Pakistan's biggest car producer - the Pak Suzuki Motor Company, an affiliate of Suzuki Motor Corporation, Japan - has put its weight behind opening up trade between Pakistan and India in the automobile sector, stressing that the domestic industry will flourish if Islamabad allows import of car parts from Delhi.
Managing Director of Pak Suzuki Motor Company, Hirofumi Nagao, said that not just Pak Suzuki, but the entire auto industry of Pakistan will benefit if the country opens up trade with India, reports The Express Tribune.
Nagao is very optimistic that the new government, led by Nawaz Sharif, will take swift steps to increase the growth of the auto industry.
Nagao said Indian auto part makers are not only willing to trade with Pakistan, but are also ready to transfer the latest technology to their counterparts here. This will be a win-win situation for both auto parts makers and carmakers in Pakistan, he said.
Pak Suzuki wants to import Suzuki Alto engines, from India because their cost of import will be much less than what it costs to import them from Japan. Indian auto components, especially engines, are of international quality and are compliant with global emission standards like Euro III and Euro IV, he said.
Pak Suzuki discontinued production of the Suzuki Alto from July 1, 2012 after the government made compliance with Euro II emission standards compulsory for all car producers in the country. The company says the discontinuation of the Alto has badly affected businesses of its regular vendors, who have reported a decline of over 50 percent in annual sales.
The cost of production in Pakistan is higher if compared to India primarily because of the smaller market size. With a vast market and big economies of scale, India has an edge over Pakistan. Therefore, Pakistan's auto industry needs to increase its volumes and achieve economies of scale to reduce car prices, Nagao said.