Automotive Parts Industry

Economic Review, April 2001 | Go to article overview

Automotive Parts Industry


INTRODUCTION

There has been a rapid pace of increase in the number of all types of automotive vehicles in Pakistan and it is estimated that average growth in the number of vehicles on the road during the past 10 years, has been to the extent of 9% per annum. Thus, the different type of vehicles on the road in the country, were in the region of 1,949,500 out of which motor cars and jeeps accounted for the largest number or 680,600 numbers motor cabs and taxis numbered 70,600 while buses and trucks accounted for 79,900 and 133,800 respectively.

However, despite the steady growth in the number of automotive vehicles, the development of auto parts industry has failed to show an active pace although the market for both original equipment spare parts from assembly plants and for replacement purposes has recorded a vigorous expansion. Barring negligible exceptions the country depends heavily on the imports of a wide range of automotive parts. The imports are made through legal channels as well as through smuggling. In view of this, official statistics about imports of automotive parts do not represent a true picture of the demand for auto parts. Official statistics of auto parts imports are as under:

Besides, rings, coms, shock absorbers, brake shoes, some of well known industrial units in both private and public sectors have started manufacturing a good number of auto spare parts such as pistons, radiator cores, gaskets and some miscellaneous items.

Pakistan Association of Automotive Parts and Accessories Manufactures (PAAPAM), was formed in 1988 to represent the auto parts manufacturers at various government departments and to provide technical and management cooperation of the members.

The Association comprises of 185 members with capital investment of over Rs. 10 billion. The industry is manufacturing 1000 auto parts such as pistons, engine valves, gaskets, camshafts, shock-absorbers, structs, steering mechanism, cyclinder head, wheel hubs, brake drums, wheels, instruments and instrument panel, gears of all types, radiators, cylinder liners, blinkers, lights, door locks and auto air conditioners for local assemblers.

According to association, during the past three years Suzuki Mehran achieved 58 percent localization, Suzuki Khyber 44 per cent, Suzuki Margalla 35 per cent, Suzuki Pick-up 52 per cent, Suzuki Potohar 35 per cent, Suzuki Van 47 per cent Toyota Corolla 28 per cent, Honda Civic 28 per cent, Tractor Massy Ferguson 84 per cent, Tractor Fiat 84 per cent and KIA Ceres 26 per cent.

Radiator Core

Radiator core is an important component in motor cars, light and heavy vehicles. There has been a rapid increase in the number of motor vehicles on the road during the past 10 years, and consequently, the demand for automobile spare parts including radiator cores, has also been rising steadily. It is estimated that on an average, about 8 per cent of total number of cars and taxis require replacement of Radiator Core every year, and on this basis, the replacement demand for cores from cars and taxis worked out to 60,096 in 1998 while the projected demand for 2003 in the light of the above assumption would come to around 87,986 cores.

The replacement of radiator cores is generally required in at least 15% of light commercial vehicles of the road on account of normal wear and tear and accidents. The core replacement in light vehicles on the road annually. The heavy vehicles was thus estimated at 45,120 numbers. The rate of replacement in light vehicles has been estimated at 25% of total vehicles including trucks, buses and tractors. On the basis of above assumption, the demand in respect of heavy vehicles worked out to 188,125. In light of the above calculations, the total replacement demand for radiator cores is given in table-II:

Thus it will be seen that against a demand of 293,341 radiators, production facilities exist for 157,000 radiators.

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