THIS refers to the news item “FY21 ‘recovery year’ for auto sector” (July 14). That cars, buses, trucks and other commercial vehicles are being produced in Pakistan is a misstatement. Complete automobile manufacturing plants do not exist and indigenously designed vehicles have not yet seen the light of the day. The components and parts of international brands are imported and assembled for decades now which do not add much value. There is a plethora of assembling plants that do not provide the economy of scale either.
The three established auto assembly plants have a deletion of mere 25-30 per cent in value terms. The later entrants are having a deletion under 10pc. Some new assembling units have been set up with an investment as low as $10 million, which is not sufficient even for a cycle manufacturing plant.
The government is upbeat about the surge in sales of cars, and the reduction in duties on smaller cars is meant to further boost sales. There can be nothing more damaging than this flawed strategy. The sale of cars does not contribute to the economy and it does not serve over 95pc of the people who remain dependent on public transport. Needless to say, sufficient investment in public transport has been ignored by successive governments. With the increase in the number of cars across the country, the consumption of petrol has surged, raising the oil import bill, besides the congestion on roads and pollution level.
The government must discourage more private vehicles and incentivise public transport to reduce the cost and save money. It should also focus on complete manufacturing rather than just assembling.
We must learn from India which started producing its own vehicles during the 1950s. The models remained unchanged for years until the country was able to assimilate and master newer technology and attract foreign investment in manufacturing.
India has now become one of the leading automobile manufacturing nations and is exporting vehicles to other countries. Policies in this country have always been made by those sitting in Islamabad at any given point in time for the well-to-do class, while no heed is paid to either the national interest or the welfare of the 95pc of our population.
Shoaib A. Majeed
Published in Dawn, July 27th, 2021