Pakistan’s automobile sector is attracting investments from different international companies like Hyundai, Kia, and others. Chinese and Japanese companies are also setting up their assembly units in the country and FAW is one of them. The Chinese automobile company is now all set to bring its first locally assembled car FAW V2 on road, having passed its first test already.
FAW has been previously importing cars in Pakistan, but now it is assembling its cars locally to tap the lucrative market. The automobile company is working with Al-Haj group in Pakistan to assemble its cars with both the companies already working since 2011 to manufacture trucks in the country. Its plant is also capable of manufacturing passenger cars and light commercial vehicle.
Pakistani market is currently dominated by Japanese cars where companies and individuals have been importing cars from Japan as they are fuel efficient. Chinese companies will have to come up with vehicles that can match Japanese vehicles at a low price in order to get hold of the vehicle market in Pakistan.
There is a wild perception that Chinese products are not durable and a lot of people may not be willing to go for Chinese cars. But if companies like FAW introduce quality vehicles at lower price as compared to the Japanese vehicles, they have a strong chance of capturing the market share of the industry.
Korean companies like Hyundai and Kia will also start selling their vehicles by 2019-2020 and Chinese companies will have an advantage of 2 or 3 years over Korean counterparts to tap the local market. FAW currently sells 1,200 units in Pakistan and it plans to increase its production to 3,600 by 2017 and further increase it to 6,000 units in by 2019.
The used car market is also an option that Chinese companies can tap as Pakistan imports more than 45,000 used cars annually. Used motorcycles of China also managed to compete with the Japanese counterparts once they hit the market in early 2000s and, according to Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) Chairman Mashood Ali Khan, Chinese cars can repeat the story again.