It is said that economic development of any country stems from the engineering goods industry. This industry provides volumes to the manufacturers which enable investors to invest in modern manufacturing techniques, quality equipment and management practices.
The volumes provided by the automobile industry help industrial units in achieving viability and profitability.
The improved financial health of these units prompt to undertake manufacturing of other engineering goods. Thus the other sector like defence etc also tend to benefit out of technology and management techniques primarily acquired from the principles for manufacturing.
In this country it was the tractor industry which led the way and created a sound vending industrial base and the corresponding infrastructure needed to support supply chain.
The vending industry developed by tractor industry acted as the technology base for manufacturing of automotive components and defence needs.
The tractor industry has about 250 industrial units supplying components. These units include large manufacture like Pakistan Machine Tool Factory, Bolan Castings, General Tyres and Heavy Mechanical Complex down to small garage size outfits.
Over 100,000 people are directly or indirectly employed while a much larger figure is involved in the supply of raw materials, transportation, workshop services etc.
The local tractor industry has since crossed the take-off stage and developed a wide range of tractors suitable for our conditions and as prevalent in other developing countries.
These tractors are sturdy, easy to operate and easy to repair. A very high local content of upto 90 percent has been achieved in most popular 50 horsepower tractors while it ranges between 60 to 75 in other models of tractors. The high tech components like engine block and head including their castings have been localised.
The tractor and automobile industry has increased their capacities during last few years by investing in machining, quality equipment and human resource. This sector has seen some very tough periods when volumes were down and policies very unfavourable.
The local industry was hurt due to duty and tax free imports in the name of Awami Tractor and Yellow Cab schemes, while local tractor production was laden with additional duties and taxes. By the grace of God, the present policies and economic environment has resulted in increased volumes for the industry.
It is unfortunate that there are lobbies who try to pull the industry down the moment it tries to raise its head. They have again become active and lobbying to change government policies in favour of traders.
Over the years, the tractor industry has matured in terms of quality and capacity.
The current capacity of about 50,000 tractors per year is sufficient to cater for the needs of the country.
This capacity was created through huge investments by the tractor manufacturers as well as hundreds of vendors. Unfortunately this capacity could never be utilised to maximum due to indifferent government policies. In mid nineties the industry was completely crippled by allowing import of tractors free of custom duty, sales tax and income tax.
On the contrary the "Made in Pakistan" tractors were subjected to twenty percent duty and eighteen percent sales tax.
It was only after nuclear detonation that government decided to develop agricultural sector and exempted locally produced tractors of import duty on materials and sales tax on tractors.
During last five years the annual production of tractors has ranged between 28,000 and 30,000.
This year, Insha-Allah this would be raised above 36,000 units, thereby significantly contributing towards government endeavours to promote agriculture sector.
This sector is now fully geared up to face challenges expected as a result of WTO and SAFTA. As a matter of fact, the free trade regime is eagerly awaited which will provide an access to bigger markets. Highly competitive prices of Pakistan tractors coupled with international quality standards are two of the fundamental reasons for being confident to take WTO and SAFTA as an opportunity rather than a threat.
This could only be achieved as a result of high volumes during last few years which has encouraged local manufacturers to make investments, to improve quality, productivity and competitiveness in the international market.
To have an idea about prevailing prices of tractors in Pakistan and India, the following comparison between Massey Ferguson Tractors produced in Pakistan can be seen.
COMPARISON OF TRACTOR PRICES PAKISTAN VS INDIA: A large number of tractors being produced in Pakistan are being exported by trading houses to African Countries, Bangladesh and Sri Lanka competing against import from other countries including West Europe and America and already created a base for Pakistan manufactured tractors once the free-trade regime becomes a reality.
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Pakistan India
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Horse Price - Ex Factory Horse Price - Ex Factory
Make Model Power Rs US$ Make Model Power Rs US$
Conversion Conversion
rate rate
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57.37 57.37
40 - 50 H.P Range: 40 - 50 H.P Range:
Massey
Ferguson MF-240 50 320,000 5,586 TAFE MF-5245 50 352,790 6,149
Mahan
4410 44 376,688 6,566
Samrat
Fiat 480 50 320,000 5,586 Escort 440 40 310,753 5,417
355 47 304,828 5,313
FT-60 50 398,745 6,950
Universal U-530 53 305,000 5,324 M & M 475DI 40 307,976 5,368
U-530 plus 53 317,000 5,534 575DI 45 334,490 5,830
GTCL HWD50DI 50 362,476 6,318
60 H.P: 60 H.P:
Massey
Ferguson MF260 60 399,000 6,965 HMT 5911 58 388,103 6,765
TAFE 5900DI 60 441865 7,702
Gajraj
GTCL G614-DI 61 371,529 6,476
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