Challenges Automobile Industry has been facing

Research Project Report

Submitted By
Muhammad Kashif Raheem (52412)
Saqib Anwar (53182)
Maaz Bin Ishtiaq (58928)
Mustafa Hussain (45111)

Submitted to: Abdul Samad Sheikh

Supervisor for the Project

IQRA University, Main Campus Karachi

Table of Contents

1. Introduction .............................................................................................................................. 3
1.1 Background ............................................................................................................................ 3
1.2 Research Problem .................................................................................................................. 3
1.3 Objectives ................................................................................................................................ 3
1. 4 Research Question ................................................................................................................ 4
1.5 Justification ............................................................................................................................ 5
1.6 Scope of Study ........................................................................................................................ 5
1. 7 Limitations of the Study ....................................................................................................... 5
1.8 Definitions of Key Terms ....................................................................................................... 6
3. Research Methodology ............................................................................................................ 6
3.1 Research Design ....................................................................................................................... 6
3.2 Research Population .............................................................................................................. 7
3.3 Sampling Strategy and Size .................................................................................................. 7
3.4 Data Collection Procedure .....................................................................................................7
 Primary Data .................................................................................................................... 7
 Secondary Data ................................................................................................................ 7
3.5 Research Instrument Selection ............................................................................................. 7
3.6 Variables ................................................................................................................................. 8
3.7 Hypothesis ............................................................................................................................... 8
3.8 Plan of Analysis ...................................................................................................................... 8
3.9 Software Employed ................................................................................................................ 8
References .................................................................................................................................… 9
 1. INTRODUCTION:
1.1 Background:
The automobile industry in Pakistan has come a long way since its inception in the 1950s, with
the establishment of the first automobile assembly plant in Karachi. Over the years, the industry
has expanded significantly, with the addition of new players and the introduction of new models
and technologies. The industry is one of the largest manufacturing sectors in Pakistan,
contributing significantly to the country's economy. According to the Pakistan Automotive
Manufacturers Association (PAMA), the industry contributes around 2.8% to the country's GDP
and provides employment to around 3.5 million people directly and indirectly. The automobile
industry in Pakistan includes the production and assembly of cars, trucks, buses, motorcycles,
and other vehicles. The major players in the industry include Pak Suzuki Motors, Toyota Indus
Motors, and Honda Atlas Cars, which together dominate the market. The industry has also seen
the entry of new players, including Renault and Hyundai, which have started production and
assembly in the country in recent years.

1.2 Research Problem:

This research problem is significant as the automobile industry in Pakistan is a vital sector for the
country's economy, contributing significantly to the GDP and providing employment
opportunities. However, the industry has faced various challenges, including high taxes and
tariffs, lack of infrastructure, political instability, low purchasing power, and competition from
imported cars, which have hindered its growth and development. Therefore, it is essential to
identify the specific challenges faced by the industry and explore potential solutions that can help
the industry overcome these challenges and achieve sustainable growth. The research can focus
on various aspects, including government policies, infrastructure development, investment in
technology and skilled labor, and market trends, among others. The research problem can be
addressed through empirical studies, data analysis, and case studies of successful automobile
industries in other countries. The findings of such research can provide insights into the specific
challenges faced by the automobile industry in Pakistan and offer potential solutions to
overcome these challenges and achieve sustainable growth.

1.3 Research Objectives:

 1. To identify the major challenges faced by the automobile industry in Pakistan, including
high taxes and tariffs, lack of infrastructure, political instability, low purchasing power,
and competition from imported cars.
2. To analyze the impact of these challenges on the growth and development of the
automobile industry in Pakistan.
3. To explore the government policies and regulations that affect the automobile industry in
Pakistan and their impact on the industry's growth.

4. To identify potential solutions to the challenges faced by the automobile industry in

Pakistan, including investment in infrastructure, technology, and skilled labor, and
market-oriented policies.
5. To assess the role of stakeholders, including government, industry players, consumers,
and other relevant parties, in overcoming the challenges faced by the automobile industry
in Pakistan.
6. To examine successful case studies of automobile industries in other countries facing
similar challenges and identify best practices that can be adapted in the Pakistani context.
7. To propose recommendations for policymakers and industry players that can help the
automobile industry in Pakistan overcome the challenges it faces and achieve sustainable
growth.

1.4 Research Question:

1. What are the major challenges faced by the automobile industry in Pakistan?
2. How do these challenges affect the growth and development of the automobile industry
in Pakistan?
3. What are the government policies and regulations that affect the automobile industry in
Pakistan, and how do they impact the industry's growth?
4. What potential solutions can help the automobile industry in Pakistan overcome the
challenges it faces, including investment in infrastructure, technology, and skilled labor,
and market-oriented policies?
5. What is the role of stakeholders, including government, industry players, consumers, and
other relevant parties, in overcoming the challenges faced by the automobile industry in
Pakistan?
6. What are the successful case studies of automobile industries in other countries facing
similar challenges, and what are the best practices that can be adapted in the Pakistani
context?
 7. What recommendations can be proposed for policymakers and industry players to help
the automobile industry in Pakistan overcome the challenges it faces and achieve
sustainable growth?

