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Auto makers, vendors boycott MoI meeting

September 13, 2012

KARACHI, Sept 13: The Pakistan Automotive Manufacturers Association (PAMA) and Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) boycotted a meeting called by the Ministry of Industries in Islamabad on Thursday.

These associations boycotted the meeting as the ministry had also invited All Pakistan Motor Dealers Association (APMDA) Chairman H.M. Shahzad.

PAMA Director General Abdul Waheed Khan had already recorded his apprehensions to the Secretary Ministry of Industries Shafqat Hussain Naghmi on September 7 over the invitation.

“APMDA is not a stakeholder in the subject matter of the meeting. The facility for import of used cars is for overseas Pakistanis and APMDA is neither a representative body of overseas Pakistanis nor is supposedly involved in the activities meant for them,” he said in the letter to Secretary Industries.

The members of motor dealers’ association are purchasing documents from overseas Pakistanis at a meager amount and import the vehicles themselves which is tantamount to commercial import which is illegal, the letter added.

He said the local auto industry enjoys a share of 15 per cent in large scale manufacturing and pays over Rs70 billion in terms of revenue to the national kitty. PAAPAM had also protested over the Ministry’s invitation to APMDA. However, a 52 member delegation of the Association had already left for Frankfurt to attend the Automechanika Fair from September 11 to 16.

The AMPDA chief said that Secretary Industries had taken input from the used car dealers. Later the APMDA delegation also held a meeting with the Chairman Federal Board of Revenue (FBR) and Member Customs FBR over the issuance of Customs General Order (CGO) which would discourage import of used cars besides raising their prices.

He informed the Secretary Industries that the local industry was making hue and cry over imports of used cars but practically they did not give any satisfactory performance in the last 30 years. He recalled that the auto assemblers failed to achieve deletion targets and in fact there was some roll back since the introduction of Tariff Based System (TBS).

Same parts are deleted as in the 60s. Not a single functional engine, gearbox or electrical part is manufactured by the vendors. Under TBS, parts can be imported from countries like Thailand, Malaysia, China, Singapore etc.

He said that low price peoples’ car remained a distant dream even after 30 years and car prices were increased by 100 per cent in the last four years on the pretext of rupee devaluation against the Yen and other currencies.

The assemblers were taking 100 per cent advance payment from the customers for booking of cars and took months to deliver. They transferred the taxes to the government at the time of delivery of cars.

Shahzad said huge foreign exchange is being spent on import of parts and kits for assembling of cars. He said the government received over Rs30 billion in shape of revenue from import of 55,000 used cars in 2011-2012.

He claimed that FBR officials had assured the Association to look into the problems of the used car importers regarding issuance of CGO on August 31, 2012.