7.3. DEGREE OF COMPETITIVENESS The key indicator of competitiveness internationally is the level of exports. For the industry as a whole the total exports of parts stood at $10 million in 2009-10. Within the sample of 34 vendors only 2 were actually exporters. Clearly, the possibility of exports exists primarily in the case of formal vendors, who are making high quality supplies to OEMs using sophisticated technology. But the limited size of the domestic market and generally low market shares of most units have limited the possibilities of realisation of economies of scale. Looking forward, as the industry expands, efforts must be made to expand relatively labour-intensive light parts, in which Pakistan could acquire comparative advantage. Also, it is essential that OEMs face more competitive pressure so that in turn vendors are motivated to achieve higher levels of cost efficiency.
