VIBRANT AUTO SECTOR OPENING NEW EMPLOYMENT AVENUES

According to an estimate, 174,000 workers are currently employed in the entire industry

From KHALID BUTT, Lahore
Nov 14 - 20, 2005

The vibrant auto sector is contributing significantly in fighting against the severe issue of unemployment by creating new openings both for the skilled and unskilled manpower in the country.

Showing an increase of 25 per cent in employment, the automobile industry is expected to keep on opening new job avenues of direct employment in the five car-manufacturing companies, which are operating in Pakistan.

The employment in these auto-manufacturing units has reached to 6,480 in the current year from 5,162 in 2004 following their enhanced production capacity and expansion plans.

All the major car manufacturers are planning to expand their production by next five years. The implementation of these plans would open up significant investment avenues in the country. Apart from other economic benefits, there would be a sharp rise in the direct employment in this sector.

According to an estimate, if the job figures of entire vending industry including cars, motorcycles, tractors, were taken, 174,000 workers were currently employed in the entire industry. Auto industry was likely to lead in future in terms of opening up new job avenues.

Car makers have already doubled their production by bringing investment of Rs17 billion till this fiscal as compared to Rs 6 billion in bike industry, Rs3.5 billion in tractor industry and Rs72 billion in the entire vending industry, making a cumulative figure of Rs98 billion.

Senior executives in the car companies talking to PAGE said the employment was expected to double in next five years, from 6,480 in current year to 13,270. They said the rapid growth in the industry is paying the benefits to every stakeholder in the economy. The trends clearly indicate that the continuous growth will provide direct employment to a big number of people. Further, it would indirectly give rise to employment to an even bigger number of people in allied vendor industry.

If the economic boom persists in future followed by the current demand, the figures of employment in the entire auto industry would touch 290,000 in 2010 while the entire investment would peak to Rs233 billion, the executives said.

For instance, Honda Atlas has projected to invest Rs1.85 billion by 2005-2006 after investing Rs430 million in 2004-2005. Employment figure in the company is expected to rise to 1,230 from 1,062 in 2004-2005. Production would rise to 28,000 units in 2005-2006 from 20,000 in 2004-2005.

Indus Motor Company has invested over Rs700 million on capacity expansion in the last two-and-a-half years and is making another investment of Rs800 million in the current year on plant expansion. In 2003, a total of 900 employees were working in the IMC as compared to 1,400 in 2004 and the company intends to employ more with the increase in capacity and production of units.

Dewan Farooqui Motors limited has already initiated its plans to invest Rs200 million in 2005 and further plans to invest Rs500 million in production facilities in 2006. Currently the company has been employing over 1,000 persons in the head office and the plant.

The industry provides employment to engineers, technicians, skilled workers, mechanics, chartered accountants, marketing and sales professionals, management executives and a host of professionals from different fields. In addition to this, the industry has the most geographical spread of the jobs as the manufacturers, vendors, transporters, and especially the dealers, workshops and service providers are located in most urban and rural areas. From engineering perspective, the auto industry provides employment to professionals from all the fields of engineering, i.e. mechanical, metallurgical, electrical, industrial, electronics, chemicals, materials, civil, architecture and design, etc.

Senior executives said that at the time when joblessness looms large and the unemployment rate is touching the red, auto industry had come forward to eliminate the employment problem to a large extent in next ten to fifteen years.

A major change has come in the motorcycle manufacturing industry, thanks to the entry of Chinese bike makers who have provided both competition and cheaper bikes in the market as compared to three Japanese bike makers.

Currently the number of bike makers in Pakistan stands at 24 including three Japanese bike makers, while 10 more Chinese bike assemblers are in the process of getting a go-ahead from the government.

A Chinese bike assembler said that the entry of cheaper bike makers has opened new doors for the people to invest in vending industry. Currently, bike vendors stand at 500 as compared to 40 three years back. Around 10,000 new jobs have been opened with the entry of Chinese bikes in the vending industry in the last three years.

UNEMPLOYMENT
(Million)

 

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Unemployed Labour Force

1.88

2.29

2.32

2.37

3.17

3.24

3.57

6.65

3.52

3.6

Rural

1.16

1.47

1.37

1.39

1.98

2.02

2.22

2.27

2.09

2.14

Urban

0.72

0.82

0.95

0.98

1.19

1.22

1.35

1.38

1.43

1.46

Unemployment Rate (%)

5.37

6.12

5.89

5.89

7.82

7.82

8.27

8.27

7.69

7.69

Rural

4.8

5.65

4.98

4.98

6.94

6.94

7.55

7.55

6.74

6.74

Urban

6.9

7.17

7.95

7.95

9.92

9.92

9.8

9.8

9.7

9.7