According to a Recorder Report, manufacturers of commercial vehicles fear that any change in the current policy, allowing import of more than five years old trucks and buses, might put in jeopardy Rs 5 billion investment in manufacturing plants as also Rs 8 billion investment made by the vendors.
Making a pointed reference to the strong possibility of such a change in policy, the manufacturers have described the approach as laden with risks not worth taking, in the larger interest of the national economy. Viewed in the historical perspective of this vital sector of the economy, their apprehensions sound genuine.
For as the truck manufacturers have contended, the policy announced in July 2005-06 for liberal import of used trucks and buses resulted in a sales revenue loss to the tune of Rs 16 billion to local manufacturers and Rs 8 billion to vendor industries. Add to this, the loss of 0.3 million new job opportunities with the manufacturers and vendors, and it will bring to the fore a clear idea of the negative impact of that policy on the economy.
Again, as they have elaborated, coming in the wake of announcement of the 2005-06 policy, import of used trucks was marked by a quantum jump to over 11,000 vehicles, thereby causing a steep fall in the sale of locally produced trucks to 7,400 only.
As such their conclusion that the vehicles imported outnumbered the locally produced vehicles should leave little to doubt. The same can be said about the import of over 1,200 used buses in the same period, against local production of 1,500 buses.
It will also be noted that the predicament of commercial vehicle manufacturers is largely due to the twists and turns the industry has been subjected to over a pretty long stretch of time. For as they have recalled, commercial vehicles industry figures prominently among the oldest industries of the country.
That this recollection might arouse feelings of nostalgia can hardly be ruled out. Trucks and buses were in production at the General Motors, as early as in 1954. This should adequately support their argument in this regard.
Tracing the industry's origin to just seven years after independence, the manufacturers have noted that the government patronised it to the extent of restricting one or more trucks and buses under the gift scheme with the condition that such imported trucks should not be more than two years old.
Moreover, the importer had to furnish documents such as earning certificate and registration book of the imported vehicle, to determine the age of the vehicle.
The continuation of that policy until 1993 can be seen as supportive of development of the commercial vehicle industry. However, minor changes in the import policy made in 1993 will appear to have started a reversal of the process, rather than its consolidation. Although slight modifications were made in import conditions in 2000, these proved of little avail in benefiting the domestic industry.
More to this, come July 2005, to the detriment of the local industry, the rules for import of vehicles were substantially changed, thereby providing a boost to the import of used trucks and buses. And it was in July 2006 that shifts and changes in respect of import of vehicles opened the floodgates for import of very old trucks and buses, of all types of description and models, with no guarantee of availability of parts and service facilities.
Eventually the policy was withdrawn due to constant protests by vehicle manufacturers, in March this year. It is, in this perspective that manufacturers of commercial vehicles have appealed for the continuation of the policy now in force to help save the industry from the looming disaster.
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