September 18, 2003	Thursday	Rajab 20, 1424

KARACHI, Sept 17: The setting up of task force and beginning of WTO talks in Cancun has caused a decline in the market capatilization levels of the auto sector at the Karachi Stock Exchange (KSE).

Pak Suzuki stock price has declined by 21 per cent to Rs145 followed by drop of 21 per cent in Indus Motor’s share to Rs99.7. Honda Atlas’s price has fallen by 20 per cent to Rs 87.5 since the setting up of task force on Sept 2.

Setting up of the task force was aimed at examining the actual cost of imported completely knocked down kits (CKD) and that of locally produced parts, late car deliveries and excessive immediate delivery premium. The task force will submit its report on September 30 to the federal cabinet.

Research analyst Abdul Azeem at Invest Cap says the task force is likely to take some meaningful steps to exert pressure on local car assemblers. Increased production could be a solution for late delivery issues. Honda City’s delivery time now stands at over one year. While Corolla’s and Suzuki’s delivery time ranges between four to six months.

Meanwhile, according to the data, released by the Pakistan Automotive Manufacturers Association (PAMA), production of cars in July-August 2003-2004 went up by 52 per cent to 12,474 units from 8,186 units while sales rose by 55 per cent to 12,348 units from 7,945 units in the same period of 2002-2003.

Suzuki Mehran production jumped by 84 per cent to 3,492 units in July-August as compared to 1,900 units while sales posted a rise of 87 per cent to 3,626 units from 1,941 units. Alto 1000cc production and sales stood at 907 and 910 units as compared to 602 and 580 units in the same period of last fiscal. Cultus’s production and sales recorded at 1,354 and 1,405 units as compared to 1,133 and 1,042 units

A total of 3,449 units of Toyota Corolla were produced in July-August as compared to 1,684 units while sales peaked to 3,251 units from 1,572 units.

However, Honda Civic’s production and sales registered a drop of 7.5 per cent and 12 per cent to 920 and 895 units in July-August as compared to 995 and 1,017 units respectively.

According to Invest Cap, the local auto industry, which is highly protected through import duties on completely built up cars ranging from 75 to 150 per cent on different engine capacities, may have some relief after the failure of talks in the WTO meeting.