Paapam for withdrawal of duty concessions on used cars
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LAHORE: Pakistan Association of Automotive Parts Accessories Manufacturers (Paapam) has sought withdrawal of duty concessions on import of used car.
In a press release issued on Saturday, Paapam Chairman Muhammad Siddique Misri said that the sector has been under stress for a long time.
He called the nationalisation policy of 1970s the first blow. “After deregulation in the late 1980s, the sector recovered expanding the annual production capacity to 273,000 vehicles at eight assembly plants.
The auto sector came under stress again in 2005 when the government opened the doors for import of used cars,” he said.
Since 2005, domestic production of automobiles has declined by 30 per cent, five assembly plants have been shut down and the global brands have shown lack of interest to invest in a country, the Paapam chairman said.
The Paapam chairman said 40pc of the currently installed capacity in the country was lying idle.
He said the auto parts manufacturers were playing an important role by producing high quality components being used in latest assembled vehicles.
He defended the increase in car prices on the basis of rising cost of production.
He said the delivery time was between 4-6 weeks. “The premiums, if any, are being charged by scrupulous middlemen and investors, who hoard and create artificial shortage of a given model to make illegal profits,” he noted.
‘No localisation’
In Karachi, All Pakistan Motor Dealers Association (APMDA) Chairman H.M. Shahzad has said that local car assemblers have not achieved localisation or improved quality of the vehicles.
In a letter to Finance Minister Ishaq Dar, the APMDA chief stated that the assemblers are reluctant to pass on the benefit of 40pc depreciation of Japanese yen to the end users in shape of any price cuts. Besides, they have also failed to ensure ready delivery of cars, forcing buyers to pay premium on spot delivery.
He said the local car industry has emerged as ‘assembler’ instead of ‘manufacturer’ and car vendors are still making decades-old parts.
Published in Dawn, March 29th, 2015
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