Steering the Pakistani Wheel: A History of the Pakistan Automotive Landscape
By Murtaza Y. Mandviwalla
Man San Enterprises, Karachi
Murtuza Y. Mandviwalla — chairman and CEO of the Mandviwalla Motors Group — has spent over 40 years in Pakistan’s auto industry, which certainly makes him knowledgeable on the subject of cars and more.
His book, Steering the Pakistani Wheel: A History of the Pakistan Automotive Landscape, is a valuable effort in assembling historical facts about Pakistan’s automobile sector and stakeholders’ struggles in building a viable automotive landscape despite the country’s chaotic political environment.
The book gives an overview of the Pakistani auto sector’s development, from the American and European vehicles that were standard before Japanese dominance, to the current influx of Korean and Chinese brands.
With history, policy analysis and human stories, a book about Pakistan’s auto industry is both a research platform and fun for auto buffs
There is also plenty of valuable information on the roles of those individuals and families who dared to take the first steps in setting up the local auto industry and creating jobs in assembly plants, vending industries and sales/distribution networks. Much of this information is not available elsewhere, making this book an important historical resource.
The author sums up Pakistan’s auto tale in eight parts, covering its history, stakeholders, the automotive ecosystem, policies and regulations and the way forward.
A fascinating section is the ‘Timeline of Milestones’ that gives a year-by-year recap of the automotive story from 1896 to 2020.
According to this timeline, from 1896 to 1915, Sindh’s Record of Registration noted “1,322 movable properties … (including motor vehicles).” In 1932, The author’s grandfather, Ghulamali T. Mandviwalla, established a bicycle and tyre business. In 1946, Mercedes Benz was introduced to Pakistan and in 1949, General Motors of the United States set up an assembly plant in Karachi.
The 1950s to ’70s were a flurry of activity. Vespa, Chrysler, Ford, Dodge, Mazda, Toyota and Datsun arrived in Pakistan. Allwin (now Atlas) Engineering produced auto parts. Exide manufactured batteries. The famous Shershah Scrap and Motor Parts Market opened up. Lambretta and Honda motorcycles, as well as Bedford trucks, began to be locally assembled.
And then the industry was nationalised.
The ’80s ushered in Pak Suzuki, Daihatsu and the Pajero culture. The first Suzuki FX rolled out at Awami Autos Plant. By the ’90s and 2000s, many brands left the Pakistani market, while others — notably Korean makes such as Kia and Hyundai — came along. Indus Motors discontinued the Daihatsu Cuore after 11 years and Pak Suzuki retired the Mehran after 35 years of production.
The book will certainly help readers analyse how auto has been one of Pakistan’s most promising sectors, especially in contributing to government revenue, job creation, foreign investment and vendor development.
Mandviwalla explains that, in its formative days, Pakistan’s auto industry was import-based, followed by semi-knocked-down — or partially assembled — undertakings. Progress during the ’60s mainly relied on growth of the parts sector, foreign investment and aid. This was followed by nationalisation and gradual development of the vending industry.
The author takes us through 70 years of ups and downs, of policies that helped and others that forced many brands as well as dealers to pack up and leave the country altogether.
He explains how a deletion programme — where Pakistan gradually acquired manufacturing technology — was put in place and then later developed into a tariff-based system. The industry was re-privatised, but interference from political and other vested groups deterred consistent growth. The Auto Industry Development Programme (AIDP) gave directions, but wasn’t implemented in its fullest. Despite numerous obstacles, though, by 2012 the industry had reached its production zenith, crossing milestones in car, motorcycle and tractor manufacture.
The Automotive Development Policy 2016-2021 gave attractive opportunities to 12 Chinese and two Korean projects. The author writes that, in 2020, the government announced an Electric Vehicle (EV) policy and began preparations for a new auto policy.
