Phase 5: 2000 to 2011 The first decade of the new millennium saw the automobile industry in Pakistan growing rapidly and making a sizeable contribution to the country’s manufacturing sector, though it has along way to go before it can establish itself in the international market. However, in 2008-09 it experienced a major downturn, with sales dropping by 47 percent. This sudden fall in demand can be attributed to the ongoing economic recession, which saw high interest rates along with a sharp depreciation of the exchange rate. All this led to an increase in the prices of cars and the cost of components. During 2009-10, the recovery in sales helped to increase the production from 99,307 units into units. Yet the growth was far below the highest level achieved by the industry in 2006-07 1 of 204,212 units. Despite this, the overall growth in the automobile industry is impressive and potential for further growth is considerable.
