KARACHI, May 21: The government may not pressurise the car makers to cut prices as they are multinationals and the country cannot afford to give any negative signal to foreign investors, specially Japanese ones, who have been very supportive all along.

This was the crux of the explanation offered by the Federal Minister for Industries and Production, Liaquat Ali Khan Jatoi in response to various queries made by members of the business community at the Federation House.

“I have again asked the car assemblers to reduce prices but I cannot pressurise them as they are MNCs and not a government organization like Pakistan Steel or Pakistan Machine Tool Factory (PMTF), where I can dictate change in management if they fail to oblige or ignore government’s advice,” the minister said.

He said that if the government pressurises the MNCs, it could become an international issue which may hamper future investment in Pakistan.

It may be noted here that Jatoi has been requesting the assemblers to cut prices for the last four months and on April 30 at a press conference in Karachi, he claimed that auto assemblers had agreed to cut prices on June 1 without indicating any specific percentage.

He was of the view that Pakistan enjoys good relations with Japan, besides getting assistance and financial help and it was difficult for it to annoy Japanese investors on issue of car prices. He said he had urged the assemblers to share their higher profits with the consumers by slashing the prices.

When some newsmen asked the minister whether the assemblers would cut price on June 1 as he claimed on April 30, Jatoi said, there is no need to jump to conclusion as June 1 is far away. He said that consumers had seen cut in motorcycle prices and they would also see price cut in cars.

The president, Karachi Chamber of Commerce and Industry (KCCI), Mian Nasser Hyatt Magoo said that the assemblers are not justifying the increase in car production as consumers are still facing delay in delivery of new cars.

The minister did not agree with the KCCI president, saying that Toyota Corolla production has reached to 1,500 car per month from March as compared to 870 units per month.

Vice-President of KCCI and ex-president Karachi Customs Agents Group (KCAG), Nasir Chandna criticised the government for giving over protection to the local assemblers. He informed the minister that total import cost of engine and chasis comes to Rs95,432 for 1,600cc car and after adding Rs300,000 for interiors and body building, the car should cost around Rs400,000 but the assemblers are minting huge profits by selling their product at Rs 900,000-1,000,000 per unit.

On other issues, Liaquat Jatoi said that one desk operation is being launched on Thursday at the Pakistan Industrial Development Corporation (PIDC) House. He said he had moved a summary in this regard in February to the government which was now being implemented. He said the one desk operation would be implemented in real spirit.

The minister noted that vested interests had been creating hurdles in way of industrialization and investment. He said the business community is being haunted by 21 agencies. He said that he had asked the prime minister to wind up some of the agencies.

He said he would also take up the matter of power generation in the private sector with the prime minister in order to attract foreign and local investors.

He said the government had completed 60 per cent rationalization of tariff and more would be achieved with the passage of time.

The minister said that Pakistan Steel would achieve production of three million tons in the next two years from the current 1.1 million with the help of Russia. He said that sales of the steel mill would reach to Rs22 billion in this fiscal as compared to Rs17 billion last financial year. He said modification of PMTF would be done by August 31.