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ISLAMABAD: Auto manufacturers have sought intervention of the State Bank of Pakistan (SBP) for opening Letters of Credit (LCs) for the import of Completely Knocked Down (CKD) kits to avoid delays in car deliveries and further cost escalation.

During the briefing to members Public Accounts Committee (PAC) on Thursday, representatives of auto manufacturers (Indus, Honda, Suzuki) said their plants are running at 1/3 capacity so delays in car deliveries are imminent because of the non-availability of US dollars since May 31, 2022.

The companies have already issued notifications informing customers about delays in car deliveries that are being caused by issues pertaining to obtaining as well as a global shortage of semiconductor LCs for the import of CKD kits chips.

Indus Motor Company Chief Executive Officer (CEO) Ali Asghar Jamali asked the chairman committee to direct the SBP to provide them US dollars for obtaining LCs. He said the company had opened the last LC at Rs240 per US dollar.

Vice President Honda Atlas Cars Maqsood ur Rehman Rehmani told Business Recorder that the company was running on two shifts but delay in the import of auto parts was causing delay and affected company business that was running on 2.5 percent profit margin. Despite low production of cars, the company is paying three percent over the Kibor rate.

Earlier, the committee expressed its displeasure over the Ministry of Industries and Production and its subsidiary, the Engineering Development Board (EDB), over failure to control car pricing, implementing safety features in various brands, and transfer of technology.

Additional Secretary Industries said that the market determines the price of cars as there is no price control policy of the government.

Noor Alam Khan directed the PAC Secretariat to write letters to the Prime Minister, Special Assistant to PM, the Establishment Division over the poor performance of the ministry in addressing the public grievances against auto manufacturers.

At one point, the Chairman Committee remarked, “If auto manufacturers have no capacity to deliver vehicles on time then they should not book cars and the government should allow import for additional cars to meet demand.”

The Chairman Committee also directed the Auditor General of Pakistan (AGP) to examine the accounts of car manufacturers to determine the size of the amount deposited by consumers as advance deposit.

He further directed the Federal Board of Revenue (FBR) to provide details of custom duty paid on the import of auto parts as the AGP hinted that the audit officials were of the view that fewer units were imported against the volume of import of auto parts.

Earlier, Chief Executive Officer (CEO) EDB Raza Abbas Shah and Secretary Industries said that the car manufacturers did not provide the information for audit purposes despite sending several letters and officials of the AGP also said that the manufacturers did not provide relevant record despite sending four reminders.

CEO Toyota Indus Pakistan contended that they were a public listed company and the details of accounts are available at the website.

Copyright Business Recorder, 2022

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samir sardana Jul 22, 2022 05:36pm
Option 1 - Import the Car - which needs USD & LC limits of say 20000 USD Option 2- Import the CKD Kit,which needs USD & LC limits of say 16000 USD,& will use gas & fuel for fabrication & power Option 3- Import the SKD kit,which needs USD & LC limits of say 12000 USD,& will use MORE gas & fuel (THAN OPTION 2) Option 4 - Import all that is required to make in Pakistan as much as possible,& will use MORE gas & fuel (THAN OPTION 3) Option 5 - Import all that is required to make in Pakistan as much as possible, & TAKE ADVANCES FROM BUYERS OF THE ENTIRE VARIABLE COST OF PRODUCTION & HALF OF THE FIXED COST RECOVERY ,& will use MORE gas & fuel (THAN OPTION 3) Which option will use the LEAST USD and the Least Import LC limits Option 5 ! There are many CORE sectors which need Import LC limits(Car Purchases can be deferred) Option 3 makes sense only if the PLF or Capa usage IS SO LOW that the HIGH ALLOCATED FIXED COST RECOVERY,makes Option 1 or 2 of 3 viable,.dindooohindoo
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Pakistani1 Jul 22, 2022 06:25pm
With the increasing pressure on FX reserves, Govt has rightly focused on reducing imports. Cars and cell phones consume a huge amount of foreign exchange. Government should ban import of these 2 items outright for up to 12 months to conserve precious FX.
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Haq Jul 22, 2022 06:53pm
Shut these sub-standard / junk Japanese assemblers & switch to local manufacturing of Electric Vehicles, in collaboration with Chinese, must include bulk production if solid state batteries, embedded solar panels (for charging) & charging stations. This can save precious foreign exchange & environment
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Muhammad Rizwan Jul 23, 2022 09:33am
Why not we allow used vehicles import. We can get a 2005 or 2010 model car in only 4-5 lakhs. So we were giving 2000 or 3000 $ inspite of 20000$ or more to japanese. Our local industry is looting more. Used cars option is the best to control the supply gap, price and economy
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Syed Khalid Kamal Jul 23, 2022 02:32pm
Auto Sector in Pakistan is a cry baby. They want every thing, a captive market, to serve with over priced and most inferior products at the highest prices. Their wares can't be sold anywhere in the world, they earn no foreign exchange. While their import bill last year was 1.92 billion US$. They have added no local value to their products. Their products deliver subpar performance, are unsafe at any speed and break down within warranty period. Total employment created at the assembly plant level by Suzuki, Honda and Toyota is at most 6000 jobs. We are all paying a heavy price for patriotism. Screw them let the plant close down we can all do very well with used Japanese cars. Even at the low end of the price japanese are selling fuel efficient, luxurious, hi-performance, safe and reliable cars. This will save foreign exchange, reduce our petroleum import bill. Bring in any car no age limit, safe and most efficient models only.
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HAROON Jul 24, 2022 02:20am
Toyota corolla or sporatage fwd ki booking kb open ho gi Pakistan mai
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