Overall development is the way out for automobiles: Chinese scholar--China Economic Net

Cheng Xizhong, special commentator of China Economic Net, visiting professor at Southwest University of Political Science and Law, senior fellow of the Charhar Institute, former Defense Attache in South Asian countries, former UN Senior Military Observer. 【Photo/China Economic Net】

BEIJING, Mar. 2 (China Economic Net) - According to the statistics recently released by Pakistan Automobile Manufacturers Association, the sales of Pakistan automobiles in January came down from 19353 to 10095, which is almost 48% less from the same period last year. Similarly, from July 2019 to January 2020, the total automobile sales in Pakistan decreased by 44% compare to the same period the previous year.

In my opinion, reasons for the decline of car sales in Pakistan is because of the increased interest rates, the increase in tariffs, the devaluation of the currency and overall economic depression.
There is an issue of economic chain, that is, the industrial chain issue. The industrial chain is a kind of industrial cluster with certain internal relations, which is composed of mutually based series and interdependent industries involved in serving a specific demand, producing specific products and providing services. From the industrial chain of modern industry, a complete industrial chain includes a number of links, such as raw material processing, intermediate product production, finished product assembly and sales and service, etc.

Therefore, the sluggish automobile market in Pakistan will impact the development and employment of all links in the relevant industrial chain. It is estimated that Pakistan's automobile industry chain is currently providing about 900,000 jobs. If the automobile market continues to deteriorate in the days to come, the employment of the industry chain will suffer a very big shock.

Then how to stabilize the automobile sales? I think the key solution is the development of Pakistan's overall economy. Only the rapid growth of economy and domestic disposable income, the acceleration of urbanization process, and the increase of infrastructure investment in transportation facilities can drive the strong development of automobile industry and can create the substantial increase of automobile sales.

As far as I know, manufacturing industry is the pillar of Pakistan's economy. The contribution rate of manufacturing industry to Pakistan's GDP in the financial year 2017-2018 was 13.6%. According to the output of the products of the scale manufacturing industry, the growth value of the seven scale manufacturing industries, including textile, food, coke and petroleum products, steel, automobile, fertilizer and medicine, accounts for about 55%. Among them, the textile industry is the most important manufacturing industry in Pakistan, with a complete industrial chain. The textile industry contributes nearly one fourth of the industrial value-added, providing 40% jobs for the industrial labor force, accounting for 60% of the country's foreign exports. In fiscal year 2017-2018, Pakistan's textile exports increased by 13.53 billion US dollars which is around 8.67% higher than the previous year.

Cheng Xizhong, special commentator of China Economic Net, visiting professor at Southwest University of Political Science and Law, senior fellow of the Charhar Institute, former Defense Attache in South Asian countries, former UN Senior Military Observer