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Synopsis

Definition and scale of sector

The sector covers:

Why the sector is strong in the West Midlands

Light Engineering Sector

Traditionally the engineering sector in Pakistan is divided into:

The Heavy Engineering sector in Pakistan is engaged in producing cement and sugar plants, industrial boilers, construction equipment and transmission towers etc. This sector is mainly dominated by companies in the public sector. The Light Engineering industry encompasses a wide range of product categories ranging from surgical instruments to bicycles. For our analysis, the following sectors have been chosen, on the criterion of having the highest potential for foreign investment:

Contrary to India, Turkey or other countries in the region,Pakistan has a car vendor industry only capable of manufacturing simple component parts. Pakistan has neither gear box nor engine producing facilities. In view of the huge recent increase in the local car market and the projected performance, consideration for such production should present opportunities for the local market as well as for exports. However, three significant drawbacks might arise from the fact that:

  1. Major car assemblers in Pakistan are Japanese, which may favour Japanese backed technology in their sourcing of auto parts;
  2. The industry benefits from high tariff protection and local contents rules which might disappear soon due to WTO regulation;
  3. The relatively low volume of production for the local market so far.

Automotive Sector

Pakistan is a growing market for automotive and auto accessories (including buses and tractors), offering exceptionally good sales opportunities for UK exporters in the auto spares segments. The total number of vehicles in Pakistan is over 4.9 million units. Annual demand is estimated at 300,000 units, which is being met from local assembly of CKD units and imports. Total imports in this sector are valued at US$300 million. The local production of after market vehicle parts and accessories is estimated at US$850 million.

Transport Sector (Road/Rail/Air)

Investment in transport is a costly business, especially for poor countries, because the means of transport cannot be acquired with small investment; roads and railways are indivisible units that cannot be built unless there is a certain minimum size of investment. The state has to decide whether the national 'market' for transport is large enough to justify certain facilities in the same way that private entrepreneurs have to decide whether the market for their products is large enough to justify investment.

Government is making serious efforts to develop an efficient Transport & Communications network to meet the growing need of the country. Private sector is also being encouraged to complement the efforts of the government in accelerating the development of Transport & Communications network with a view to improving the accessibility and delivery of the services. The transport system in Pakistan broadly consists of roads network, railways, air transport, ports and shipping services.

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