Auto lobby overjoyed at ECC decision on car imports

Say cut in age limit will rejuvenate local industry.

LAHORE: The Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has welcomed the Economic Coordination Committee’s (ECC’s) decision to bring down the age limit of imported used cars from five to three years to support the local industry.

PAAPAM Chairman Munir Bana and Vice Chairman Usman Malik, in a joint statement issued on Friday, said the decision will go a long way in stimulating the growth of the domestic industry and the flagging economy.

“The deputy prime minister firmly believed that the jobs of two million auto industry workers must be saved.  At PAAPAM’s last annual function, he personally made a commitment to raise his voice against the import of used cars in the interests of the domestic industry,” Bana said.

PAAPAM’s chairman was also grateful that the deputy prime minister had also reduced the general sales tax on tractors from 17% to 5% last year, helping revive the tractor industry and its allied auto parts manufacturing units.

Bana said the auto industry was facing a steep decline in production, and car assemblers and auto parts manufacturing units had retrenched thousands of workers because of the continuing imports of used cars.

Vice Chairman Malik added that in order to protect labour directly or indirectly associated with the automotive industry and to encourage foreign investment, it was essential to provide fair protection to the local industry. He further said that during 2001-2007, with the help of stable government policies, the automobile industry went through a period of tremendous expansion: with investments of over Rs40 billion and increase in volumes of over 500%.

These developments made the auto industry one of the top five industrial sectors of the country in terms of contribution to tax revenue, acquisition of hi-tech manufacturing technologies and generation of employment, he claimed. Unfortunately, due to the import of used vehicles and other adverse policy factors, our industry is now suffering from excess capacity, he added.

Published in The Express Tribune, November 24^th, 2012.