From the dawn of Pakistan’s automotive journey, the industry’s performance has been judged through a narrow lens – the spotlight always shining on the big names, the globally recognized car brands. Yet no one has spared a glance for the quiet engine driving it all: the auto parts manufacturers.
Scattered across the country are over a thousand small to medium enterprises, employing more than half a million people directly, and supporting 2.5 million more indirectly.
These businesses don’t get showroom launches or ribbon-cutting ceremonies. But they are the lifeblood of the sector. If carmakers are the face, these manufacturers are the bones, muscle, and heartbeat.
Just look east. The industrial powerhouses of today – China, India, Thailand, Indonesia - all began from places far behind where Pakistan stood decades ago.
What was their first step in their changing trajectory? An automotive industry that was protected, nurtured, through consistent policy and a stable country brand, and used as a launchpad for technical capability, job creation, and eventually – global export.
However, nothing operates in a bubble. The ability of a factory to export its product is a function of the performance of the country it operates in.
And yet, in Pakistan, the vendor industry has been treated like the neglected stepchild of automotive policy.
While assemblers have received all the attention: incentives, programs, and government support. Initiatives meant for vendors were either shelved, half-heartedly implemented, or never taken seriously. Then came the 2016 wave of new entrants, welcomed with enthusiasm, but little accountability. These newcomers were allowed to import kits, sell quickly, and skip the heavy lifting of localisation. As the market numbers were divided, the local ecosystem was hollowed out and volumes scattered. The base was ignored.
To make matters worse, imported used cars cannibalised local volumes and quietly sucked the lifeline from the parts sector: volume. If fixed costs aren’t allowed to be divided over reasonable volumes, you can’t expect any company to be healthy.
Last year, a country of 241.5 million Pakistan’s car market was 125,000 cars. Indonesia’s by comparison with a comparable population size of 283.4 million, was 850,000 – almost seven times more.
Vendors need volumes to survive, and with each new government policy they were stripped away; first with the new entrant’s policy (Auto Development Policy 2016-2021), then with the opening of used cars and now with the proposed tariff rationalisation policy.
And now, today, in the name of “liberalisation” and “consumer choice,” some are proposing to strip away all remaining preferences for our local industry by opening the floodgates to completely built imported cars. Cheaper? Maybe. Better? Depends. But the real question is: better for whom?
They say it’s for the ‘common man.’ But which common man? The one who decides between a new imported SUV or a Japanese hybrid? Or the one on the shop floor manufacturing parts, earning a living, sending his kids to school who is part of an ecosystem that keeps Pakistan working?
We must ask: who really benefits when policy favours foreign showrooms over local workshops? When we make it easier to import than to manufacture? When, in the name of free trade, we make our own industry too free to fail?
Is the government simply overlooking the vendor base – or is it setting it up to fail? Is this neglect… or is it deliberate?
We need reforms, but the right reforms.
The article does not necessarily reflect the opinion of Business Recorder or its owners.
The writer is an undergraduate student at the Lahore University of Management Sciences
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