November 11, 2007	Sunday	Shawwal 29, 1428

KARACHI, Nov 10: In a strange and surprising move the Pakistan Automotive Manufacturers Association (Pama) has included Suzuki Bolan van in the classification of cars aimed at showing a handsome growth in cars production and sales. Previously, for decades the van had been categorised in the light commercial vehicle (LCV) segment.

To correct the previous records, Pama has consciously updated the sales and production figures available at the website back since 1995-96 by including Bolan in the 800cc car segment.

As a result of this the entire car market scenario, based on the production and sales figures since 1995-96, has now been changed, thus making the previous records a part of history. By including the figures of Bolan, it might have provided a big help in offsetting the negative growth in cars for the last two years as sales of some cars had been highly depressed for the last few months, thus impacting the overall growth figures.

A Pama official, who asked not to be named, said that the Engineering Development Board (EDB) had asked the association to start including the van in car category as it is classified at 8703 under Pakistan Customs Tariff.

Suzuki Bolan is definitely a car but he said that Pama has done this purely on technical reasons issued by the EDB instead out of any purpose aimed at fudging with figures to show improvement in car sales growth.

Surprisingly, this technical fault, as assumed by the EDB though very late, has remained un-noticed for decades, thus raising a question among car market watchers and analysts as to why the board has come out now to rectify the classification, which according to some market pundits still does not sound satisfactory.

An official in Pak Suzuki Motor Company (PSMC) was unaware of the joint Pama and EDB move but admitted quickly, “Bolan is certainly a LCV and not a car.”

For instant, if only car sales figures July-October 2007 are added to Bolan sale figures, the overall car sale has surged by 12.7 per cent to 57,167 units as compared with 50,707 units.

If the Bolan figure of 5,713 units for July-October 2007 is excluded then the car sales for the same period would show only 1.5 per cent growth as compared with 50,707 units (total car sales excluding Bolan) in the same period of 2006.

Car sales, which had been showing over 20 per cent growth during one and a half year back, have been showing continuous decline because of various reasons. One of the factors that can be attributed to the decline is the import of 46,278 units of used cars in 2005-07 as compared with 6,266 units in 2004-05.

The government, after opening a floodgate of used car imports, had succumbed to the pressure of local car makers to contain its import by reducing the age limit to five years in the last budget. As a result, the import of used cars had fallen to only 28,393 units in 2006-07.

In 2007-08 budget, the government announced a restriction on the age of imported used vehicles, disallowing import of vehicles older than three years. The local industry had already welcomed this step. However, this restriction was waived till August 31, 2007 and vehicles older than three years continue to find their way in the market.

According to director research Jehangir Siddiqui Global Capital Limited Mohammad Sohail the locally produced cars have been showing a negative growth because of two reasons. One has been the increase in car financing rate to 13-14pc currently as compared with eight to nine per cent two to three years back and secondly, is the piling up of unsold used car stocks in the market.

The Pama official was of the view that besides rising interest rates, imposition of 2.5 per cent withholding tax on locally produced cars had also made a negative impact as it had led to increase in the prices.