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KARACHI: Vendors of tractor parts are worried over suspension in production of tractors by the makers of Fiat from Dec 15 while its rival company has given no schedule for parts procurement for January 2012.
Farm machinery producers, as well as growers, are confused whether the government would retain the 16 per cent GST or remove or reduce it. The GST was imposed on March 1.
Chairman, Pakistan Association of Automotive Parts and Accessories Manufacturers, Syed Nabil Hashmi, told Dawn that Al Ghazi stopped producing tractors from Dec 15 due to sharp drop in sales and unsold stocks.
He said Al Ghazi had 1,400 tractors in stock while over 2,000 units are in showrooms worth Rs2.3 billion. The value of stocks of parts at the vendors end is Rs3.2 billion.
He added that Millat’s vendors dead stock inventory is estimated at over Rs2.5 billion.
Al Ghazi did not produce any unit in August and September 2011 and resumed production from October 2011 by making only 746 units and 1,555 units in November 2011 as against its average monthly production of 2,000 units in 2010.
He said that the makers of Millat tractors, Massey Ferguson, have also asked vendors to stop supplying parts.
According to figures of Pakistan Automotive Manufacturers Association, Fiat tractor production and sales dropped sharply to 2,936 and 3,613 units in July-November 2011 as compared to 9,576 and 9,479 units in the same period of 2010.
Production and sale of Massey Ferguson also plunged to 11,733 and 11,894 units in the last five months of 2011 as compared to 24,907 and 24,696 units in the same period of 2010.
PAAPAM chief Nabeel said the matter of GST was deferred in the last Economic Coordination Committee meeting and a committee was set up before next ECC meeting.
He said no meeting of the committee had so far been held as Advisor to Prime Minister did not convene any meeting.
He said the Federal Board of Revenue (FBR) should not have any role in policy-making as after the announcement of a policy by the government, the FBR vetoes it.
“The government should announce a decision about the fate of GST on tractor to clear a lingering confusion among growers and local industry,” he added.
Senior Executive Director Millat Tractors Sohail Bashir Rana told Dawn that the company had been reducing procurement of parts from vendors for the last three months. Some vendors have been asked to suspend supply in November while others have been urged to stop supply during December. The company issues delivery schedule for parts procurement to vendors every month.
He also confirmed about company’s build up stocks of 1,200-1,400 units at the plant and dealership network, and said that the company is rolling out negligible volume of tractors.
