Vendors, auto parts makers urged to explore global business opportunities

KARACHI: A symposium on ‘The Future Drive: innovations, exports, trends, and way forward for auto parts manufacturers was held on the second day of the Pakistan Auto Show on Saturday at Karachi Expo Center.

Imtiaz Rastgar, an export specialist, discussed export possibilities for light engineering and vendor industries saying Pakistan’s vendors need to enter into the world market.

“The options for vendors and parts manufacturers are quite many which include orthopedic implants, hardware and building material, gearbox market, steering wheel, hydraulic pumps, pistons etc.,” said Imtiaz.

Danial Malik, Chief Executive Master Changan Motors, said in his address that Pakistan has one of the lowest motorization ratings with 17 vehicles per 1000 persons. “We need to have strategic free trade agreements with RHD and CBU markets and give incentives and subsidies to grow our auto industry,” said Danial.

He informed that Changan has started exporting vehicles to Kenya from this October as 14 Oshan X7 have been exported till date.

Former chairman PAAPAM Aamir Allawala said that diversification is a way forward for auto parts manufacturers by expanding operations into new, unrelated products, services, markets and industries.

“The auto parts manufacturers are facing many issues including continuous pressure from OEMs to reduce cost and prices, erosion of profitability due to cost inflation, profits freezing, and increase in input costs,” said Aamir.

He added that joint ventures with China are a great opportunity for Pakistani businesses in this period of crisis as China is looking for alternate markets.

“Increasing labor cost (around $700/month) and imposition of 25% duties on ‘make in China’ products by the United States are the main reasons why China can invest in Pakistan,” said Aamir, adding that FTAs with China offer concessions to Pakistan in agriculture sector.

Dr Adil Nakhuda, assistant Professor and research fellow at IBA, said that there is a need to empowering SMEs and developing policies to encourage their participation in trade.

Tariq Khan, Senior Director Corporate Strategy and Regulatory Affairs at Indus Motor Company, said that we don’t have tooling capability in Pakistan so we should develop few tooling centers.

He added that aftermarket parts potential is immense but we are importing aftermarket parts so we should make them locally while we can also enter into textiles, food processing, cement, plastic, oil and white good.

“We can explore the market of Saudi Arabia where 7 top global suppliers have committed huge investment,” Tariq said.

Copyright Business Recorder, 2023