After a delay that reportedly cost the country billions since 2011 when the automobile policy started being formulated, its final version was approved on Friday, paving the way for new international car manufacturers to enter the local market. PML-N is looking to lure one of the big international players, Volkswagon, Audi or Fiat to set up plants here to add to the competition of the local industry.

An effective auto policy should do two things for a country; increase employment and industry by increasing the manufacturing sector for automobiles, and of course, allowing for increasing sales and increasing the quantity of cars bought by the public, which ideally should be cheaper and of better quality. It is important to remember that the former is the priority and should take precedence over the latter. The local plants of Japanese companies such as Toyota Honda and Suzuki do their part in employing a sizeable workforce, but a large part of the current demand for automobiles rests on the shoulders of the second-hand import dealership business, which is not labour-intensive. The government resisted changes to the import of used cars to Pakistan, which is strange, considering they occupy a large chunk of the medium-cost and luxury car market. Additionally, the government has offered new entrants duty-free import of their entire plant and machinery among other benefits, but will the companies setting up shop in Pakistan be able to compete with the refurbished car business?

At the end of the day, it is important to remember that more cars do not solve the problem of transportation across the country. Rural areas still have a very limited number of private cars present, and of course the average citizen cannot even afford any form of personal transport apart from a bicycle. Looking beyond city centres, one can see that Pakistan’s infrastructure is still not completely ready to take on a sudden influx of thousands of new cars that might be injected into the market if the pricing policy of the new entrants is competitive. And while the regime looks to invite new manufacturers, the interest displayed by the companies themselves can be termed lukewarm at best. While a lot of demands have been heard and catered to, important issues such as setting the definition for a medium-knocked down unit have been left out of the policy. With the policy in place, the time has arrived for the government to consider practical issues, and ensure that as promised, new competition not only enters the market, but gives a fight to the old established players.