The automotive industry seeks growth through diversification

KARACHI:

Amid the challenges facing the auto industry, several local companies have launched diversification strategies to mitigate losses and tap into new revenue streams.

With the onset of the Covid-19 pandemic and subsequent import bans, numerous companies in the automotive sector, also known as the engineering industry, have turned to producing a diverse range of products to serve both national interests and their own profitability.

Speaking to The Express Tribune, Auto Sector Expert and Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), former chairman and director of Mehran Commercial Enterprises, Mashood Khan said, “They can leverage their resources — existing technologies to to reduce the inflation of import prices and develop local products benefiting the local people and the country. We should continue the process of diversification and form an SME cluster to manufacture a range of products and try to make brands from our country that cater to both the local and international markets.”

He said that the automobile industry, which is actually an arm of the engineering industry, has been operating for more than 35 years and can use its machinery and expertise to help various industries such as textiles, pharmaceuticals, leather, chemical and the chemical industry and others manufacturing small machinery (or components) currently being imported. He warned, however, that the industry may continue to face challenges in 2024 as it faced disruptions in the previous year.

One such company that has successfully diversified is the Alson Group, with over 70 years of precision engineering and manufacturing experience in the country’s automotive, aerospace, defense, energy, oil and gas, lighting and medical products industries. .

“Diversification is imperative as the automotive industry continues to experience fluctuations. While our core business revolves around auto parts, we are expanding our product range to mitigate losses and cater to innovative products in high demand,” said Akbar Allana, Director, Alson Group.

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He said the group now manufactures defense items, a full line of lighting products, auto parts, various assemblies, CPAP (continuous positive airway pressure) components, medical devices, state-of-the-art electromechanical ventilator, including a series of ventilation, automatic locking, precision, friendly user interface, waveform display, LCD touch screen, trolley and humidifier selection.

He explained that originally established as a watch manufacturer in 1953, the company ventured into producing timing devices and artillery fuses after being approached by the Pakistan Army in 1965. By the late 1960s and early 1970s, it had fully diversified. of its product range.

Since then, the group has become a key supplier of defense products to Pakistan Ordnance Factories (POF) and has expanded its reach globally, exporting to countries such as Germany, France, Switzerland, Spain, Belgium and others. Its exports are estimated at around $6 to $7 billion annually.

Similarly, Sherani Engineering, a company with three decades of experience, has diversified into manufacturing welding mechanisms, armored vehicle components, molds and engine components, among other products.

Director Saad Sherani of Sherani Engineering highlighted the central role his company plays in meeting the demands of both the local and international markets with a variety of products. Additionally, he described the company’s expansion into original equipment manufacturer (OEM) parts manufacturing, thereby strengthening its portfolio. Sherani Engineering also specializes in the production of moulds, molds and components for both internal and external customers, further strengthening its position as a versatile industry leader.

Published in The Express Tribune, February 10^u2024.

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