Pakistan

Last modification: 29 Aug 17

Chapter 1: Economic and business environment

Demographics	188.924.870
Capital	Islamabad
Major cities	Lahore, Faisalabad, Rawalpindi
Languages	Urdu (ur-PK), English (en-PK), Panjabi (pa), Sindhi (sd), Pushto (ps), Brahui (brh)
GDP	1,428.99 USD (2015)
Unemployment rate	6.7% (2016)
Main industries	GDP Composition by Sector: Agriculture (21.8 percent) Industry (23.6 percent) Services (54.6 percent) Industrial Production Growth Rate: 4.9 percent Industries: Textiles and apparel, food processing, pharmaceuticals, construction materials, paper products, fertilizer, shrimp
Currency	PKR Pakistani rupee
Interest rate	7,27%
Inflation	5,02% (2017

Chapter 2 : Automotive market, segments & sales

Total Car park	2.557.858 vehicles
Dealer network (including fleet dealer network)	Very limited dealer network, but remarkably professional and helpful. Most of the car business is related to Japan import
Used car market/renewal cycle	Due to the shortage of cars in PK, the second hand market is big and vehicles are used, sold & bought as long as possible

Chapter 4: Taxation & legislation

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Chapter 5: Car policies

Company Car Entitlement:
Surprisingly many employees in PK have some sort of a company car. Ofter the car is offered in order to guarantee a safe home-office commute.

Which sectors provide most fleet cars?
Most of the intermational corporates will offer company cars in PK

Which job functions often include a company car?
Traditionally Sales & Account management, but also in house functions might receive a company car

Reference cars:

Entry level / junior sales level	Small and cheap vehicles, depending on the availability on the market.type FAW, Suzuki Mehran/Alto, …
Senior sales / Management level	Honda City & Civic, Toyota Vitz
Executive level	Toyota Fortuner

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Chapter 6: Funding methods

Overview of penetration of funding methods (buy or lease statement)	Purchase is by far the cheapest way of financing in PK. The only cheaper option would be cash allowance
Type of suppliers (captive versus multibrand, international versus local…)	Operating lease : international suppliers (Hertz, Orix) Other financing types : local players
6.1 Outright purchase:
Definition	Vehicle is registered as a fixed tangible asset on the balance sheet at the acquisistion value and depreciated over total useful economic life
Pro’s and con’s
Economic & legal ownership	Full ownership, included Risks asd Rewards
Business practices
6.2 Renting (Finance lease) :
Definition	Is available in PK via banks or the limited number of leasing companies. Finance lease needs to be acceptable for the Islamic modes of Finance. Finance lease will typically include insurance and tracking device
Pro’s and con’s	Not flexible. Fixed duration of 3 to 5 years
Economic & legal ownership	The lessor / bank owns the car. Depending on the type of finance lease, the lessee can purchase the car at the end of the life cycle
Business practices	Any type of leasing is still rather unusual in PK
6.3 Full service leasing (operational leasing)
Definition	Full Service Lease exists in Pakistan, but is expensive and not popular. There are only a very limited number of suppliers available.
Pro’s and con’s	The leasing fee is deductible from corporate income tax, but still expensive in comparison with outright purchase
Economic & legal ownership	The leasing company owns the vehicle
Business practices
6.4 Fleet Management
Definition
Pro’s and con’s
Economic & legal ownership
Business practices
6.5 Short term rental
Definition
Pro’s and con’s
Economic & legal ownership
Business practices
6.6 Other funding methods