Pakistan auto industry rides a high

Pakistan's auto industry is enjoying a boom. All leading brands such as Suzuki, Toyota and Honda have reported high profits.
The biggest car producer - Suzuki - shot down the industry's production record growth of 31 per cent by upping its own output by 54 per cent in 2015. Suzuki maintained its leadership among the country's Big 3.
The sale of cars manufactured and assembled in Pakistan climbed to 179,953 units in 2015 from 136,888 units in 2014, the Ministry of Industries said.
What is pushing this car buying and production spree? The yen stays weak against the greenback, helping car assemblers to buy imported spare parts for cheap prices. Imported spares account for around 75 per cent of the equipment which goes into assembling cars. Commercial banks' interest rates are now the lowest in 42 years, making car financing cheapest in  decade.
New car models are attracting buyers as Pakistanis enjoy a higher purchasing power. "The latest growth in the automobile sector confirms a rising per capita income in Pakistan, improved economics of the auto sector and overall recovery of the economy," said Tahir Saeed, a financial market researcher.
There is big scope of more investment inflows to expand production capacity as competition among car manufacturers increases.
Auto is perhaps the only industry which is doing well at a time when others - ranging from textiles to farm products - are hit hard by stagnating exports. Reduced foreign demand, difficulties related to the international oil price crash and energy shortages are key factors hitting other industries.
"The auto industry must now focus on enlarging output of its cars and export more units to countries in its neighbourhood. It should also tap new markets in Central Asia," Minister for Commerce Khurrm Dastgir said.
Suzuki has unveiled its operational  and financial results for 2015. The company is jointly owned by Pakistan Automobile Corporation (Paco) and Suzuki Motor Corporation of Japan (SMC). SMC owns 73 per cent of the joint venture.
Paco said: "In January to September 2015, Suzuki tripled its  pre-tax profit to Rs6.33 billion as compared to Rs2.18 billion in the like period of the previous year."
Toyota cars assembled by Indus Motors is moving up the ladder fast. Its report said: "Toyota sold 57,000 car in 2015 - a record in the company's history. We have exceeded production capacity which is usually 54,800 units a year."
Views expressed by the author are his own and do not reflect the newspaper's policy.