LAHORE, Sept 29: An investment of Rs19 billion is expected to be made by auto assemblers and vendors over the next two years to meet a growing demand of cars, buses, trucks, motorcycles, and tractors in the country, according to the PAAPAM.

In a letter addressed to the commerce minister, the PAAPAM has indicated that the vendors plan to invest around Rs15 billion and the assemblers Rs4 billion. The additional investment would raise the existing level of investment by vendors to Rs41.2 billion and by assemblers to Rs18.8 billion, according to the letter.

The plans for additional investment are based on the projected demand for 2004-05. The PAAPAM forecasts that the demand for cars would increase to 115,186 units by the end of fiscal 2004-05 from the last year’s 61,814. Similarly, the demand for buses is likely to surge to around 2,210 units from 1,096 during the same period, for motorcycles to 416,857 from 165,105, for trucks to 3,168 from 1,929, for tractors to 30,307 from 26,240, and pick ups to 21,335 from 13,371.

However, the PAAPAM fears that the production of vehicles that has seen 54 per cent growth in the recent years may suffer if the government decides to import re-conditioned cars. “As a result of downturn in production, we are going to suffer adversely,” says a leading vendor. He tells Dawn on Monday that the vendors intended to make additional investments to enhance their production and to bring new technology on the basis of the growth forecast over the next two years. “We are putting in our money because we know that a strong domestic industry would also help us push up exports. If the government allows import of re-conditioned cars, it would not only ruin the automotive industry but also result in loss of jobs in the country,” he says.

The government, it must be recalled, has already constituted a task force to look into the possibility of allowing import of re- conditioned cars as well as to conduct a comparative study of the car prices in Pakistan and other regional countries. It is likely to submit its recommendations on Tuesday (today). The possibility of the task force proposing allowing import of the re-conditioned cars has scared both assemblers and vendors. “Such a decision isn’t going to affect the assemblers. They’ve a range of products to offer. They would wind up their operations in this country and start importing their products from Japan and elsewhere and continue to make money. It would be easier for them but hard for us to cope with the consequences,” the vendor says.

He also reminded of the impact of temporary import of vehicles under the yellow cab and green tractor schemes. “We had no sooner come of the crisis caused by those schemes that we are faced with yet another threat.” Urging the government to move swiftly to squash the rumours as well as make a firm commitment to continue the current policy, he maintains that “reports being carried by media have already begun hurting the industry by creating an uncertainty.” Meanwhile, a senior executive of Indus Motors claimed that the car prices in Pakistan were “lower” than other regional countries including India and Malaysia.

“A recent study of the Engineering Development Board (EDB) has also corroborated our claim,” he said. Admitting that buyers were facing the problem of late delivery and premiums being charged by investors on cars, he said: “It’s an area where the government is supposed to intervene and protect the interests of consumers.” He reiterated the demand that the car must be registered in the name of the person(s) who books it.

“I assure you that this measure alone would not only eradicate the practice of charging premiums by investors, but also cut down the waiting period to half,” he said. He said 40-50 per cent cars were being booked by the investors who are charging premiums from the buyers and inhibiting early delivery (of cars) to the genuine buyers.