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Auto industry

Auto industry

According to newspaper reports, at least 500 Chinese automakers have shown interest in setting up their manufacturing plants in Pakistan. The companies interested in the local auto industry include the manufacturers and assemblers of heavy-duty trucks, engines, auto parts and tyres. In a discussion with representatives of the Islamabad Chamber of Commerce and Industry, a delegation of Chinese businessmen expressed the desire to establish joint ventures with their Pakistani counterparts and the two sides will be able to produce vehicles as per the European Union standards. No doubt vast opportunities of business cooperation exist between the two countries. There is only need to explore the new avenues of business cooperation. Initially, they need local partners for the supply of automobiles and auto parts and will set up manufacturing plants and bonded warehouses through joint ventures and investments if demand increases.

The mutual cooperation will not only enhance the investment in Pakistan, but it will also pave the way for transfer of technology into the country. There is no dearth of investors in Pakistan who also want to establish joint ventures with foreign entrepreneurs, but there are several hurdles in the way of the two. The first hurdle is official rigmarole and red tape which is the legacy of the colonial era. Corruption is rampant in Pakistan and it is not simple to get a manufacturing license let alone to acquire land, establish a building and get utility services. The pen which approves anything needs money to move. Pakistan is a growing consumer market and purchasing power of the people is increasing. As it happens in any other part of the world, people want to buy their own vehicle as priority.

However, it is hope a business understand already exists between Pakistan and China not only on official level, but also business-to-business level. It is the best opportunity for the local investors to establish joint venture with Chinese investors. It will not only save their investment, but will also provide them tax concessions. The demand for vehicles is increasing day by day and due to geographical location of Pakistan, it can become a hub of auto industry in the world. It is the time that the government policymakers and private investors sit together and jointly make a feasible auto policy. It will be the first step toward industrial revolution in the country.