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Automobile & Automotive Parts Industry in Pakistan is an emerging market for automobiles and automotive parts offering immense business and investment opportunities. Auto industry's present contribution to GDP stands at 2.8% which is expected to reach 5.6%. The GDP is expected to grow from $145 billion to $210 billion by the year 2012.

Pakistan is amongst a few countries of the world which manufacture all kinds of vehicles i.e. 2/3 wheelers, motorcars, LCVs, tractors, prime-movers & trucks and buses. The total country requirements are generally met from the local production except the import of certain categories of trucks & prime-movers.

As of 2010, Pakistan is one of the largest users of CNG (compressed natural gas) in the world. Presently, more than 3,000 CNG stations are operating in the country in 99 cities and towns, and 1000 more would be set up in the next two years. It has provided employment to over 50,000 people in Pakistan.

Pakistan auto industry produced 1 million vehicles with a gross value of around US$ 3.6 billion during the year 2005-06. Pakistan is now world's 7th largest market of 2-wheelers however, in value terms the car production occupies over 50% of total market. The production of vehicles expressed compounded growth rate of 50% for the period 2001-02 to 2005-06.

Installed Capacities and Production of Vehicles					Units in No's
Products	Installed Capacity	Products
Products	Installed Capacity	2001-02	2002-03	2003-04	2004-05	2005-06	2006-07
Motorcycles
Cars	1,700,000	120, 627	175,169	371, 007	570, 706	751, 667	839,224
LCV's	275,000	40,088	62,073	98,46	126,403	160,642	160,49
Buses	40,000	9,055	12,548	14,896	25,177	32,053	38,49
Trucks	5,000	1,086	1,296	1,380	1,762	825	1,053
Tractors	65,00	23,801	26,24	35,770	43,200	48,88	54,098
Total	2,113,500	195,791	279,22	523,536	770,452	998,59	1,097,77
Source: PAMA

The government of Pakistan's strong commitment on investment in the infrastructure projects particularly the roads and highways, ports and shipping and Pakistan's unique geographical location, is expected to push the auto industry growth in the cars, LCVs and HCV sectors.

The growth of auto component industry is directly linked to the growth in assembly sector. As Pakistan auto industry is expected to reach a critical mass of production of cars and LCVs within next 4 to 5 years, the components production will become more competitive, technologically advanced taking its due share in the global supply chain.

Thus, Pakistan Auto Industry has the potential to become a global choice for outsourcing, off shoring and become part of the global supply chain.