Auto industry targets 5,00,000 cars per annum by 2015
Import of used cars a major concern for local industry

Interview: Parvez Ghias, Managing Director Indus Motors

Mar 19 - 25, 2007

The automobile industry is taking a new shape in Pakistan in the backdrop of stellar growth it has achieved during recent years. The industry is gaining momentum towards the much cherished goal of the economy of scale with ambitious expansion plans by all major stakeholders to cumulatively produce 500,000 units per annum. To have an update on the auto industry, Pakistan & Gulf Economist conducted an exclusive interview with Parvez Ghias, the Managing Director Indus Motor Company to share his views with our readers.

PAGE: The capacity expansion by all leading automobile manufacturers gives an impression that the industry is on its way towards economy of the scale. Recently Suzuki has also announced an ambitious expansion plan to attain the level of producing 270,000 units in next three years. Similarly, IMC has its own expansion program. Would you like to give an idea about the total production of all makes after three to four years in Pakistan?

PARVEZ: The entire OEM auto industry, including IMC, has responded to market growth with plant capacity expansions over last 2-3 years. Nearly all of them are planning for future growth. The GOP vision expects the industry to be in 500,000 p.a. range by 2015. IMC's current capacity is 50,000 vehicles p.a. and we are in dialogue with Toyota Motor Corporation to firm up plans for a new 100,000 p.a. plant expansion and model line up by 2012. The company is also studying various options to achieve another 15,000 p.a. production from the existing facility.

PAGE: Would you like to give an outline of total investment in this sector going forward?

PARVEZ: The GOP auto vision talks of investment in the sector going up from current Rs 86 billion to Rs 225 billion by 2015.

PAGE: Don't you think that enhanced production would lead to cutthroat competition in the local market, consequently affecting the profit margins? Do you feel that prices should come down as a result of increased production?

PARVEZ: We are anticipating increased competition in the market, which will certainly create pressure on the profit margins. However, speaking from customer viewpoint, there will be greater choice in brands and variants and improved quality.

Actually, nearly one third of the car cost comprises duties and taxes. We do not see reduction in prices taking place unless there is a significant reduction in government levies.

PAGE: The vendor industry in Pakistan is expected to assume a leading role in auto sector on the back of capacity expansion. How the increased production would help vendors enter the export market and what is the current status of vendors in respect of exports?

PARVEZ: The vendor industry plays a crucial role in the success of auto business. Currently, their export volume is relatively low, however, their outlook would brighten if they could capitalize on economies of scale and quality. Entry of a few in the global supply chain of OEMs will cause the vendor industry to reach a new level of threshold.







Growth (%)

Pak Suzuki




Indus Motor




Honda Atlas Cars




Dewan Motors




PAGE: IMC is known for its quality products especially in higher cc segment while its small version Cuore was also increasing its market share by leaps and bounds. Has IMC planned to introduce more economy class versions like Cuore in future?

PARVEZ: IMC has already doubled its production of Cuore to nearly 13,000 units for the current year. Going into the future, we believe the highest potential for growth lies in the economy and small high segment. Currently, we have no plans to introduce any new economy versions, however, the situation will be different when we achieve our plant expansion in future.

PAGE: What is the market share of IMC at present and what it aims for and what are your future plans for investment?

PARVEZ: Today we are holding 22% of the market share. This will have to grow significantly if we are to realize our vision and become the number one auto company by 2015 in Pakistan. In terms of investment, this year we have installed a new bumper booth and work is underway on a co-generation power project and a sheet metal press facility. Later in the year we will be launching the new Hilux commercial vehicle, which has enjoyed huge success overseas.

PAGE: The industry has expressed concern over government's decision to allow import of cars, completely built units (CBU) as well as used cars. What are your comments on the arrival of used cars with a variety of models in the country? What is the future of these used cars as some people have remarked that Pakistan is bound to become a junkyard of secondhand cars in a couple of years owing to non-availability of parts of these used cars?

PARVEZ: The import of used cars is an area of major concern and something that can devastate the growth plans like it has happened in other countries resulting in plant closures. We appreciate the GOP efforts in recognizing this aspect and factoring it in the new auto policy. Long-term benefits to Pakistan are huge if the auto industry flourishes. These flow through high employment because the industry is labor intensive; there is technology transfer at OEMs, vendors and dealers; the industry is fully documented; the products have low maintenance cost and enjoy warranty cover and there is significant contribution to GOP revenue and economic growth.

PAGE: Would the capacity expansion help in our deletion program and what is the current deletion level in Pakistan?

PARVEZ: Old deletion program is a history when OEMs achieved different deletion levels for their products. In the new Tariff Based System there is a tacit understanding from OEMs that there will be no roll back. Equally, there is an expectation from vendors that they will improve their manufacturing and quality processes and delivers parts at competitive prices.



Pak Suzuki Motor Co. Ltd.


Indus Motor Co. Ltd.

34,000 *

Honda Atlas Cars (Pakistan) Ltd.


Dewan Farooque Motors Ltd.


Ghandhara Nissan Ltd.


LCV & 4X4

Pak Suzuki Motor Co. Ltd.

12,000 (LCV 11,000, 4x4 1,000)

Indus Motor Co. Ltd.


Dewam Farooque Motors Ltd.


Sigma Motors (Pvt.) Ltd. Manufactured at Ghandhara Nissan Plant.

4x4 Land Rover 


Dewan Farooque Motors Ltd. 

Not declared 


Hinopak Motors Ltd.


Ghandhara Industries Ltd. 


Sind Engineering Ltd.


VPL Limited 

 500 ****

Master Motor Corporation Ltd.



Hinopak Motors Ltd.


Sind Engineering Ltd.


Ghandhara Industries Ltd.

1,800 ***

Ghandhara Nissan Ltd.



Al-Ghazi Tractors Ltd.


Millat Tractors Ltd.



Atlas Honda Ltd.


Dawood Yamaha Ltd.


Suzuki Motorcycles Pakistan Ltd.


Saigols Qingqi Motors Ltd.


Pakistan Cycle Industrial Cooperative

42,000 **

 Society Ltd. (Sohrab)


Planned: 50,000 by September 2005. ** Planned: 60,000 by December 2005. *** No bus body manufacturing facility.  Bus chassis included under Truck. **** Plant closed.

SOURCES: Pakistan Automotive Manufacturers Association