Strategic Analysis of the Pakistan Automotive Market, Forecast to 2025

With An Expected Growth Rate of 7.2%, The Industry is Ripe for New Opportunities, Backed by a New Automotive Policy and Political Stability

The economies in developed countries have either stabilized or declined over the past few years. As a result, automotive companies are struggling to grow their sales in these markets. End-customers are either continuing to use their existing vehicles or are looking at alternative modes of transport. To sustain growth, automotive OEMs are continuously looking at new markets for expansion. Pakistan is one such market which holds significant growth potential.

With an extremely low penetration rate of approximately 13 cars per 1000 inhabitants and a rapidly growing urbanization rate of 40.5%, Pakistan has huge potential to grow its automotive market. So far, only three manufacturers- Suzuki, Honda and Toyota-assemble vehicles in the country, and these Japanese OEMs obviously dominate the domestic automotive market.

The Pakistan government is keen to incentivize new and existing OEMs to introduce new models to enable end-customers to expand their choices. The presence of only three OEMs gives an opportunity for new OEMs to enter the market and satisfy the unmet need for end-customers.

A change in the government’s automotive policy is expected to spur local OEM investment in the country in terms of assemblers and thereby contribute to an increase in sales. This is expected to further propel growth in downstream industry activities, especially automotive servicing and parts.

End-customers struggle with poor vehicle quality, inferior technology, and outdated model designs offered by the three existing manufacturers. Further, the high cost of financing is detrimental to the purchase of new vehicles as end-customers are hindered from buying new cars, which forces OEMs to continue producing old models because of lack of growth.

The aim of this study is to provide an overall perspective on the passenger vehicle market in Pakistan. It discusses the capabilities of vehicle manufacturers, how the market is currently positioned in terms of vehicles sales, who are the leading OEMs and, most importantly, how is the market expected to change in the future.

Key Issues Addressed

• What are the best performing brands, models, and segments in the Pakistan automotive industry?
• What are the industry dynamics in terms of vehicle assembly and who are the leading OEMs in the market that manufacture or assemble vehicles?
• What does the future hold for Pakistan in terms of automotive growth and how will production and sales help support this?
• How are new mobility solutions, in terms of car-sharing and ride-sharing, growing in the industry?
• If they are expected, how will regulations change in the next few years and how will this impact the automotive industry?