KARACHI, Oct 18: Influx of cheap Chinese TV (both smuggled and under-invoiced) coupled with the ongoing racket of using old picture tube of computers to make a new TV set of 14-17 inches have forced the assemblers to slow down their production by 20,000-30,000 units per month in August and September each as compared to previous pace of rolling out 70,000-80,000 units per month.

After enjoying a boom period of 2002-03, the assemblers have now started feeling the pinch of heavy inflow of TVs at remarkably low prices. Local producers are now pondered over dwindling sales in the last two months since the price war and competition are stiffening with cheaper products.

As a result of stiff competition, the assemblers have now become bound to revise their prices after every two to three months in order to stay in the market, which is being gradually taken over by the cheap Chinese TVs.

A new Chinese TV of 21-inch can now be easily purchased at price ranging between Rs9,000 and Rs9,500 (with five years picture tube guarantee) as compared to locally assembled Korean brand of Rs18,000-19,000. The 20-inch Korean assembled model can be purchased at Rs12,000. A 14-inch Chinese TV is priced at Rs5,000-6,000 as compared to locally assembled models at Rs7,000.

Besides availability of new Chinese models, many market players have now become assemblers to cash the rising demand. They are producing small TV sets of 14-17 inches in the cottage industry by using the second-hand picture tubes of computers and rolling out colour TV with new outer casings, arriving from China. The prices of these so-called TVs range between Rs3,500 and Rs4,500, which has somewhat enlivened hopes of a low income group who cannot afford to buy high quality TVs.

“Our sales have been declining for the last one or two months and that is why we had to slow down our production,” Pakistan Electronic Manufacturers Association (PEMA) chairman Sarfarazuddin told Dawn.

Around 10 local assemblers rolled out 764,612 TV sets in 2002-03 as compared to 450,000 in 2001-02, he said. The association, he said, had approached the Central Board of Revenue on October 15 to pull out the industry from a difficult situation.

He said the import of TV components was allowed at five per cent import duty under HS Code 8529.9090. Unscrupulous elements, taking advantage of this provision, are importing TV components in the form of printed circuit board (PCB) at a heavily under- invoiced price. Second-hand monitors and drastically under-invoiced imported picture tubes are then used with the assembled PCB to convert it into a television set.

Such sets, he added, were sold in the markets without payment of sales tax at unbelievable low price. The activity is increasing at an alarming pace. He said large quantities of these items were in transit from China as the importers had been encouraged by this tariff anomaly. He urged the CBR to remove the HS Code 8529.9090 from the tariff and alternatively duty on CKD import of parts under HS Code 8529.9090 should be increased to 25 per cent.

Besides, the government has also increased the import duty on used picture tube of computers to 25 per cent from zero per cent, but it is yet to discourage the importers and the business is still thriving and many parties are still bringing huge lots in containers because of cheaper rates in China. On the other hand, there is hardly any scarcity of old computers available in the market and people engaged in assembling colour TV from old picture tube have many sources to acquire old computers and make use of old picture tube.

Majority of dealers are offering public to make computer a TV with facility of 256 channels with speakers and remote, besides offering three months warranty.

“We expect production of 800,000-850,000 units in 2003-04 in case the government comes for the rescue of the industry by removing the anomaly,” the PEMA chairman said, adding if the anomaly was not addressed production of TV might range between 500,000 and 550,000 units in the current fiscal year.” The advent of Chinese TV has changed the market scenario and public sentiments, thus developing a second thought in the mind of the prospective buyers to think before purchasing a colour TV either locally assembled (Koreans) or Malaysian assembled Sony and Panasonic.

The entry of some banks in consumer financing at zero per cent down-payment and mark-up has somewhat further flared up the demand of locally-assembled colour TV as this facility does not cover the smuggled, under-invoiced and Chinese TVs. Many dealers have introduced various easy monthly instalment schemes on their own.