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Auto Parts and Accessories

Overview The auto parts industry of Pakistan has come of age during the last 5 years owing to aggressively pursuing capacity expansion and technology upgradation on the back of major investments made by OEMs to meet rising vehicles demand. This coupled with opportunities created by export development inititives of the government provided auto parts industry the springboard to becoming part of global sourcing chain. Industry Structure The industry produces a diversified range of products including precision components for the OEMs, replacement as well as export market. About 90% of the companies are SME’s mostly in the tier 2 and 3 category with major clusters in and around Lahore and Karachi.  With 253 companies currently registered with PAPAAM plus many micro and small enterprises spread throughout the length and breadth of the country, the auto parts sub-sector provides a strong vendors base capable of manufacturing a wide range of parts and components.  Technological Development Majority of companies in the sub-sector are SMEs developing their approach and looking for professional support to reintegrate and redesign their work flow processes and improve quality through modern technologies, testing equipment and adoption of best manufacturing practices. Technology levels remain low to medium primarily due to high cost of technology acquisition. Automotive parts industry has seen a considerable growth during the last 5 years but achieving high volumes and entering into export markets remains a challenge. Another major challenge is development of critical parts involving high technology level. To further improve the quality of components which have already been developed and to go for high value added components and assemblies which have been planned by the industry for local development would need high technologies. Such components and assemblies include alternator, starter motor, water pump, fuel pump, fuel filter, seat reclining, power steering, engines, transmissions for car and LCVs and regulator rectifiers, ignition coils, piston, fuel cock, clutch assembly, sprocket cam, drum gear shift, magneto and oil pump etc for 2 /3 wheelers. Exports The sub-sector is exporting a diverse range of products to many countries including USA, Germany, Italy, UK, UAE, Bangladesh, France, Hungary, Spain and Turkey indicating capability of the industry in meeting quality standards and sophistication required by these markets. However, Pakistan’s imports of automotive components far outweigh its exports. Pakistan imports of major auto parts were US$ 727 million and US$307 million during 2007 and 2008 respectively. Export figures show a gradual increase during the last four years that may be attributed to increased international exposure of companies and projection of Pakistan as an emerging subcontracting destination during international trade fairs.   Export Products The Sector is exporting Cast & Machined Parts, Forged & Machined Parts, Transmission Components (Gears & Shafts and Wheel Hubs, Sheet Metal Parts, Rubber and Plastic Parts, Rubber mountings, Safety Seat Belts and Radiators