Plagued by the same old ghosts who have consistently been foraging away at the demand for locally manufactured automobiles, the auto industry has experienced a throwback yet again; posting worryingly dismal figures at the end of July 2012. Plunging down by 46 percent over June alone, car sales stood at 10,435 units at the end of July 2012, according to figures releases by PAMA, which highlights generally subdued buyer interest. Compared year on year, industrys sales fell by 41 percent, clearly attributable to a high base effect witnessed as a result of below the line sales in Jul11 when customers deferred buying in anticipation of a tariff cut expected to be announced in the FY12 budget. Also compounding the effect was the phasing out of the Punjab Taxi Scheme, in lieu of which an additional 20,000 units had been sold during last year. As a result, PSMC - which was a market leader in terms of sales last year- witnessed a massive 53 percent YoY decline in units sold. Indus Motors, while managing to post record year-end profits, suffered pretty much the same fate, with its total car sales suffering a 32 percent YoY decline, going down to 3,087 units in July 2012, from 4,551 units sold in the same period last year. Largely anticipated, these declines in sales figures come principally off the back of mounting pressure from imports which have been made even more attractive due to the price differentials between local and foreign manufactured vehicles. Continuing to remain a thorn in the side of the local auto manufacturing industry, foreign imports of CBUs rose by 25 percent from last month to 4,950 units in July 2012, catering to roughly 32 percent of the consumer demand in the market. On the other hand, making the situation worse is the Engineering Development Board, which is responsible for the drafting of the much awaited AIDP-II policy. Managing to strike fear into the hearts of the local auto industrys stakeholders, EDB is expected to lay the stamp on further import tariff reductions, supposedly allowing for a level playing field in the local auto industry, which according to EDBs officials has long been monopolised by the existing giants. While market voices differ in their opinion on the issue of rising imports and its affect on the local market dynamic, the consensus remains that policy-makers should not allow for unfair advantage against localised manufacturing. "We don need to have policies that essentially create win-lose situation" points out Ali Habib, Chairman Indus Motors, in a recent interview to Business Recorder. "We do not oppose imports at all", he reiterates. "What we do oppose is this biased and flawed policy which is taxing local production more than it is taxing imports, without taking into consideration the millions of people in the auto industry workforce who are going to be directly affected by the extraordinary concessions being afforded to the relatively undocumented used car sector".
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