1.5 Justification:
The challenges faced by the automobile industry in Pakistan are significant and require urgent
attention. Addressing these challenges can help the industry achieve sustainable growth,
contribute to the country's economic development, and improve the overall well-being of the
population.
1.6 Scope of Study:
The study would be conducted using a mix of qualitative and quantitative research methods,
including literature reviews, surveys, interviews, and data analysis of industry statistics and
reports. The study would focus on the challenges faced by the automobile industry in Pakistan
and would not cover other aspects of the industry, such as market trends, consumer behavior, and
technological advancements. The study would provide insights into the challenges faced by the
automobile industry in Pakistan and offer potential solutions to overcome these challenges and
achieve sustainable growth.

1.7 Limitations of the Study:

1. Data availability: There may be limitations in the availability of reliable and up-to-date
data on the automobile industry in Pakistan, which could affect the accuracy and validity
of the study's findings.
2. Sample size: The sample size of the study may be limited, depending on the research
methods employed, which could affect the representativeness of the study's findings.
3. Bias: There may be biases in the data collection and analysis, as well as in the
interpretation of the study's findings, which could affect the credibility and validity of the
study.
4. Time constraints: The study may be limited by time constraints, which could affect the
depth and breadth of the analysis and potentially result in a less comprehensive
examination of the challenges faced by the automobile industry in Pakistan.
5. External factors: External factors such as changes in government policies, economic
conditions, and other social and political factors, could affect the study's findings and
limit the generalizability of its conclusions.
6. Language barriers: Language barriers could also pose limitations to the study as relevant
literature and data in the local language may not be easily accessible.
1.8 Definitions of Key Terms:
1. Automobile Industry: The automobile industry refers to the manufacturing, marketing,
and sale of motor vehicles, including cars, trucks, buses, and other commercial vehicles.
2. Challenges: Challenges refer to obstacles, problems, or difficulties that the automobile
industry in Pakistan is facing and needs to overcome to achieve sustainable growth.
3. Competition: Competition refers to the rivalry and contest between automobile
manufacturers, dealers, and other industry players to attract and retain customers and gain
market share.
4. Government Policies: Government policies refer to regulations, laws, and guidelines that
the government of Pakistan puts in place to regulate the automobile industry, including
trade policies, taxation, and environmental regulations.
5. Infrastructure: Infrastructure refers to the physical and organizational structures needed
for the automobile industry to function effectively, including roads, public transport,
energy supply, and other logistical support.
6. Purchasing Power: Purchasing power refers to the ability of consumers to buy goods and
services, including automobiles, based on their income levels and cost of living.
7. Skilled labor: Skilled labor refers to workers with specialized skills and training needed
for the automobile industry to manufacture, maintain, and repair motor vehicles.
8. Sustainability: Sustainability refers to the ability of the automobile industry in Pakistan to
achieve long-term growth and development while preserving natural resources,
minimizing waste, and reducing its carbon footprint.

3. Research Methodology
Research methodology is the specific procedures or techniques used to identify, select, process,
and analyze information about a topic. The researcher can select either a quantitative or
qualitative research approach, and each approach has different options for data collection and
analysis. This section explains the options the researcher chooses to conduct the research.

3.1 Research Design:

This study takes an exploratory approach to understanding the drivers and barriers to CE
implementation at the micro-level in Pakistan's automobile industry. To collect data, the research
design incorporates both qualitative and quantitative methods. With quantitative method we
choose to adopt the secondary information. Taking interviews and sharing questionnaire which
people will select and answer the problems which they have been facing. The research area is the
automotive industry of Pakistan. With all automotive industries companies listed on the Pakistan
Stock Exchange. Also we can consider businessmen and investors to fill out such form.

3.2 Research Population:

This Data will consist of all the automobile companies listed in PSX and Federal board of
revenue. We can share online forms throughout Pakistan which can be shared with other sector
as well for their feedback. The more data we get, the better we will be able to figure out the
problems.

3.3 Sample Strategy & Sample Size:

3.4 Data Collection Procedure

 Primary Data
The Primary data will be collected through Questionnaire by Survey from different automobile
companies. The Primary research conducted to analyze the challenge face by the automobile
industry. Based on collected data through Questionnaire data analysis will be performed and
researcher reflect opinion and analysis over Challenges face by Automobile and how we can
over come it. Question will consist of how automobile is facing such challenges and how we can
overcome it, How government rules and regulations are effecting the industry etc.

 Secondary Data
We also need other researcher opinion and data in order to make research effective.  The financial
data is collected from the annual audited report from the financial year related to companies in the
automobile industry. This will help us to better prepare the questionnaires or surveys which we may
consider to get data.
3.5 Research Instrument Selection:
For this study, we will use a survey as the research instrument. A survey is an effective way to
collect information from a huge wide variety of respondents in a short length. We will distribute
the survey questionnaire to people working within the Auto Industry who've Knowledge and
expertise about the challenges the industry has been dealing with.

3.6 Variables:
Dependent Variable: Challenges faced by the automobile industry.
Independent Variable: Various factors that affect the automobile Industry such as, government
regulations, economic conditions, technological advancement, competition, and consumer
preferences.

3.7 Hypothesis:
H1: Challenges faced by the automobile industry are primarily due to government regulations
and economic conditions.
H2: Challenges faced by the automobile industry are mainly due to technology advancements
and competition.
H3: Consumer preference have a significant impact on the challenges faced by the automobile
industry.

3.8 Plan of Analysis:

We will use descriptive statistics to analyze the information accumulated thru the survey. We
will use frequency distribution tables, mean, and standard deviation to investigate the statistics.
We may even use inferential statistics, which includes regression analysis, to check the
hypotheses.

3.9 Software employed:

We will use SPSS (Statistical Package for Social Sciences) Software to analyze the data.
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