26 December 2004	Sunday	13 Ziqa'ad 1425

KARACHI, Dec 25: The government's plan to bring about changes in the deletion levels and revamping of Engineering Development Board (EDB) has caused uncertainty among the local auto parts industry , which now seeks an early meeting with Prime Minister Shaukat Aziz before a final decision is taken.

Members of the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) are upset by the change in government policies regarding deletion levels and revamping of the EDB.

Chairman PAAPAM, Mehdi Ali Rizvi has informed the prime minister through a letter that members of the association has made further plans to invest Rs100 billion in the next five years that will open new avenues for three million people.

Currently PAAPAM represents over 850 vendors who have invested Rs 70 billion, providing employment opportunities to 1.5 million highly skilled Pakistanis.

A source in the vending industry said that PAAPAM is basically highly concerned over Industries Minsiter, Jahangir Khan Tarin's statement earlier this month that the federal government would soon allow new car makers to start production at 40 per cent deletion levels in order to attract fresh investment in the sector and inject competition in the market. He added that it would have a positive impact on the growth of the vending industry. Besides, he also disclosed at various forums over restructuring of the EDB by injecting fresh blood as the Board had failed to show any impressive performance in the past. He said that the government had already allowed two tractor makers to start production at 40 per cent deletion to meet 80 per cent deletion targets in the next five years.

The source said that under the current policy, entrants in car manufacturing will have to start production at 60-70 per cent deletion and 80-90 per cent in motorcycles which the current assemblers have achieved in the last 15 years.

A vendor said that the industries minister is trying to roll back the deletion programme which is a cause of concern for the well-established local vendor industry.

PAAPAM chief, in the letter to prime minister, said that what has been achieved today is due to the consistent policy of the government for the last five years.

On the other hand, car makers are also worried over the future of vendor industry in case the government takes any final decision regarding change in deletion levels and revamping of EDB.

A car maker said that any change in deletion programmes may not hurt much the car makers but it will give a severe blow to the existing and future investment plans of vendors besides rendering thousands of people jobless.

Car makers have also planned to invest heavily in expansion plans and capacity enhancement over the next few years.

Chief Executive Officer and president, Honda Atlas Cars Pakistan Limited, Mamuro Suwama, in a letter to industries minister, Jehangir Khan Tarin, has revealed the three years mid term plan in which the company intends to invest Rs 1.8 billion in 2005-2006, Rs 1.1 billion in 2006-2007 and Rs650 million in 207-2008 in production capability, BMR, enrichement of mode l line up, local vendor development, etc., as compared to Rs430 million being invested in 2004-2005.

The current employment in 2004-2005 stands at 1,060 persons which will add another 1,230 in 2005-2006, 1,400 persons in 2006-2007 and 1,500 in 2007-2008. Production of cars will increase to 28,000 units in 2005-2006, 38,000 units in 2006-2007 and 45,000 units in 2007-2008 as compared to 20,000 units in 2004-2005, Mamuro said in the letter.

Indus Motor Company, makers of Toyota and Daihatsu cars, also plans to invest Rs 800 million in the coming year on plant expansion after investing Rs 700 million in the last two years on capacity expansion. The company intends to open new job opportunities in 2005. Presently there are 1,400 employees as compared to 900 in December 2003.

Dewan Farooqui Motors plans to further invest Rs 200 million in 2005 and plan to further invest Rs 500 million in production facilities in 2006-2007.