Pakistan’s automobile industry faced significant challenges throughout 2023, marked by a sharp decline in car sales and production. Sales plummeted by up to 55%, while factory-manufacturing car components production experienced a drastic 70% reduction.
The industry’s struggle was largely attributed to the exchange rate crisis, which severely hampered car production and led to a decline in income until the previous year. This downturn in car sales adversely affected the national treasury, resulting in a noticeable decrease in revenue from automotive products. Industry analysts warn that if car production or assembling continues at the current rate, the subsequent two years could see even more dire conditions for the auto sector in Pakistan.
Despite past agreements with international automobile companies, Pakistan has struggled to acquire technology transfer and manufacturing capabilities, contributing to the high cost of cars in the country.
The current government is actively tackling this issue, engaging in crucial negotiations to address these challenges. Notably, in response to a decrease in the value of the US dollar against the Pakistani rupee, automobile companies reduced the prices of their units towards the end of 2023. This price adjustment temporarily boosted car sales, but it was not enough to reverse the overall downward trend in the industry significantly.
