ISLAMABAD, April 29: The car manufacturers and the government hold talks on Wednesday in Karachi to come out with a price reduction for the consumers, official sources said.

Industries and Production Minister Liaquat Ali Jatoi has convened the meeting of auto sector with a single point agenda of price reduction. The meeting will also be attended by officials of the engineering board.

Senior officials of the industries ministry, however, told Dawn that any price reduction to be announced by the industry on the demand of the minister could not reach the consumers in the prevailing circumstances.

These officials said that announcement by the minister or the car industry could not reduce prices in the market unless a comprehensive agreement was reached between the two sides on a proportionate increase in the car production.

In the given circumstances, only the middlemen and black- marketeers would benefit as the premium prices would rise as a result of increase in demand arising out of an announcement of price reduction.

They said a comprehensive plan would have to be chalked out with every company particularly of the two popular brands like Toyota and Suzuki with clear-cut targets to increase their production on a monthly basis to meet the additional demand that would arise out of price reduction announcement. Even before that time, the minister would have to ensure in consultation with the car manufacturers to clear the existing backlog.

The government also has to share its revenue in the form of reduction in duties on import of CKD kits and other items if it really wants to reduce car prices, these sources added.

As the middlemen continue to earn big windfalls in the form of premiums, the production of cars during the first nine months of the current fiscal year increased by more than 52 per cent. It increased to 42,436 units as compared to 27,848 units of the corresponding period last year.