KARACHI - General Engineering Chief Executive Arshad Awan in his statement said that he has failed to understand the logic of government’s nod to allow a new foreign entrant at the concessions of zero duties despite the fact that domestic motorcycle industry maintained robust growth even during the last five years of recession.

Undue concession to the new entrant will ruin the local vending industry, which is already under pressure to absorb the impact of free trade with India. He was of the opinion that naturally concessions are granted if there is a shortage of locally manufactured products or if any innovative technology is offered by a foreign investor, but in the case of new entrant nothing is happening.

‘This will open a Pandora box and many other unsuccessful foreign motorcycle brands would close their operations to reenter in the local market,’ he said, adding that this concession is a sheer injustice to more than 60 local investors that have introduced Chinese origin brands in last five years without taking any concessions from the government. It may be noted here that out of total 92 motorcycle manufacturers 62 entered the market in just last five years, which shows there is regular investment in this sector without any government concession.

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 He further said that over 90pc parts of motorcycles are being produced in Pakistan by hundreds of auto vendors, while they also have started exporting. It is expected that the exports of 25,000 locally made motorcycles will be witnessed this fiscal, which is double against the last year’s exports.

Therefore, the government should first evaluate whether the domestic industry is adequately protected or not,’ he argued. Any new entrant for high-tech products may be allowed with some duty concession in import of completely knocked down units (CKDs) but it should not be zero because it would be unfair to those entrants that introduced high tech Italian and Japanese motorcycles without any concession recently, he added. Also, he stressed, there should be no concession to the new entrant if it wants to assemble 50cc motorcycles produced by over 80 existing players in Pakistan.

On the other hand, the Director General Pakistan Automotive Manufacturers’ Association (PAMA) Abdul Waheed strongly condemned new entrant in the market with zero duty concession and said that the investment offer of $150m in ten years is a gimmick. He ruled out the impression that local bike-makers are heavily dependent on the imports of spare parts because with 90pc localisation manufacturers are producing around 1.4 million units per annum.

DG PAMA urged that new entrant bike manufacturer must not be considered as new entrant because company has done its business in Pakistan for 35 years and sold out its shares to local assemblers manufacturing bikes with same designs and brand.

‘The new entrant bike-maker in no way can be considered as new entrant therefore it should not be allowed any concession at Customs level on the imports of machinery and spare parts of motorcycle at zero duty,’ he added.