KARACHI: Car assemblers have asserted their position reacting to the criticism by the State Bank of Pakistan (SBP).

In a letter to the SBP chief economist, the Pakistan Automotive Manufacturers Association (Pama) criticised using the plea of Rs67.2 billion short-term investment for imposing 100 per cent cash margin condition for the import of completely knocked-down kits (CKDs).

“We believe including an industry in a certain regulatory measure on such grounds is not fair,” Pama said in the letter sent on March 20. Pama said assemblers do not take full payment in advance. “They are actually managing the vehicle booking/delivery on partial payments in accordance with Auto Policy 2016-21,” it said.

The association said the three assemblers also make sure that the delivery time is not extended beyond two months. They claimed that customers are duly compensated with the payment of markup at the rate of Kibor plus 2pc for the period over and above two months.

It informed the new condition will raise the cost of doing business for the local industry to the advantage of used car importers.

The association urged the SBP to waive the cash margin requirement for CKDs.

The spokesperson for Pak Suzuki Motor Company, Shafiq Ahmed Sheikh, said the SBP’s decision will further delay the delivery of vehicles and hamper future expansion and investment plans.

According to All Pakistan Motor Dealers Association (APMDA) Chairman H.M. Shahzad, car assemblers are fleecing people by demanding payment in advance while delivering the vehicle after a lag of three to six months.He said assemblers increase prices of their cars arbitrarily.

He said the local industry did not pass the impact of depreciating yen to consumers.

Published in Dawn, March 22nd, 2017