ABSTRACT

Although Pakistan’s automotive sector contributes significantly to the country’s economy, it is still modest by worldwide standards and has a long way to mature and expand. The industry is well-protected, and imports are restricted by non-tariff obstacles in the calculation to high duty rates. The industry’s protection result in a significant growth in employment, making the industry monopolistic and severely reducing consumer surplus. The major goal of this research is to assess the competitiveness of Pakistan’s vehicle sector, to discover non-tariff measures in automotive sector, and to assess if protection measures are effective. Another goal is to look into the barriers to boosting the industry’s competitiveness and propose incentives for companies to produce high-tech products and move the industry toward more value addition. A penal data analysis is used to measure the effects of different variables on exportation of automotive sector of Pakistan. Data from 2003 to 2021 of four major trading partners of Pakistan have been used for this analysis. The results of quantitative and qualitative analysis revealed that protectionism is not only factor to protect and enhance any sector. There are some other factors including GDP, R&D expenditure, import tariffs which play a significant role to boost the exportation.