PIDE Highlights Crisis: Pakistan's Auto Industry Technologically Decades Behind Global StandardsBreaking

May 15, 2024

Pakistan Institute of Development Economics hosted a round table discussion titled ‘Revitalizing Pakistan’s Automobile Industry: Moving towards Consumer Welfare, Global Integration & Sustainable Mobility’ here in Karachi. The Round Table Conference was attended by representatives of Automobile Companies in Pakistan, Automobile parts manufacturers and academicians. The conference focused primarily on three major themes, Localization Obsession and Supply Chain Constraints, Policy, Reforms and Industry Development, and Electrification and the Future of Mobility. The participants highlighted the major issues being faced by the industry as a whole and firms individually that have kept the automobile sector from developing into a major industry in Pakistan, and in the global automobile industry as well.

Dr. Nadeem Ul Haque, Vice Chancellor Pakistan Institute of Development Economics in his opening address to the conference put forth a pertinent question for the stakeholders to ponder upon. He questioned why has Pakistan’s automobile industry despite existing for many decades not been able to increase production numbers and quality to target export markets? Dr. Nadeem expressed his worry over the lack of technological adoption by Pakistan’s automobile industry which is lagging decades behind the world. Dr. Nadeem also criticized Pakistan’s continuous efforts focusing on localizing the entire automobile production chain which have to date not provided any benefit to the automobile industry, and suggested that instead Pakistan must focus on value addition through technological advancements to become part of the global value chain of the automobile industry.

Later, the PIDE team presented the findings of their ongoing research on the state of automobile industry in Pakistan and the future outlook. The Round Table Conference participants lauded PIDE’s efforts to not only research the industry, but to involve all relevant stakeholders and initiating a necessary dialogue for course correction. All participants wholeheartedly expressed their views on the issues and future way of action to Revitalizing Pakistan’s automobile industry. While many differing opinions were shared, all members agreed that without transfer of technology and skills, the automobile industry cannot grow. Academia-industry linkages must also be strengthened for any indigenous innovation in the automobile industry that we wish to see. Academia must also step forward to provide Research & Development Support to the industry, particularly by working on current areas of improvement but with a futuristic approach. The role of government is also essential for the flourishment of automobile industry in Pakistan. It must focus on developing facilitative policy environment and regulations, which at the moment are rather repressive.

There was a unanimous agreement that the transition to EV is bound to happen, globally as well as in Pakistan, and we must decide if Pakistan wishes keep the pace with the rest of the world or stay far behind. In case of the former, it is important to foster competition in the automobile industry to provide consumers a fair chance of choosing a quality vehicle of their choice, and also look towards integrating into the global value chain. Dr. Usman Qadir, Senior Research Economist at PIDE rounded off the conference with a vote of thanks to all the attendees for their participation and feedback on this pressing matter. He also expressed the desire to furthering such deliberations and collaboration with industry experts and other members of the academia as well.

Credit: Independent News Pakistan (INP)