KARACHI: The import bill of semi- and completely knocked-down kits (SKD/CKD) for locally produced heavy vehicles, cars and motorcycles crossed $1 billion in 2016-17, showing a jump of 24 per cent from last year.

The share of SKD/CKD kits for cars in total imports was $674 million in 2016-17, up 30pc year-on-year.

Imports of parts and accessories for assembling heavy vehicles rose 23pc to $263m in the last fiscal year.

Imports of SKD/CKD for bike assembly fell 2pc to $92m in 2016-17, figures released by the Pakistan Bureau of Statistics showed.

Rising imports of car parts give an impression that local assemblers have been missing the target for achieving higher localisation of production.

A parts maker said that Pak Suzuki introduced WagonR, Swift and new Cultus for which the localisation levels are quite low. This can be one of the main reasons for the surging import bill of kits as Pak Suzuki enjoys over 50pc market share.

New Honda Civic production and the assembly of Honda BR-V also started from April while the sales of latest Toyota Fortuner also rose to 1,375 units from 602 units a year ago.

Overall sales of cars rose slightly to 185,781 units from 181,145 units. Sales of Suzuki WagonR stood at 17,671 units versus 9,709 units in 2015-16.

A source said that Pak Suzuki has achieved 66pc localisation in Mehran, up from 17-18pc in 1990. Bolan and Ravi have 65pc and 61pc local parts, respectively, while old Cultus had 62pc localisation. New Cultus has 35-36pc local parts, followed by 50pc local content in WagonR.

The parts maker said higher localisation will bring down prices, increase employment and curtail the import bill of kits. He said new entrants should review their localisation policy to benefit local parts makers and consumers.

As for the increasing import of kits for heavy vehicles, an assembler said the average localisation in heavy vehicles is 45pc now. Prior to 2006, the assemblers were bound to delete parts by 1-1.5pc every year. But they are no more bound to do so after the introduction of the tariff-based system. “The assemblers cannot achieve localisation by force. They can achieve it at their own will,” he said.

In bikes, one assembler from Japan and China each have been breaking sales and production records for the last few months. A parts maker said that higher localisation of over 94pc achieved by a leading Japanese assembler can be the main reason for the declining trend in the import of parts and accessories. Atlas Honda sold 960,105 units in 2016-17 compared to 811,034 units in the year ago. In May, it sold a record 93,060 units.

United Auto Bike sales swelled to 326,298 units in 2016-17 compared to 262,773 units in the preceding year.

Barring Nissan trucks whose sales fell, the other three members of the Pakistan Automotive Manufacturers Association enjoyed booming sales in 2016-17, pushing up the overall figure to 7,499 units from 5,550 units in 2015-16.

Published in Dawn, July 23rd, 2017