Behind the Wheel: The Future of the Automotive Aftermarket in Pakistan

Pakistan's automobile industry has grown over the years, mainly triggered by factors like urbanization that increased with each passing year, rising disposable income, and in measures taken by the government to make the industry continue to boom. The country has a thriving sector of manufacturing automobiles consisting of cars, motorcycles, and commercial vehicles.

Automotive Aftermarket Industry in Pakistan:

Automotive aftermarkets are the market that emerges following the original sale of the vehicle. It is actually the replacement parts, accessories, services, and repairs.

Market Size and Growth

The current size of the automotive aftermarkets in Pakistan:

• The automotive aftermarket in Pakistan is one of the gigantic sectors contributing substantially to the country's economy. Precise figures as to its size are difficult to come by, although it is estimated to be worth billions of dollars. The growing number of vehicles on Pakistani roads combined with increasing demand for aftermarket products and services has boosted this sector.

Growth trends and projections:

PK Automotive's Aftermarket sector has been growing steadily over the past few years for a number of reasons:

• Rising car ownership: More and more people in Pakistan are able to afford to buy cars. It directly translates into increasing demand for aftermarket products and services.
• Growing Disposable Income: The rising middle class in Pakistan has more disposable income to spend on vehicle customization and maintenance.
• Change in consumer behaviour: Consumers today are demanding and want a solution for vehicle personalized, which, in turn, increases the need for an after-market product and services.

Factors influencing industry growth:

• Pakistan is more urbanized; thus, there is an increasing number of vehicles on roads, so this can be a more significant market for aftermarket products and services.
• Government incentives: Tax breaks, import duties, etc., offered by the government helped spur the growth of this industry and its ancillaries.
• E-commerce: E-commerce platforms have made purchasing aftermarket products accessible to all, and for a long time have been adding to the growth of this industry.

Key Segments of the Automotive Aftermarket

Some of the key segments of the automotive aftermarket in Pakistan include the following:

Replacement Parts

• Tires: Tires are some of the most important parts of a vehicle. Tires need to be constantly replaced. Demand for tyres in Pakistan is termed by the vehicle population on the roads and maintenance requirements.
• Batteries: The other vital component of a vehicle is its battery, which, normally, lasts much shorter than the vehicle itself. Demand for batteries is mainly based on how old the vehicle is or how long it has been in service, the usage pattern of the vehicle, and climatic conditions.
• Filters: Air filters, oil filters, and fuel filters are considered under this category to keep the performance and efficiency of a vehicle intact. Replacements of filters are highly required for the engine to run correctly and a better fuel economy.

Accessories

• Audio systems: In the past couple of years, there is an increased requirement for good quality audio systems by customers for a better driving experience.
• Car alarms: Car alarm mechanisms that prevent theft, such as security systems, are in demand among car owners.
• Interior styling: There is growing interest in seat covers, steering wheel covers, as well as mats on the floor of cars as forms of personalizing car interiors.

Service and Repairs

• Maintenance: Maintenance of a car continues to be a critical function for the long life and performance of a car. The Maintenance includes oil changes, brake inspections, and tune-ups.
• Accident repairs and cosmetic enhancements are some common services offered by automotive repair shops.
• Several consumers like to customize their automobiles according to their personal preferences. This ranges from exterior to interior and performance.

Challenges and Opportunities

The automotive aftermarket industry of Pakistan is accompanied by many challenges, but it also offers enormous opportunities for growth and development.

Challenges

• Use of counterfeit parts: This is one of the big challenges that Pakistan's automotive aftermarket industry faces. Counterfeit parts may be hazardous and damage a vehicle.
• Lack of standardization: The lack of standardization in this industry makes it difficult for consumers to compare products and services as well as for businesses to compete fairly.
• Grey market: The grey market, which is mainly focused on bringing and selling goods into the country without paying customs duties, will serve as a form of competition against the automotive aftermarket industry in Pakistan.

Opportunities

• Rising Demand for Customization: Consumers are becoming more demanding and are seeking bespoke solutions for their vehicles, thus making aftermarket products and services expected to grow.
• Increased adoption of electric vehicles: As the market develops more interest in these cars, certain maintenance and repair services will become crucial and thus present new opportunities for the auto aftermarket industry.
• E-commerce: Online platforms are expected to bring new opportunities for businesses to get in touch with customers as well as move their products and service offerings online.

Trends and Innovations

The Pakistan automotive aftermarket industry is not one of continuous change, where trends and innovations crop up frequently.

Rising Trends

• E-commerce: While it has been easy for consumers to access e-commerce platforms to buy aftermarket products ranging from tyres and the battery to accessories and customizations on their cars, this is becoming widespread.
• Subscription-based services: Subscription-based services such as the tyre subscription plan and vehicle maintenance packages are picking up. Subscription-based services provide more ease and savings in cost for the consumer.
• Connected cars: Growth in connected cars is unlocking after-market potential for the auto industry, since these vehicles will need specific updates in software, data services, and other accessories.

New Automotive Technologies

• Electrification: Electrification of vehicles will bring a new generation of after-market products and services, including charging stations, batteries, and electric motors.
• Autonomous Vehicles: Autonomous vehicles will increasingly alter the scene of the automotive aftermarket industry since these vehicles will operate with a great difference in practices of maintaining and repairing.
• Advanced Driver Assistance Systems: In the current era, advanced driver assistance systems like lane departure warnings, adaptive cruise control, automatic emergency braking, etc. are gradually fitted into various models of vehicles. Thus, a high demand for aftermarket upgrades and repairs is placed.

Government Policies and Regulations

There is, therefore, a great influence of government policies and regulations in the Pakistani automotive aftermarket.

Impact of government policies and regulations

• Import duties and taxes: The government levies import duties and taxes on automotive parts and accessories which will increase their prices and may make them scarce in the market.
• Safety standards: The government lays down safety standards for automotive products and services that may sometimes affect the demand for particular products and requirements on businesses within that industry.
• Environmental regulations: Government regulations on emission and control and pollution may impact the demand for specific Aftermarket products, including catalytic converters and emissions control systems.

Opportunities for government support and intervention

• Investment in infrastructure, including roads and highways, as well as provision of parking facilities shall develop the automotive aftermarket industry.
• Developing the working force skills and expertise of workers in the automotive aftermarket industry and improving the quality of services offered.
• Trade agreements could be signed by the government with other countries with the purpose of exporting more Pakistani products and services.

Pro-supportive policies and regulations by the government would have to be in place so that the industry could come into growth and proper development in Pakistan.