Pakistan Initiates Car Exports to Africa, Unveils Plan to Expand Sales to Kenya

Master Changan Motors, a Pakistani-Chinese collaborative automaker, has embarked on the journey of exporting its Oshan X7 mid-size crossover vehicles to the African market, specifically Kenya. Shipping containers filled with Oshan X7 cars have been sighted in Karachi, en route to the port, marking the inception of this export venture. Although the company has not yet officially announced its export strategy, insiders have confirmed the impending export of numerous Oshan X7 SUVs to Kenya. An official announcement is expected during a ceremony scheduled at Master Changan Motors' Karachi plant on October 12.

Changan Pakistan's CEO, Danial Malik, previously indicated the company's intent to export right-hand drive vehicles, originally designed for the domestic Pakistani market, to various regions. Historically, the parent company primarily manufactured left-hand drive vehicles for its domestic Chinese market. Under this export plan, Pakistan-assembled vehicles will find their way to distributors in countries like South Africa, Malaysia, Indonesia, and other regions where right-hand drive vehicles are the norm.

This development comes at a crucial time when Pakistan is grappling with economic challenges, including soaring inflation and elevated business operation costs. Record-high interest rates have also contributed to reduced demand for cars. Furthermore, escalating car prices in Pakistan have placed additional financial burdens on consumers.

In light of these economic challenges, the government has been encouraging the local auto sector, which heavily relies on imported materials, to boost exports. The initial goal was to attain 2% of total imports, although this target remained unmet in FY23. In May 2022, Pakistan achieved its first successful vehicle export through Master Changan Motors under the new Auto Industry Development and Export Policy (AIDEP 2021-26). Pakistan stands out as the only country, apart from China, to produce the latest model of Changan Oshan X7.

In related news, the Pakistan Automotive Manufacturers Association (PAMA) disclosed on October 11 that car sales in Pakistan witnessed a 10% upswing in September compared to the preceding month, with a total of 8,312 units sold. This short-term boost is primarily attributed to enhanced access to raw materials.

However, year-on-year statistics reveal a notable 26% decline in sales for the same period, reflecting the challenges faced by the domestic automobile industry.