The IMC's CEO, Ali Jamali, said Pakistan was about to achieve 6 percent economic growth this year as per capita income was expected to reach over US$1,700. He said growing economy and per capita income would eventually increase the demand for automobiles which is set to cross the 500,000 mark by 2022.
"Industry is also gearing up to meet the growing demand with both existing and up to 6 new players investing heavily to meet the growing demand," he said, adding that Indus Motor had already poured over Rs 4 billion investment in its production facility and increase its capacity by 20 percent ie up to 75,000 units annually by second quarter of 2018.
He said IMC procured Rs 150 million worth of local parts every day from local vendors which accumulated to Rs 40 billion annually as the company had achieved 64% localization for Corolla. He said IMC has enabled over 30 Technical Assistance Agreement with global auto part makers which has resulted in technology and knowledge transfer to Pakistan. He said huge investments are also being made in local vendor industry to cater to the growing demand coming from both existing and new OEMs and aftermarket as well.
"We have been fighting against menace of premiums for a long time. Our recent breakthrough initiative of cancelling multiple booking orders has helped counter premiums," he said, adding that thousands of orders have been scrutinized for investors' activity and numerous have been cancelled. He said they have been regularly running customer education campaign against premium and they have gone extra mile to fight this menace. He said, now, it is government's responsibility to take initiatives such as wholesale retail mechanism and increased transfer taxes to discourage premiums.
"Cost of production has increased manifolds due to rupee depreciation, RD on raw materials and price hike of steel, fuel, copper and other factors which will result in increase of retail selling price of vehicles by 5 percent or 0.1 million soon," he said.
Aamir Allawala, PAAPAM's ex-chairman, said new investments are on the horizon in automobiles. He said most of the vendors are not only increasing capacities but are also upgrading technologies. He said some new entrants have also announced investment plans. "Addition of a European and two Korean brands will add variety in the car section and create healthy competition," he said.
Optimistic macroeconomic indicators, coupled with breakthrough projects such as CPEC can help Pakistan to make it to the league of top 10 automobile manufacturers in the world that also need transparent and consistent policies. He said given the incoming investment, Pakistan Auto Market is likely to cross 500,000 units mark.