• Home
• /
• Business

Pakistan mulls withdrawing protection for auto sector

"We are considering this proposal because of the complaints of high prices and delayed deliveries," said Minister for Commerce Mr Humayun Akhtar.

"This extra-ordinary protection has to be removed", he told reporters here yesterday. He said that Pakistan was part of international trade negotiations and this issue was being raised at every level.

He said that two-three ministers would sit together in the next few days to discuss the issue in detail and then call the automobile industry to set a roadmap for a period of 10-15 years to implement.

He agreed that delivery period of the car industry was frustrating for the buyers and did not agree that import of reconditioned cars could be seen as an alternate.

Minister for Industries and Production Liaqat Ali Khan Jatoi has however all the praise for the car industry and a totally different point of view.

He told the National assembly yesterday that backlog of 4,500 Corolla cars is expected to be cleared by June this year as Toyota had introduced double shift to further enhance its production from March.

Many MNAs including Dr Sher Afgan Niazi believed the industries minister was rather acting like a spokesman for Toyota company.

The industries ministry believed that permission for import of reconditioned cars would destabilise the local industry which had provided a around 100,000 employment to the local people and an investment of around Rs20 billion.

Under the deletion programme, car industry has so far achieved 50-70 per cent indigenisation, followed by 48-83 per cent by tractors, 77-83 per cent in motorcycles, 38-63 per cent in commercial vehicles and 45-47 per cent in buses.

The industry has to phase out this deletion programme by December 2006 but was quoting reasons like to smuggling, gross mis-declaration and under-invoicing to delay this deadline.

They said that they were in the process of upgrading their technologies which required some more time to stabilise. Auto- vendors capacity to compete in the OEM market is not yet fully developed to freely compete with foreign OEMs.

The industries minister said that under double shift production will increase from 870 to 15,00 vehicles per month in March.

He said the government has been intensively interacting with the car-manufacturing sector. A number of meetings were held to liquidate the problems of shortage of new cars in the local market.

All the car manufacturers have been asked to increase their production to meet the demand, he further stated.

He said if any car manufacturer failed to deliver the car within 60- days, it will refund the mark up to the customer. The car manufacturers are refunding the mark up amount at the rate of 6 per cent to the customers in case they fail to deliver the car within 60 days, he said.

He further told the house that the automobile manufacturers also agreed in principle to slash prices of cars very soon in order to share profit with the consumers.

It has been mandatory, he said, that there would be no booking in bulk in future in order to eliminate role of the middleman. Similarly, after discussion with the provincial government's, it was decided that a car would not be transferred to any other person before six months of registration.

He said that Pakistan was now able to export spare parts of cars and in this connection markets are also being explored in Saudi Arabia, Qatar and Behrain. He said that Pakistan has exported spare parts of $32 million during current year.

He said it was not in the national interest to import reconditioned cars because it created huge liability of foreign exchange for import of spare parts because spare parts of these old models cannot be economically produced by the local vendor industry.