Japanese brand four-wheel manufacturers have established their monopoly in Pakistan and are earning unusual profit, leaving people with no choice but to buy the same brands. The government should invite European car manufacturing companies to invest in this vital sector which has been witnessing persistent growth for the last many years.
Former chairman Pakistan Auto-parts and Accessories Manufacturing Association (PAAPAM), Syed Nabeel Hashmi stated this talking to Business Recorder. The European companies could avail the opportunity of investment in an environment provided by the present government, which would not only create competition among the car manufacturers but also ensure availability of quality cars with low price.
He said that imported used cars could not find place in the local market because of parts availability issue, due to which used car import has declined. The public perception has totally changed and they have started preferring locally made cars, he added.
He, however, admitted that the import of used cars helped reduce premium on locally manufactured/assembled cars substantially and it could be further minimised if production is increased. He urged the car manufacturers to enhance their production capacity, particularly of 800cc, which is mainly demanded by the middle class. Giving example of motorcycle industry, he said that the Chinese motorcycles successfully forced the Japanese brand to reduce prices besides expanding the industry's network.
Similarly, if European companies enter Pakistan, there would be an environment of competition, which would ultimately benefit the consumers besides fetching revenue to the government. Hyundai car, having small share in the market, could not force the Japanese brand manufacturers to reduce prices, he maintained.
Hashmi further criticised the government policy for allowing import of used auto parts. He revealed that the permission to import used auto parts was being misused as brand new parts, coated with grease were being imported in connivance with the Customs staff and it was causing huge loss to the national exchequer. If the government wants to make Pakistan an Asian tiger, then it must ban the import of used parts and old machinery.