ISLAMABAD
\nThe Pakistan Institute of Development Economics (PIDE), under its RASTA Competitive Grants Programme, organized a seminar on \u201cAutomotive Value Chains in Pakistan\u201d featuring Dr. Muhammad Shafaat Nawaz, RASTA Fellow and Fulbright Scholar, moderated by Dr. Usman Qadir, Senior Research Economist and Director (CITDE), PIDE.
\nDr. Nawaz presented findings from his doctoral research on OEM-mediated Global Production Networks (GPNs) in Pakistan\u2019s automotive industry \u2014 a study funded jointly by the Fulbright Program (U.S. Department of State), PIDE\u2019s RASTA CGP Round 4, and the American Association of Geographers.
\nHis research redefines how Pakistan integrates into global value chains and introduces the concept of OEM-mediated GPNs, where Original Equipment Manufacturers (OEMs) act as intermediaries between global lead firms and local suppliers, shaping industrial outcomes, technological upgrading, and regional development.
\nDrawing on 72 interviews, a survey of 319 local firms, and advanced network analysis, Dr. Nawaz revealed that three Japanese firms \u2014 the \u201cBig Three\u201d \u2014 dominate 99% of Pakistan\u2019s passenger car market and 89% of light commercial vehicles, creating a highly oligopolistic structure. The tractor segment is equally concentrated, with two firms controlling 99% of production, while Atlas Honda retains about 67% of the motorcycle market.
\nThese OEMs, operating as subsidiaries, partners, or licensed producers, have enabled Pakistan\u2019s entry into global value chains but have also restricted innovation, exports, and research autonomy. Unlike other developing economies that attract high-value global suppliers such as Bosch or Denso, Pakistan\u2019s auto sector lacks indigenous R&D and technology transfer linkages.
\nDr. Nawaz classified local firms into three main categories: captive vendors, bound by low-value repetitive contracts; emerging suppliers, who gain autonomy through international certifications like IATF 16949 and participation in global trade exhibitions; and aftermarket producers, who perform low-technology subcontracting for local markets.
\nHis analysis demonstrated that a one-unit increase in OEM business share leads to a 0.09-unit rise in annual business growth, statistically significant at the 0.001 level. However, this growth largely benefits firms that successfully diversify and upgrade, while others remain locked in dependency cycles. \u2014 DNA<\/p>\n","protected":false},"excerpt":{"rendered":"
ISLAMABAD The Pakistan Institute of Development Economics (PIDE), under its RASTA Competitive Grants Programme, organized a seminar on \u201cAutomotive Value Chains in Pakistan\u201d featuring Dr. Muhammad Shafaat Nawaz, RASTA Fellow and Fulbright Scholar, moderated by Dr. Usman Qadir, Senior Research Economist and Director (CITDE), PIDE. Dr. Nawaz presented findings from his doctoral research on OEM-mediated […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":{"0":"post-512791","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-national"},"yoast_head":"\n