The automobile industry has been one of the top-performing sectors in recent years, even when Pakistan’s economy was dwindling. However, since 2019, the car manufacturing industry has been witnessing a tumble in sales. And with COVID-19 hitting the country, the sector went as low as recording no sales of passenger vehicles in March 2020. Yet the analysts are optimistic that the industry will see a growth in sales in the future.

This is good news, as the growth of the auto sector reflects the progress of the whole economy. Another reason for analysts’ hope is the overall improvement in macroeconomic indicators and low-interest rates. Nevertheless, the vehicles manufacturers must realise how quickly the inflation of their product has made vehicle ownership an uphill task. It is evident from the fact that even as basic a vehicle as the Alto 600 cc is now out of reach from a person who does not make it to the bracket of high-income earners.

It is quite surprising that Pakistan is the sixth populous country in the world, yet its middle class has shrunk in recent years. The high prices and the increasing class divide must ring alarms bells for the sector. Price rationalisation is perhaps the only way out if the manufacturers want to rejuvenate the industry. Claiming that import of parts drives up the price is not a valid excuse at all. With major automobile players that have been in the market for over three decades, it is surprising that these carmakers have still not managed to achieve localisation, which is their responsibility in the first place.

Big companies that have held a significant market share for so long must cater to the Pakistani market specifically. Admittedly, the government could provide a stimulus to the car industry. However, that should be in the form of incentivising new entrants in the market. The tried and tested ones clearly have no interest other than bringing inferior, watered-down products to the Pakistani market. Welcoming newcomers through incentives in the manufacturing market will make the sector more competitive and ensure market equilibrium.