The economic woes experienced by Pakistan have put enormous pressure on almost all sectors and auto industry is also affected by the economic downturn.
The auto sector has reported a significant fall in production and sales and it looks quite doubtful if it would get out of the current troubles.
The buyers have also suffered due to the difficulties faced by the sector by paying higher prices for vehicles that now stand at an all-time high. In this context, it is reported that the auto industry has recorded a steep decline in sales and barring the bus segment every other sub-sector is in trouble. The most affected are car sales which have seen a massive drop of 40 per cent.
In this context, it is pointed out that throughout the last year the unfair practices prevalent in the auto market have negatively impacted it.
The conditions of the auto market have been exacerbated by import restrictions, high increases in car prices due to exchange rate fluctuations and prohibitively high automobile financing rates.
The main issue arising of this situation is the inability of vehicle assemblers to localise production to a level that they would not need to gouge customers to offset frequent fluctuations in the dollar-rupee exchange rate.
Though encouraging new automakers from China, Malaysia and South Korea is a step in the right direction but even the vehicles produced by them remain unaffordable to a wide margin of the citizenry.
In respect of leasing, the market is also depressed because the all-time high-interest rates with no signs of them coming down in the near future. Moreover, the official curbs on auto financing and non-opening of letters of credit have resulted in parts shortages that led to production halts by various assemblers with late delivery in Japanese models also depressing the demand for automobiles.
The real problem is that once the prices of vehicles go up then there is hardly any chance of them coming down and getting out of the reach of many segments of the population.
