The local automakers have cut their production capacity to almost half as imported used cars have slashed the sales of locally made cars, according to industry sources here. The current scenario of local auto industry poses no optimism in view of clear indications that the government may not be able to achieve its goals or targets set in the Automotive Industry Development Program (AIDP) which ends in June 2012.
Industry sources said that auto industry in the country continues to be targeted by vested interests and its future seems to be bleak as the government has no concrete development plans for the industry after the AIDP ends without achieving its goals.
They expressed dismay over the inefficiency and ignorance of government institutions that have done nothing in formulating new program for the development, or even implementation, of the much trumpeted policies made and approved after spending lot of national exchequer money and man-hours. The Ministry of Industries and Production (MoI&P) had finalised a plan in 2006 for the development of local auto manufacturing sector, ie Automotive Industry Development Program - AIDP - in which government authorities had pledged to work for promoting local auto industry and adopt policies favouring sales of locally made cars.
The target of selling 500,000 locally made cars per annum was set and simultaneously it was decided to make the local auto industry able to contribute 5.6 percent in national revenue collection by 2012. AIDP objectives were to encourage long-term investment, local industry's growth, domestic competition, innovation, further indigenisation, facilitation of industry's integration with global supply chain as well as to regulate used vehicles' import policy in a manner that growth and sales of local industry are not hampered.
Industry sources said that instead of encouraging growth of local auto industry and other objectives mentioned in the AIDP, the government is facilitating vested interests to import five-year old used vehicles at the cost of heavy losses in foreign exchange and revenue collection besides undoing the efforts of the local auto manufacturers in the form of heavy investments in their plants and generation of employment for thousands of local population not only at their plants but associated vending industry as well.
They criticised the current policy of the government to allow two years' more relaxation in the import of used vehicles, which gives the impression that the government has forgotten its commitment made in AIDP and it has no interest to stabilise local automakers.
Local auto sector is currently contributing 3 percent in national kitty in spite of substantial decline in local industry's growth and formulation of hostile policies against automakers as the government has allowed import of five-year old used vehicles under personal baggage and gift scheme, but the policy is being abused by the trader mafia and they are making profits by importing junk into the country.
Industry sources urged the government to formulate policies favouring the industrial economy rather than making Pakistan a trading economy otherwise, if government formulates another program for the development of local industrial base but contradicts it with its hostile policies and does not implement it in letter and spirit, the next development program would also prove to be a failure like AIDP, and the repercussions would be far worse than now.
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