KARACHI, June 17: Assemblers of cars and motorcycles have expressed their resentment on the government’s decision to reduce the import duty on automobiles from 25 to 50 per cent in the budget, which they say “will give a serious setback to the progressive manufacturers of vehicles in the country.”

An emergency meeting of the Pakistan Automotive Manufacturers Association (PAMA), representing 10 Pakistani assemblers, was held on Monday to consider the implications of the budgetary measures on the local automobile industry.

Finance Minister Shaukat Aziz in his budget speech on Saturday announced a duty cut on import of automobiles of various engine capacities, ranging from 25 to 50 per cent, to persuade local assemblers in bringing down prices of their products.

The PAMA members were of the view that the cut in duty would discourage the foreign investors, who were negotiating joint ventures with the local parties for the manufacture of parts, which needed higher technology and large investment. Localization has exceeded 50 per cent in cars and 85 per cent in motorcycles.

PAMA chairman Kunwar Idris said the duty structure did not hit the assemblers of vehicles but the parts makers. There are more than 500 parts makers, who employ more than 100,000 people and constitute the backbone of the engineering industry, he added.

In a statement, he also deplored the reference of the finance minister in the budget speech to the quality and price of the cars and bikes produced locally. The PAMA chief maintained that in both respect they conform to the international standards.

The price competitiveness has been verified by the Engineering Development Board (EDB) of the government, he added.

He urged the government to let the existing rates of the customs duty and other taxes on the locally manufactured and built up vehicles continue for at least three more years to enable the industry to grow.