Pakistan’s automotive landscape has been repeatedly manipulated by regulators and government leadership. Unfavourable policies and lack of financing opportunities forced many investors to shut down shop, and the author rightly points out that “the state has not provided the people with efficient alternatives of transportation such as mass transit, rail, river and air transport. There are no substantive plans that will alter the scenario.”
Government after government has built roads, but failed to recognise the importance of affordable means of transport as a key driver of economic growth and continued to heavily tax the entire landscape. The trickle effect has been a higher cost of road transport for the people.
The author believes the auto sector should not be made a scapegoat for meeting revenue shortfall in the annual budget. Tax processes should be reviewed because slapping ever more taxes at each stage of the value chain reflects in the vehicle’s end price, which is rapidly getting out of reach for most Pakistanis.
Mandviwalla also seems dissatisfied by what he feels is the outdated practice of selling vehicles through dealerships — that are, from a tax perspective, commission agents — and invoicing the sale through the manufacturer/distributor.
He suggests that sales transactions should be routed through a process where the dealer purchases the vehicle from the manufacturer, sells on its terms to the customer, and pays the value added sales tax on the transaction. This is practised the world over and this, Mandviwalla believes, is the way forward.
He also points out some other contentious issues, such as manufacturers shying away from transferring technology to component makers, transfer pricing in imports and various forms of wheeling-dealing in order to cut costs.
Mandviwalla says the general critique voiced in the media is of auto assemblers working on people’s monies by taking advance payments, passing on price increases to customers, charging extreme premiums and, finally, cartelising the industry.
While there is substance in some of these allegations, the author opines that automakers expect to receive returns on their investment. In the absence of any consistent policy and political stability, automakers view Pakistan as a high-risk country. High profit margins to mitigate risk is strategic.
It is also worth noting that — despite massive advancement the world over — our industry remains stagnant and local two- and four-wheeler assemblers continue to roll out decades’ old models.
Pak Suzuki, for instance, successfully kept the obsolete Mehran in production for 35 years. The Cultus and Alto went 16 and 12 years respectively without any overhauls, while the Bolan and Ravi remained unchanged for decades.
Indus Motors took years to revamp the Toyota Corolla and Atlas Honda — famed for updating the model every five or six years — took 12 years to bring out an all-new City.
As for bikes, the CD70 remains static from 2003 and the CG125 hasn’t been revised in 30 years. The price, however, gives buyers a shock — sometimes multiple times a year. Price hikes are conveniently blamed on the falling rupee and rising input costs, even though manufacture of the CD70 is 96 percent localised.
In the book’s preface, Mandviwalla states his aim is to provide “a platform for research into the various aspects of the automotive canvas and in bringing enjoyment to the auto buffs reading it.” He certainly achieves this aim. The analysis of the more technical aspects of the industry, from manufacturing to financing to the political environment, will certainly be useful to those interested in the workings of Pakistan’s automotive history.
“Auto buffs” will find it engaging, too, but there’s also plenty to capture the interest of casual readers. There are vintage photographs and advertisement notices offering deals that are sure to make today’s eyes pop — a 1927 ad lists the price of a Chevrolet Touring Car at Rs 2,800.
He speaks to people who were at the helm of the industry in its infancy and shares their memories with readers. He strolls down Shershah’s narrow lanes, where tiny, nameless shops sell stolen parts. He writes about rickshaws and taxis and the madness that passes off as city traffic.
The purchase of a car is a major household event, Mandviwalla notes. “Mithai [sweets] [are] distributed and Sadqa [charity] given.” That same car also represents a livelihood for multiple other households: of the factory worker who built it, the salesman who sold it and the mechanic who will fix it. Then there are the racers — of bikes as well as cars, women as well as men — and the collectors. The famed Bahawalpur collection makes an appearance, as does the Vintage Classic Cars Club.
Each of these people has a story to share, and the author includes them all, unified as they are for their enthusiasm for the automobile in all its various shapes and forms.
The reviewer is a member of staff
Published in Dawn, EOS, May 1st, 2022