IMCL production capacity likely to improve this month

Production capacity of Indus Motor Company Limited (IMCL), which had gone down to 60 percent in April, 2011 as a result of devastation caused by tsunami in Japan is likely to improve during the current month, said Raza Ansari, Director, Marketing Division, IMCL, in an exclusive interview to Business Recorder, here on Wednesday.
He said the supply chain of 100 odd components was disturbed because of natural calamity in Japan, which had resulted in a steep decline in the production capacity of IMCL by 40 percent in April. Now the situation is gradually moving towards normalcy and the production capacity of IMCL is expected to improve in May as compared to last month.
He said the Auto Industry Development Plan (AIDP), drafted in 2006, had projected the market volume to 200,000 in 2010 and 500,000 in 2012. Contrary to the said volume projection, the industry is anticipating to close during the current financial year to 160,000 level, despite having 350,000 market volume.
Raza further said the market capacity could only be improved, if the authority concerned took serious measures to improve micro-economy besides encouraging banks to revisit its auto-financing policies, which was a key driver for auto industry. To a question, he dispelled the impression of upward trend in product prices, saying that the Indus Motors had increased the cost of its products by 2.5 percent during the last two years mainly due to currency deprecation.
He said the government should plug revenue leakages instead of increasing taxes or impose new-ones to meet its expenditures, adding that the industry was in favour of Reformed GST as it would create positive impact on the business, if the same was imposed in right manner.
Although the implementation of Euro-2 policy is supported by the industry, the same is required product modification, which will increase the cost of vehicle by Rs 40,000 to Rs 50,000. Therefore, Pakistan Automobile Manufacturers Association (PAMA) has suggested to the authorities to grant tax exemptions on the imports of relevant parts to minimise conversion cost. He said PAMA had further recommended to the government to let the tariffs remain unchanged in coming budget besides drafting stable and long-term policies pertaining to the import of recondition vehicles and new entrants.