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PPT : Pakistan Association Of Automotive Parts And Accessories Manufacturers
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Imperatives for Pakistan vendor industry
o Defend the core domestic market – competitive advantage
o Tap on SOS basis into the global auto parts & component opportunity
o Lacks economy of scale – 95% SMEs.
o Lacks technology, innovation & human skills
o Domestic market growing at 27% per annum but will lag in capacity.
o Domestic market size incapable to address the export opportunity.
o Presence of world leading OEMs Brands
o Higher cost of production countries – Shifting to Low cost manufacturing countries
o Developing to global quality standards.
o Growth in the domestic automotive market
o Increased competition from low cost countries i.e. China, India, Thailand, Malaysia, Indonesia, and Taiwan because of
+ Falling trade barriers
+ Structural disadvantages in certain areas (Lack of utilities, clusters/ SEZs & Roads etc. )
+ Higher cost of doing business (e.g. High power cost, financial cost, obsolete skills, law & order situation and technology)
PAKISTAN ASSOCIATION OF AUTOMOTIVE PARTS AND ACCESSORIES MANUFACTURERS
FACTORS AFFECTING THE DOMESTIC AUTO PARTS INDUSTRY
* Low production volumes of vehicles in the country severely affect the large scale / mass auto parts production in the country.
* Inconsistent government policies.
* Import of secondhand vehicles and old parts.
* Under invoicing and smuggling.
* High taxation (i.e. import duties, sales tax, income tax, CVT etc.).
* Lax monitoring of deletion targets by Engineering Development Board.
* Restrictions on selling OEM parts to the replacement market / export etc.
PAKISTAN ASSOCIATION OF AUTOMOTIVE PARTS AND ACCESSORIES MANUFACTURERS
ROLE OF AUTO PARTS INDUSTRY IN OUR ECONOMY
o Small to Medium Sized (SMEs) Family owned businesses
o Seen as a creator of new jobs and absorber of unemployment
o Creative and innovative but tend to be risk averse and thus retreat to consolidate.
o Increasing competition due to falling barriers and structural disadvantages in key areas (high power cost, poor conditions of roads, transport, water and communication etc. )
o High growth rate in domestic market but its small size restrict entry to global market
o Presence of world leading OEM’s Brands.
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Category : General AutoSource : www.pakboi.gov.pk
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