Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has urged the government to progressively open overall trade with India after experiencing the progress at each mile stone.
A spokesman of PAAPAM told Business Recorder that that PAAPAM had made intensive consultations amongst its 350 members, being vendors of parts and components for passenger cars, motorcycles, tractors, trucks and buses in Pakistan and submitted its recommendations to the Commerce Ministry in view of upcoming round of talks between Pakistan, India for liberalising bilateral trade of automotive parts.
PAAPAM proposed that, in the first phase, trade with India might be enlarged to allow for import of raw material, machinery and equipment, tools, consumables and technology as well as joint ventures. This will improve the competitiveness of our industry and after some years trade may be further enlarged in the area of automotive parts.
PAAPAM warned that if trade in auto-parts is opened up with India, it is likely that the Indian manufacturers, using their domestic volume advantage, may dump their products into Pakistan at marginal costing. This would cause irreparable damage to our local industry, which is already suffering from rising cost of production, shortage of electricity, political/economic uncertainty and devastating law and order situation.
They pointed out that Pakistani vendors, despite the relatively low volumes of vehicle manufacturing as compared to India, have developed unique capabilities in almost all engineering/automotive technologies through massive investments over the last 15 years. As a result, below is the level of use of locally produced parts in various sub-sectors of the Pakistan Auto Industry:.Passenger Cars & LCV - below 1000cc: 70 percent b. Passenger Cars & LCV-1000cc and above: 55 percent~60 percent c Motorcycles: 85 percent~90 percent d. Tractors: 85 percent truck/buses 40 percent to 45 percent.
PAAPQM said despite the various disadvantages with respect to lower volumes as well as rising cost of doing business in Pakistan, the vendors have been able to produce high quality parts approved by the global OEMs operating in Pakistan. At the same time, the cost of local parts is highly competitive, due to which the prices of vehicles in Pakistan (net of taxes) are lower or comparable with those in India and China.
The facilities that have been set up by Pakistani vendors are of global standards. Most of the vendors are certified under ISO 9001, QS 9000 and TS 16949 Standards and meet the test criteria requirements under Japanese Inspection Standards (JIS). The investments that have been made by vendors are mainly in the areas of sheet metal pressing, forging, plastic injection & blow molding, rubber molding and extrusion, steel and aluminium castings etc.
Currently, there is a long list of parts that are being locally manufactured. To name a few: plastic bumpers, grills, instrument panels, seats, steering wheels, tyres, wheel rims, carpets, seatbelts, rubber seals, airconditioners, wiring harnesses, radiators, steel floor, complete doors, side view mirrors, sun visors, mufflers, motorcycle & tractor engine parts, forging & casting parts and so on.
The industry is fully documented and is one of the top 5 contributors to the national exchequer. It creates employment for over 200,000 skilled workers and has been able to attract foreign investment and technology transfers from leading Global Vehicles manufacturers such as Suzuki, Toyota, Honda, Hyundai for passenger cars; Honda, Suzuki & Yamaha for Motorcycles; Massey Ferguson, Fiat and John Deer for Tractors; and Hino, Nissan, Isuzu, Daewoo and FAW for heavy vehicles.