Non-availability of metal sheets hits auto industry

OUR STAFF REPORTER KARACHI - The non-availability of quality metal sheets used in the manufacturing of locally-made cars is increasing the production cost of the cars as the local Original Equipment Manufacturers (OEMs) import the metal sheets from Japan mostly. According to sources, the local OEMs are compelled to import the metal sheets at higher prices from Japan as locally produce metal sheets does not meet the required quality and specifications for manufacturing of cars. Importing any commodity always costs higher than the commodity produced locally and in the current scenario when the value of Pakistani rupee is rapidly depreciating, it is adding to the woes of OEMs as their input cost is going up and up, they added. Sources said that prices of major metals have gone up by 60 per cent on average from 2009 till May 2011, clearly indicating that the input cost has risen and causing the financial losses to the local automakers. The sources shared the statistics that during the last couple of years in the international market, the rate of steel has increased by 27 percent from $586 to $746 per ton while the rates of polypropylene, aluminium, copper and lead have increased by 67, 35, 24 and 45 percent respectively. Moreover, the rate of US dollar has increased by 5.19 per cent against the rupee from June 2009 till May 2011 while the rupee has depreciated 25.2 per cent per cent against Japanese Yen during the same period, increasing the cost of imported parts including metal sheets used in locally made vehicles, they added. They said that metals are the major input in the production of vehicles and they are imported against Japanese Yen and US dollars. Local auto industry is not only fighting against the unfavourable policies formulated by the government but it is also striving hard for its survival in the atmosphere where input cost escalates every now and then and squeezes the breathing space for the local automakers, sources.

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