The year 2003 was a 'tremendous year' for automotive parts manufacturers in Pakistan as due to support extended by the government the sector once again performed at its best with increased demand from its customers in cars, motorcycles, trucks, tractors and buses.
This has been stated in annual review for 2003 and future outlook prepared by Pakistan Association of Automotive Parts & Accessories Manufacturers (Paapam) Chairman, Syed Nabeel Hashmi.
'State Bank of Pakistan's policy of downward revision of mark-up with excess liquidity supply is now helping a lot to auto parts makers to move ahead in much-needed B.M.R phase.
We, however, expect auto loans to further see reduction in mark-up and also hope that the insurance mechanisms of these auto-loans are also brought into normal audit practices. With extremely high charge of Insurance premiums this seems to be discouraging cost for consumers and a retardant for any future demand increase", Hashmi observed.
With the tractor companies claiming 85 percent plus deletion and the new motorcycle plants mushrooming due to the low cost Chinese motorcycle assemblers, we are witnessing a very high thrust of these new motorcycle plants trying to locate cheap auto parts.
Therefore established vendors are feeling the pinch, and this practice may continue if necessary safeguards are not incorporated, he said.
'All assemblers must take into consideration that with the post WTO scenario Paapam expects and hopes that everyone shall be working towards making their parts suppliers stronger and efficient with continues business lines', he added.
There is an urgent need to set up an alternative system with the various Government organs aligned to not only effectively safeguard Pakistan's domestic industry but also keeping itself abreast of its international commitments. Our exports are hovering under US $25 million for the last two years with no sign of increase, as the government seems not to understand this sector and its potential.
Pakistan's auto parts market seems like a dream to many people. With our commercial tariff of auto parts at 25 percent and CBR as usual looking the other way, auto parts imports are flooding our markets to the utter dismay of the local industry.
This unhealthy import tariffs of auto parts are cutting hard into our businesses, he added.
According to him, the year 2004 will also be a strong demand year. However, the association with its new working structure is strongly committed to bringing a high degree of awareness amongst its members on the issue of making their managements stronger, development of new components quicker and their quality the best.
The Association is also working towards new interactions with international auto parts and auto sector associations so that our members may very easily join up with potential companies willing to go into joint venture projects.
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