Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) has expressed concern over the process to formulate Pakistan Auto Industry Plan (PAIP) 2014-19. In a letter sent to Prime Minister Nawaz Sharif, PAAPAM said after an initial flurry of activities, the formulation of the auto policy has again been placed on the back burner.
Therefore, the industry remains in a constant state of uncertainty. As a consequence, most of the major investments in the auto sector have been kept on hold since 2012. PAAPAM in its letter has serious objections on the process being followed by the government to formulate PAIP.
It said that position of CEO at the Engineering Development Board (EDB) has been lying vacant for over 18 months and any long-term auto policy could not be acceptable in the absence of an experienced and dynamic CEO. The EDB has so far not conducted any benchmarking exercise of other countries similar to Pakistan in terms of volumes & technological complexity while formulating the proposals for auto policy.
Pakistan had a total demand for 245,000 vehicles (out of which around 199,000 vehicles were locally produced while the remaining 46,000 were imported as used cars) till calendar year 2007. However, the volume remained as low as 137,000 vehicles in CY 2013, which is 45 percent lower than the level of 199,000 vehicles achieved in CY 2007.
The association criticised the government for not maintaining transparency in the preparation of PAIP, despite giving impression to take the industry on board. It further said that current exercise of auto policy formulation had lost its credibility as the government had neither appointed a competent CEO EDB nor engaged industry experts to get inputs on future vision for the auto sector.
The association also cited that around 3,000 used cars were being imported from Japan every month, providing a colossal revenue loss of Rs 1.2 billion per month to the industry. It also urged the government to look into the matter and take remedial measures to provide level playing field to the industry.
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