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Cars with different capacity are being produced in Pakistan ranging from cc to cc. These include cars with manual or automatic transmission running either on diesel or petrol. The production of cars jumped more than fourfold from 2000-01 to 2005-06 due to buoyant conditions in the economy as shown in Table 2.4. Production then plummeted by 29 percent by 2009-10 due to a slowdown in growth of incomes. In 2010-11, there has been a modest recovery in production of 10 percent. A similar pattern is observed in the case of Jeeps, Pickups and LCVs. It is surprising that the biggest share in production is accounted for by large cars with capacity of 1300 – cc. This is in contrast to India, for example, where the share of small cars exceeds 50 percent. This
is probably a reflection of, first, inequality in household incomes and, second, higher profitability in large cars due to greater effective protection.
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