The automobile industry has achieved a remarkable
growth during the fiscal year 2003-04 due to friendly economic policies
and of course cheap and easy finances available in the market.
As is evident by the key economic indicators for
2003-04, suggesting investments and fixed investment of 18.1% and 16.4%
respectively of the total GDP in the automobile sector, with Credit to
private sector Rs.224.56 billion in 2003-04 compared to Rs.106.63
billion in 2002-03. The same fiscal period of 2003-04 witnessed an
increment in the KSE index to 61%. Also, foreign investment showed an
upward trend, and rose from US$ 750 million during FY 2002-03 to US$1000
during FY 2003-04.
With the key targets of three-years, 2004-07,
investment is targeted to reach 20% with a rise of 1.9% to add towards
the GDP in order to boost the growth rate to 8% by FY 2006-07.
As during FY 2002-03, the GDP growth was standing at
5.1% when the growth rate of manufacturing and large-scale manufacturing
was 6.0% and 7.2% respectively. Similarly, when the manufacturing and
large-scale manufacturing reached to 13.4% and 17.1%, the GDP growth
rate increased to 6.4%.
With improved Per Capita Income that increased from
US$ 492 to US$ 652 during FY 2002-04 , and substantially improved
remittances, financial institutions have equally benefited considerably,
through offering Auto Financing that rose from Rs.15,800 million during
FY 2002-03 to Rs.24,500 million during FY 2003-04, with interest rates
that declined from 10.5% to as low as 7% during FY 2002-04.
What is needed is protection and creation of an
investment-friendly environment, through ensured long-term policy. This
will result in restoration of local investors' confidence, which, in
turn, will allow the local auto industry to thrive by attracting more
domestic and foreign investments for itself and for different segments
of Pakistan's economy.