Ali Hammad Jafri

Since there has been an increase in e-commerce and online shopping, more and more light commercial vehicles (LCVs) are being purchased by the companies to carry goods from warehouses to the consumers.

Recently, the LCV sector has experienced a huge demand in the medical, logistics and agriculture industry. One can witness these LCVs regularly moving around us in shape of ambulances, courier service, cargo vans, and livestock transporters, among others. The digitalisation of life has provided the automobile companies with a new business model having increased demand for the LCVs.

It is also evident that the automobile manufacturers intend to take full advantage of the China-Pakistan Economic Corridor (CPEC) project which is considered to be a game changer in the region.  As soon as the infrastructure is built, a surge of logistical, trade and commercial activities may increase sales and demand of light commercial vehicles on routes of CPEC.

According to Economic Survey 2017-2018, auto sector will continue to expand due to entry of new players in the market. Some of the prominent LCV manufacturers who have already shown intentions of spending big in Pakistan are Pak Suzuki Motor Company Ltd, Daehan Dewan Motor Company Pvt. Ltd, Al Haj Faw Motors, Master Motors Corp. Ltd, Afzal Motors, Indus Motor Company, Ghandhara Nissan, KIA Lucky Motors, Foton JW Auto Park, Joylong Pakistan and Hyundai Nishat Motor.

Besides a host of price competitive Chinese players expressing interest, some major global players have also shown intentions of tapping into the Pakistan automobile sector once CPEC gains momentum.

Since the government has included financing for the LCVs in the Automotive Development Policy (ADP-2016-21), a number of banks have started offering financing facilities both for large, medium and small sized vehicles.

However, a recent announcement from the government in federal budget for 2018-19 barred non-filers of tax from purchasing new vehicles.

The ADP-2016-21 has generated tremendous interest in Pakistan’s automobile market and is expected to promote a healthy competition in the sector, which will lead to an increased choice for the customers.

The competition in the light commercial truck segment has already begun.

Options available for the consumers in the market are Daehan Shehzore, Foton M-280, Isuzu NKR, JAC 1020, and Gandhara Nissan’s JAC X200.  Whereas, LCV variants from Hyundai Nishat and Kia Lucky Motors are yet to be introduced in the market.

The demand for the LCVs has created a competition among the automobile companies and the government’s role in supporting these firms is commendable.

Experts believed that the current year will be great for the industry because not only local manufacturers are set to launch new LCVs in the market, but several foreign automobile players are collaborating with Pakistani partners to heavily invest in automobile sector. Therefore, with the support of the Ministry of Industries and Production, the local volume of automobiles will jump significantly in the future.

The healthy competition will create awareness among LCV customers providing them with availability of more options in the market in terms of quality, safety features and fuel efficiency.

However, the competition will depend on how fast the new entrants in the industry localize with strong dealer network, effective marketing and outreach and availability of spare parts and after sales service for customers.