Entry of new player: Two out of 100 bike makers invited for consultation

Industry asks government to take its representatives on board.

KARACHI:

Perturbed by the possible entry of a new motorcycle manufacturer with ‘unfair’ incentives, the automobile industry has asked the government to take them on board and hold meaningful dialogue before drawing up new policies.

Speaking to select journalists here on Saturday, Pakistan Automotive Manufacturers Association (Pama) Director General Abdul Waheed stressed that the government should not allow any new two-wheeler manufacturing company into the local market with relaxation in import duty. “This will be unfair as it will hurt existing players of the industry,” he said.

Waheed said the Economic Coordination Committee (ECC) of the cabinet did not follow directives of finance minister, who called for consulting the motorcycle industry on the proposal to grant extraordinary concessions to an upcoming Japanese company. The ECC only met the formality and ignored the directives, he commented.

He, however, praised the finance minister for asking the committee as well as officials to address concerns of the domestic industry. Waheed termed it unfair to invite only two bike manufacturers for negotiations out of the entire industry, which comprises around 100 manufacturers. “It is certainly not possible to invite 100 manufacturers, but their representative body should be consulted.”

So far, the consultation process had been eyewash and was apparently meant to justify what had already been decided behind closed doors, he remarked.

Waheed said the motorcycle industry had flourished and qualified to become an integral part of the economy with thousands of skilled workers. The ECC should involve stakeholders of this billion-dollar industry for consistent development instead of taking unilateral decisions that will lead nowhere, he suggested.

He acknowledged that efforts should be made to attract foreign investment, but said the fundamental concept of level-playing field for existing and new players should not be ignored. “Pama just requests the government not to offer any duty concession to a single player.”

Pakistan is among 20 top motorcycle manufacturing countries, producing two-wheelers of international standards from 70cc to 150cc engine capacity. The industry’s installed capacity was 2.5 million bikes in 2011-12 and sales stood at 1.6 million in the same period, with capacity utilisation at 64%.

Published in The Express Tribune, September 9^th, 2012.