KARACHI: Pakistan spends a handsome amount on bringing in auto parts from abroad for the aftermaket every year.

However, the imports of completely and semi-knocked down (CKD) kits for the local assembly of cars surged to an all-time high of over $1 billion in FY21.

In contrast, the country`s auto parts exports have remained negligible in the last decade. As per data of the Pakistan Bureau of Statistics (PBS), exports of auto parts and accessories have been on the downward trajectory after achieving the highest $28 million in 2011-12 and since then it has been struggling between $13-24m every year.

CKD/SKD import bill in FY21 hit $1.120bn from $478m in FY20, up by 134.35pc owing to almost 100pc increase in arrivals under a government concessionary package in Auto Policy 2016-2021. To some extent, existing players are also importing CKD/SKD kits for new models being rolled out with low volume of locally made parts.

However, car assemblers claim to have achieved higher localisation.

Car sales had swelled by 57pc in FY21 over FY20 followed by 104pc hike in July over July 2020. With huge advance booking orders in the hands of new entrants and old auto players, import of CKD/SKD kits is likely to remain high in the first half of FY22.

Mehran Commercial Enterprises Director Mashood Ali Khan told Dawn that the country has the potential to take the auto parts exports to $300m from $15-20m in the next five years. Unfortunately, only 25-35 auto parts makers are exporting and we need to add more companies.

`The total size of aftermarket in the world is around $500bn while the global auto parts market is of over $2 trillion (original equipment manufacturers) and Pakistan standsnowhere,` he said.

Auto parts exports had risen to $20m in FY21 from $15m in FY20, but it cannot be termed an achievement as it should have witnessed a big jump during the last 10 years, he said.

The auto parts manufacturers based in Pakistan are not part of any global supply chain and they are not exporting to any international manufacturers that have huge volumes. The majority are exporting to distributors or aftermarket suppliers, he said.

Currently, we are making the majority of parts for the Messey Ferguson and Fiat tractors which are made in Pakistan. The world has many other brands which we are supplying to but these markets are niche markets, he said.

Since we have exported agricultural tractors and motorcycles only, small pockets of aftermarket parts exist with low volume and value, whereas there is no export of cars, buses/trucl(s (with the exception of buses exported to Afghanistan) due to lack of business vision from the assemblers. Each assembler should export at least one car model in the next five years, Mashood hoped.

Pakistan auto parts manufacturing industry is prone to a limited product mix and having overall technological and engineering processes alike, except for a few manufacturers of auto parts. This is also hindering the expansion in product mix and export to the world market, he said.

The auto parts manufacturers need to enter into joint ventures with foreign investors to produce parts to supply in the world market and this can be done with the government`s help, he said.

Patron in chief of Pakistan Automobile Spare Parts Importers and Dealers Association Arshad Islam said that Pakistan has `annual replacement parts market` of Rs100bn in which the share of legal imports is Rs21bn while Rs70-80bnis undocumented market.

He said overall auto parts usually arrive from China, Korea, Japan, Thailand, Europe, Germany etc while China holds a big share in replacement parts.