LAHORE: Chairman of the Pakistan Association of Auto Parts & Accessories Manufacturers (PAAPAM) Munir Bana has said that the recent heavy floods, hyperinflation, dollar’s unprecedented appreciation, import restrictions on auto parts, and political uncertainty have severely affected the local tractor parts industry, which is facing a massive drop in production during the current financial year.
In a hurriedly called meeting of the association held here on Monday, he expressed deep concern at the major dip in tractor sales, as both tractor assemblers were struggling with the drop in their orders, FBR investigations, and delay in refunds of sales tax refunds running into billions of rupees.
This foggy scenario was considered most precarious by the 300 part-makers, who are dependent on sales turnover of Millat Tractors and Al-Ghazi Tractors. Delays in payments and sharp decline in orders have left the parts industry in a bankruptcy situation, with no improvement in sight.
The sales of tractors for the rice and cotton season have also not taken place in Southern Punjab and Sindh, which faced the brunt of massive floods in the country. Therefore, sales of tractors during this financial year will barely touch 20,000 units as compared to 60,000 units sold last year.
PAAPAM’s key office-bearers, Chairman Munir Bana and Senior Vice Chairman, Usman Malik, presided over the meeting, which was also attended by former chairmen, Mumshad All and Razzaq Gauhar, as well as former SVC Irfan Qureshi, EC member Omer Abdullah, and members of Tractor Committee, Javaid Hafeez, Shahid Dad and Moin Bajwa.
The PAAPAM was of the view that several steps would have to be taken by the assemblers and government to jump-start tractor sales, mainly long-term loans at low markup to farmers for procuring tractors, release of old sales tax refunds to assemblers to improve their liquidity and focus on export of tractors to Africa. If these actions are not taken, the 300 engineering SMEs involved in tractor parts production will close down in a matter of months.
The chairman PAAPAM stated that the government’s latest policy of allowing duty-free imports of second-hand tractors would be the last nail in the tractor industry’s coffin. This policy would prove a disaster for the tractor industries and its parts makers, resulting in massive unemployment in the country.
The Senior Vice Chairman, Usman Aslam Malik said the gravity of the situation demanded that MOI, EDB, and MOF immediately take stock of the problem to save the employment of millions of families and possible food insecurity in Pakistan.
Copyright Business Recorder, 2022
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