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The trucking sector is garnering immense interest from everywherelocal and Chinese companies no question, but also European companies and Korean companiesand for good reason. The sheer growth expectation is enormous.

Trucks have historically played a primary role in logistics due to the inefficiency of the railway network in Pakistan. Now more than ever, because of CPEC and other infrastructural development, the transport sector will be in the spotlight; with trucks in the center.

Compared to emerging economies however, the production here at home is low. Trucks manufactured locally have gone up from 5,000 to about 7,000 annually in the past two years. Comparatively, India produces about 200,000 trucks a year; Malaysia around 50,000 while China produces about 2 million trucks a year, which the country also exports across the world.

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In Pakistan, the culture of re-assembled, resold and outdated used-trucks has persisted for years where quality is greatly compromised. But the demand for high-tech, fuel efficient trucks for large scale logistics is now picking up, especially since a lot of quality trucks are needed to maneuver high altitude roads and highways. FY17 is showing marked upward mobilityon average, local manufacturing has increased from 400 trucks per month to 700 trucks, according to data reported by Pakistan Automotive Manufacturing Association (PAMA).

Hinopak remains the largest manufacturer with an operational assembly line circa 1995 and captures nearly 35 percent of the market; with Isuzu trucks at have 22 percent while both Nissan and Master Motors have between 12-13 percent of share in the market.

Companies such as the Chinese FAW that have an assembly plant of 15,000 units in collaboration with local partner Al-Hajj group manufacture, have about 15 percent of the market share; and are expanding their facility to 20,000 units. Another company Dysin assembles Chinese Sinotruks in the country, though annual numbers are not available at the moment; Dysin has sold over 1,500 trucks in the country, 800 of which are operating in many of CPEC projects. International brands such as Volvo also sell their trucks in Pakistan.

If Pakistan was producing 7,000 trucks annually, it is possible FY17 could reach 10,000 trucks, as more truck manufacturers are hoping to enjoy the spoils. The demand is pushing collaborations such as Dewan with Korean Daehan trucks; and FAW with Hyundai. Just a few weeks ago, European giant MAN SE once again expressed interest in setting up a local assembly plant in Pakistan. The first time we heard MANs interest was back in 2013. Recall that the company has been selling buses and trucks in the country since 2008 and is now owned by Volkswagen. The National Logistics Cell (NLC) that operates the biggest fleet in the country earlier had plans to invest in a production plant to replenish its fleet with MAN and perhaps we will these plans reach fruition.

The growth prospects are definitely there. In order to attract new investors, the current auto policy is an excellent start that can built upon. From the logistics point of view however, a lot of works needs doing, which will feed into the growth of the larger transportation sector. This column has discussed them earlier at length (Read Trucking policy: Need for speed, published on Nov 21, 2016).

Trucking and logistics go hand-in-hand. The last trucking policy was formulated in 2007 and never implemented. A proper policy is urgent right about now since a lot of logistics and allied industries have the potential to make heavy investments in this industry. Truck sales will also see a boom when the policy ensures quality assurance and discourages reuse and resale of old trucks that are harmful to roads and transportation; and are used by majority of logistic companies. A functioning regulatory environment bolsters demand, and makes investments in local manufacturing easier. Surely, the latter is a goal of the government. ­

Copyright Business Recorder, 2017

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