KARACHI: The Planning Commission in its presentation to the Economic Coordination Committee (ECC) has called for drastic reduction in rates of duties to 10 per cent on automotive parts.
The PC recommendation has sparked anger among members of the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) who feel that a major policy shift is being actively marketed by the Commission without even sharing it with the local industry.
Association Chairman Aamir Allawala said country’s auto industry has attracted major investment, not only in assembly of all kinds of vehicles, including cars, motorcycles, tractors, trucks and buses, but also in manufacturing of parts required for these vehicles within the country.
Currently, more than 1,600 Vendors are producing parts of global quality standard for local assemblers. In case of motorcycles and tractors, 90 per cent parts are being locally produced, while in case of passenger cars, the figure ranges from 55 to 70 per cent.
Leaving aside the false propaganda made by the used car lobby, the prices of vehicles made in Pakistan are competitive when compared with neighboring countries. In fact, he claimed the industry is producing the cheapest motorcycles in the region and the cheapest tractors in the world.
He said that that any reduction in import duty on auto parts will cause irreparable damage to the local industry, which is already suffering from excess capacity, rising cost of production, shortage of electricity, political / economic uncertainty and devastating law-and-order situation.
Parts manufacturing industry employs almost 200,000 skilled workers and creates opportunities of development in various sectors of the country’s engineering industry.
He pleaded to the government to provide stability of policy rather than disturbing the industry with measures, such as opening up used cars and proposals to reduce Customs Duties
He said the PC has not even bothered to respond to the scores of meeting requests sent by the association and urged that a proper stakeholder forum be set up to deliberate the proposals by the Planning Commission before presenting them to the ECC.
