KARACHI: The Pakistan Automotive Manufacturers (PAMA) and the Pakistan Association of Automotive Parts and Accessories (PAAPAM) have expressed concerns regarding the current situation faced by the automobile industry in the country. The two organizations have jointly submitted a letter to the Governor of the State Bank of Pakistan, highlighting the importance of the automobile industry to the country’s economy.
According to the letter, the automobile industry is the second highest contributor of tax revenue to the Federal Board of Revenue (FBR) and represents over 20% of Pakistan’s manufacturing sector. The industry has achieved 80% import substitution, saving millions in foreign exchange annually. The automobile and auto parts industries have created two million jobs in various segments of the economy.
The letter said that the auto industry is facing extinction due to restrictions imposed by the State Bank of Pakistan (SBP) and the lack of cooperation from banks, causing factories to shut down intermittently and leading to massive unemployment, loss of government revenues, and flight of capital.
The letter said that direct and indirect controls imposed on the opening of import LCs are the prime cause of the above industrial breakdown and added that the industry would subsist at a minimum 50% capacity.
However, due to the severe paucity of foreign exchange, the supply of CKDs/raw materials is severely impaired and the industry is in a state of paralysis.
The PAMA and PAAPAM requested an urgent appointment with the Governor of the SBP to submit their proposals and find a feasible plan to save the vital automobile industry. The organizations believe that immediate measures are required to protect the industry, which is an essential contributor to the country’s economy.
It also highlighted the significance of the automobile industry to the country’s economy and the current challenges faced by the industry.
Copyright Business Recorder, 2023
Comments
Comments are closed.