Pakistan Association of Automotive Parts Accessories Manufacturers (PAAPAM) said on Monday that it welcomes new entrants in the auto sector but not "briefcase assemblers." Well informed sources told Business Recorder that the term 'briefcase assemblers' coined by PAAPAM, has irritated both the Ministry of Industries and Engineering Development Board (EDB).
"Both the Ministry and EDB have sent a very strong message to PAAPAM Chairman who was supposed to be very close to them," the sources added. Unconfirmed reports suggest that Chairman PAAPAM telephoned Secretary Industries to clarify his position on use of "briefcase assemblers" term but the Secretary refused to take his call. The same situation, sources said, has been witnessed in the EDB, headed by a car importer Aitzaz Niazi.
Clarifying the position of his Association, Chairman PAAPAM, Syed Nabeel Hashmi said that the notification pertaining to new entrant policy issued by the Ministry of Industries is a formality which was required to give legal cover to the Auto Industry Investment Policy (AIIP) prepared with the consensus of auto industry stakeholders and approved by the ECC on November 13, 2007.
Hashmi maintained that the notification should actually have been issued in November 2007 along with the launch of Auto Industry Development Plan (AIDP). Hence the retrospective effect given to the notification is fully understandable. "PAAPAM has had numerous meetings with the MoI and Engineering Board (EDB) during the last six months and continuously supported GoP's initiative to invite new entrants on a pattern similar to what has been observed in the country's 2-wheeler sector," he said.
Hashmi maintained that PAAPAM's view has consistently been to deter entry of "briefcase assemblers." He expressed the hope that, with the requirement, in the notification, of submission of "business plan"/"intention to localise" by new entrants to the MoI/EDB, "briefcase assemblers" will not be able to get approval as new entrants. Hashmi was appreciative that the notification has given the authority for final approval of new entrants to the AIDC, which contains representation from all industry stakeholders, including PAMA and PAAPAM.