Regional Competitveness Studies: Research Study on the Auto Sector

The Auto Industry of Pakistan is at a crossroads and policy makers now have two options for catalyzing change in the status quo. They could take the direction of increasing consumer choice by opening imports of cars, thereby letting the domestic auto industry atrophy. Alternatively, they could take the direction of increasing commitment to an auto sector in Pakistan by offering a full complement of supporting policies to the existing border protection, and committing to a plan of gradually reducing this tariff protection over time.

The existing system of implementing just the tariff protection part of the AIDP package has proven to be counter-productive, generating rents and discouraging investment and competition at the cost of consumers. Consequently, the status quo of a highly concentrated industry, low market size, low exports and limited consumer choice has prevailed in the automobile market. Even after decades of tariff protection, the Pakistani car industry cannot sustain itself without protection.

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Authors

Dr. Faisal Bari IDEAS

Nadia Mukhtar

Dr. Syed Turab Hussain

Nazish Afraz

Umbreen Fatima

Usman Khan

Keywords

• Auto Sector
• Imports
• Public Policy

Cite this publication

Bari, F., Mukhtar, N., Hussain, S. T., Afraz, N., Khan, U., & Fatima, A. (2016, Aug). Regional Competitiveness Studies: Research Study on the Auto Sector. Institute of Development and Economic Alternatives (IDEAS).

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