The State Engineering Corporation (Pvt) Limited (SEC) and Pakistan Machine-Tool Factory (Pvt) Limited (PMTFL) have strongly opposed bid to import second-hand auto parts, and approached to the Ministry of Industries and Production pleading that it should play a role to block any such move to protect them from complete disaster.
In its communiqué to the Ministry of Industries and Production, State Engineering Corporation said it was of the considered opinion that import of secondhand auto parts was a very serious issue and its would have serious repercussions on the local auto industry. It had a long list of concerns.
The Corporation said that the quality of used parts and their life would vary from item to item that might lack road safety. It pointed out that imported secondhand parts would hurt the local vendors who have been playing a key role in promoting the local auto industry and providing jobs to hundreds of thousands of families besides contributing to 15 other industries.
It referred to the contribution of local auto parts industry to revenue. The State Engineering claimed that use of imported secondhand auto parts could be extremely problematic in the long run.
It said that Pakistan has developed a sound auto vendors industry, which had shown remarkable growth during the last few years and helped OEMs to achieve higher deletion targets. It added that due to continuous increase in the demand for cars, the local vendor industry is concentrating on development of new parts. It reminded that its unit, Pakistan Machine-Tool Factory, which also deals in auto components, has geared up expanding activities for manufacturing transmission components for Pak Suzuki Motor Company, Karachi.
In case import of used parts is allowed, the plans drawn by PMTF and local vendors to expand the existing range of parts by including manufacturing of new auto parts may have to be shelved and they may consider to drop their investment plans for development of new high value-added parts.
PMTFL in its letter to the Ministry said that the matter of import of used auto parts, being examined by its committee, was of great concern to the whole auto vendor industry as it can put its heavy investment in danger.
It also approached the Pakistan Association of Automotive Parts and Accessories Manufacturers PAAMPAM with a request that it should take up the matter from its platform and approach the concerned departments/officials to resist import of used auto parts that my be of great damage to the local vendor industry.
"Since it is a matter of serious nature for the local parts manufacturers, PAAPAM has separately raised the issue at the highest level, saying that it would like to point out very clearly that all vehicles and components manufactured world-wide have a certain life cycle and span and after usage for specific period used parts are supposed to be destroyed.
PAAPAM said auto parts industry is contributing over Rs 8 billion annually to the national exchequer and its share will increase by next year if the government remained committed to its policy of ban on import of second-hand auto parts. It said that a lobby was raising the issue of import of used spare parts to grind axe but PAAPAM believes that importers grossly misuse the opportunity and indulged in massive tax evasion.
It further claim that old spare parts are imported under scrap cover as no system exists to check the make, model and age of the parts. Similarly, Pakistan has not yet developed any system to crosscheck the actual period of use of imported parts.
PAAPAM added that local parts manufacturers and assemblers were manufacturing all type of vehicles for the last 20 years and import of used parts would destroy it altogether.