The losses of local automotive industry in the past five months exceeded Rs 15 billion due to low sales, according to Chairman, Pakistan Automotive Manufacturers Association (PAMA), Parvez Ghias. Appearing highly disturbed and unhappy over government's wayward policy towards auto industry he questioned: "the people of this country and the policy-makers must decide once and for all if we should be a trading or a manufacturing nation. We should step back for a moment and think what serves our national interest both in short and long term?"
Commenting on recent comment by FBR on tax loss, Ghias said: "It's ironic how the Federal Board of Revenue (FBR) conveniently did not state the amount of tax losses to the Government of Pakistan (GoP) suffered due to low sales by the local auto industry in past five months which exceeds Rs 15 billion. God forbid, if the situation persists for next six months then GoP will lose to the tune of Rs 28 to 30 billion approximately."
Local industry uses only one third of the precious foreign exchange compared to that used on imported cars. "So I ask all policy-makers and politicians to tell the nation how is used car imports in Pakistan's interest? Why are we getting into this debate when the facts are so clear? " In the past five months, local auto industry has suffered around 35 percent decline in their sales volume primarily because of influx of used imported cars, he said.
Parvez Ghias said, "With a population of over 180 million, the biggest problem for Pakistan and the decision-makers is to provide enough employment opportunities to masses so that people could become productive members of society rather than indulging in criminal activities and creating law and order situation."
The local auto industry helps government in a big way by creating over 2.2 million jobs directly or indirectly. There is a reason why auto industry is considered mother of all industry and all developing nations protect their industry. Take any regional country like India, Thailand or Brazil, all of them protect their local industry as they know it's critical for their national interest but we are the only country unfortunately which gives rebate on used car imports at the cost of local industry, he said.
Discussing pricing of locally produced cars, Chairman, PAMA said that cars produced in Pakistan are amongst the cheapest in the world and anyone could compare the price of locally produced corolla and civic to any country in the world like with India, Thailand, USA, UK; as its free information available on the internet. He said if you net-off taxes and duty, cars being produced in Pakistan are the cheapest in the world. You compare it. Whereas the cheapest used car is at least 40 percent higher in prices than a local car.
Commenting on localisation, Ghias said that Industry has already localised lot of parts which makes economic sense and the journey continues as our volumes grow. No country in the world produces 100 percent cars locally as it defies the concept of comparative advantage. Even country like India imports CKD kits to manufacture vehicles.
"We as a nation should think decisively as to in which direction we want to go as it's very easy for local industry to stop manufacturing and start trading but what will happen to all those people who are employed. What will happen to our import bill and trade deficit? We as a nation are already struggling and whatever capacity the industry has developed so far will get wasted if we head towards wrong direction," he said.
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