LAHORE  - Showing grave concern over delay in announcement of the new Auto Industry Plan despite a host of meetings, the automotive parts manufacturers have said that the lingering policy has blocked all activities and new investment in auto industry.

They appreciated the government for taking all the stakeholders on board to finalize the policy draft, as all auto-sector related bodies had submitted their proposals to the government.

Earlier, policies in the country were made behind the closed doors without consulting the actual stakeholders, they said. However, they lamented that the Economic Coordination Committee had set up a committee in Oct 2913 tasking it to finalize the AIP draft within 45 days, but no progress was made in this regard. He stated that all meetings, held in October and November 2013 with senior government officials on the AIP issue, failed to deliver any results.

They said that auto sector wants an auto policy to be formed in a way to strategize export of auto parts and vehicles in addition to growth of auto industry domestically.

Pakistan’s auto industry is currently very small and so too is the market. The country’s population has quadrupled over the past five decades, to 180m, 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 capacity of only 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.

They said that the five-year auto industry policy should provide level-playing field for all the auto manufacturers in the country. He said the government should provide incentives to the car manufacturing industry so that they could enhance capacity utilization with the objective to decrease its cost of production.

PAAPAM chairman Usman Malik strongly urged the government not to indulge in any policy changes for an industry that has being an excellent example of localization and growth over the last five years in spite of the countries worsening economic and law & order situation. He said that it seems that the policy makers have no confidence on the local industry that grew by 37 percent on average during last ten years with the investment of billions of rupees in the country.

He said that the local industry has already absorbed shocks of power shortage, inflation and increase in cost of doing business.

Malik said his association has repeatedly requested the government to rescind or at least review fixed duty and taxes rates in SRO 577 but to no avail.

He further said the rates fixed in $ term in SRO 577 back in year 2005 are very low, thus giving an undue advantage to used car traders at the cost of local industry and resulting in significant loss of revenue to the government to $7,337 on import of used cars.