Automobile industry facing worst ever crisis: 40 percent decline in production

The automobile industry is facing worst ever crisis due to multiple causes and its current production is down by 40 percent, automobile and auto parts manufacturers told Business Recorder here on Sunday.
The Pakistan Association of Auto Parts & Accessories Manufacturers (Paapam) and Pakistan Automobile Manufacturers Association (Pama) is holding a joint meeting in Karachi today (Monday) to take stock of the industry and make recommendations to the government to arrest the decline in automobile production.
Paapam chairman Muhammad Aslam Malik said due to financial crunch and decrease in demand of the auto-parts by the automobile manufacturers in recent months, the vendors are closing down their units or laying off up to thirty percent of their skilled labour force.
Malik said with nearly 30 percent depreciation of Pak rupee during 2008, cost of the imported raw material and automobiles has also increased. He said the meltdown of foreign exchange reserves has also hit the auto parts vending industry and some countries have refused to accept Pakistani importers' Letter of Credits (LCs) for import of auto parts raw material.
Malik said the government has enhanced the banks' mark up and some banks are charging up to 19 percent mark up from the auto parts manufacturers.
He said the association has more than 200 members but the total number of auto parts manufacturers has exceeded 1,000 who are providing jobs directly or indirectly to over 200,000 family.