars, and international brands such as Nissan, Renault, Audi, and Volkswagen have expressed interest in investing in Pakistan. However if the “big three” continue to monopolize the market, and the government does not make major changes in its policies, development in the industry will be very difficult.