Arif Habib, Chairman of the Karachi Stock Exchange (KSE) has expressed concern over the government's decision to allow import of second hand cars which would throttle the investment made in the local auto industry.
He said that the exchange showed concern over the decision by the federal cabinet on Thursday to allow import of new and used cars, which is a major setback to the investment in local automobile manufacturing industry.
He, however, expressed his satisfaction on the decision to reduce import duties on Completely Built Unit (CBU) and Completely Knocked Down (CKD) units of cars with lower engine capacity, which would ultimately bring down the price of these cars in local market to the benefit of small and medium class consumers.
The automobile industry, he said, is a manifestation of the foreign direct investments in Pakistan and due to recent government policies and increase in demand and production has resulted in substantial additional investment including the vendor industry which provides considerable employment opportunity to professionals, skilled and unskilled labour.
Recently, almost all the manufacturers have increased their production capacities, which in turn, ease down the demand/supply gap and result in reduction of premium.
Any such decision to allow import of reconditioned cars would create serious negative impacts on this industry as well as general investment in this sector.
It is highly recommended to create competition in the automotive industry to bring the prices within the range of consumers besides ensuring timely deliveries. However, the negative factors of the industry like premium rate and delay in deliveries should be addressed separately by introduction of appropriate monitoring policies.
He hoped that the committee would consider these factors and support the present policy, which encourages domestic production, increase in employment and enhancement in investment.
Comments
Comments are closed.