The government will hold talks with local auto manufacturers on Tuesday (today) to evolve consensus on auto industry development plan that envisages 5.6 percent contribution to the GDP by 2011.
The meeting convened by the Engineering Development Board (EDB) will be attended by a 10-member delegation comprising four car assemblers, three HCV and tractor, one from motorcycle industry and two from Pakistan Automotive Manufacturing Association (Pama).
Although the government wants an atmosphere of competition by letting in the European manufacturers as new entrants, yet it could face resistance on the issue following its decision of allowing import of 100 Completely Knocked Down (CKD) kits at the rate of duty applicable to non-indigenized parts (35 per cent) to the new entrants.
Sources told Business Recorder that the tariff offered by the government was so reasonable that the Original Equipment Manufacturers (OEMs) have not been able to finalise any agenda for the meeting. It was clear during the meeting that every OEM has its own interests to watch, they added.
The meeting noted differences among major OEMs who failed to develop any consensus on their recommendations to representative body ie Pakistan Automotive Manufacturers Association (PAMA). The meeting convened on Monday in Karachi for the next day's meeting with the EDB in Islamabad ended up with out any result. It is likely that every member of the body will present his own interest and will try to protect it during the meeting with the EDB, which is unlikely to either develop or to come out with some output.
A participant, who wished not to be named said, "the OEMs have to live up with the competition. Improve their standards to survive in WTO regime and have to shun quibbling for a protected industry".
The EDB says it has given a clear long-term future roadmap to the industry being demanded by them with a five-year pre-determined tariff enabling them to carry out expansion programs.
It believes that the AIDP was outlined with the objective to expand the base of the industry which was working under high protection tariff that resulted in absence of competition, low quality, high cost, fewer models, long delivery times and poor service to the customers.
"It seems the government that has offered its optimum in the AIDP will not succumb to the industry's pressure, which up till now lived under tight protection and is afraid of facing the reality," he added.