Tractor parts makers on verge of bankruptcy

Seek govt intervention to avert slump in industry


Our Correspondent December 06, 2022

LAHORE:

Automotive parts and accessories manufacturers have expressed concern over the drop in production of tractor parts and sought government’s intervention to prevent a hit to tractor sales.

Recent heavy floods, hyperinflation, dollar’s unprecedented appreciation, import restrictions on auto parts and political uncertainty have severely affected the tractor parts industry, which is facing a massive fall in production.

In a meeting of the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam), the tractor parts manufacturers voiced concern over the slump in tractor industry as the two largest assemblers were struggling to cope with a significant drop in orders, unwarranted investigations by the Federal Board of Revenue and delay in sales tax refunds.

Around 300 parts makers were largely dependent on sales of the two leading tractor manufacturers, Millat Tractors and Al-Ghazi Tractors, and the delay in payments and a sharp decline in orders had taken the parts industry on the verge of bankruptcy.

Sales of tractors for the rice and cotton seasons have not taken place in southern Punjab and Sindh, which have faced the brunt of massive floods. Therefore, “sales of tractors during this financial year will barely touch 20,000 units as compared to 60,000 units last year,” a statement quoted Paapam office-bearers as saying.

They were of the view that several steps must be taken to help the industry. These include long-term loans at low mark-up for the purchase of tractors by farmers, release of old sales tax refund claims and focus on export of tractors to Africa.

Published in The Express Tribune, December 6th, 2022.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

COMMENTS

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ

Most Read