Parts makers oppose used tractor imports

Say decision will drain forex reserves, hurt local engineering industry


Our Correspondent January 22, 2023
A REUTERS FILE IMAGE

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LAHORE:

Auto parts manufacturers have rejected the Economic Coordination Committee’s decision to import second-hand tractors, terming it ill-advised and dangerous, as it will deal a blow to the engineering industry of Pakistan.

In a statement on Saturday, Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) Chairman Munir K Bana, Senior Vice Chairman Usman Aslam Malik and Vice Chairman Taufiq Sherwani disapproved of the government’s decision about import of used tractors, regretting that the auto industry was under attack from all quarters.

On the one hand, the government was not allowing import of raw material, citing the shrinking foreign currency reserves, while on the other hand, it was planning to drain the reserves with the import of used tractors, they pointed out.

“Paapam members are looking forward to making innovations and taking initiatives to revive the tractor industry, however, the import decision has come as a shock,” the statement quoted the association leaders as saying.

They voiced fear that if the import of used tractors began, over a million workers would lose their jobs as the tractor manufacturing industry had already been partially shut.

Around 300 small and medium enterprises, which were manufacturing tractor parts, are currently closed amid insignificant demand and working capital crunch due to the delay in sales tax refunds by the Federal Board of Revenue.

“Pakistan produces the cheapest tractors; import of used tractors will not benefit farmers as they will have to pay high prices,” elaborated Bana.

At present, there are no supply constraints as the industry is running far below its production capacity owing to the economic downturn. Besides, the closure of two leading tractor manufacturers in the wake of slack demand has impacted hundreds of parts makers, who were earlier supplying kits to them.

Paapam leaders pointed out that neither mechanics nor spare parts for imported tractors would be available locally, adding that used tractors would also hit the fuel cost borne by farmers as the old machines were not expected to be fuel efficient.

They urged the government to withdraw its decision as it would be disastrous for the already ailing tractor industry. Consequently, the domestic manufacturers will continue to struggle and will not be able to survive.

Published in The Express Tribune, January 22nd, 2023.

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