Auto industry frustrated at policy delay

PAAPAM chief expresses concern, seeks its early finalisation.

LAHORE:

Expressing concerns over the delay in the announcement of the new Auto Industry Plan (AIP) despite a host of meetings, the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) has said that the lingering policy has blocked all activity and hindered investment in the industry.

While Paapam Chairman Usman Malik appreciated involving all stakeholders, he said that the Economic Coordination Committee (ECC) had failed to finalise the AIP despite meeting in October. The ECC had set up the committee last year and decided on a 45-day period for its finalisation.

Malik said that Paapam wanted a policy that would help strategise the exports of auto parts and vehicles in addition to growth of the industry domestically.

Pakistan’s auto industry is currently small but so is the market. The country’s population has quadrupled over the past five decades to 180 million, but car ownership stood at just 12.6 per 1,000 inhabitants in 2013, and is unlikely expand rapidly in the near future.



Domestic production, which consists of local assembly of vehicles from imported parts and kits, has a capacity to produce 250,000 vehicles per year. In fiscal 2013 that was more than enough to supply a market with domestic sales of just 180,000 vehicles, down nearly one quarter on a year-on-year basis.

The PAAPAM chief said that government has already been asked to give at least four to five years to the domestic industry before phasing out the negative trade list with India. 

Published in The Express Tribune, January 26^th, 2014.

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