ECC urged to consider repercussions of reducing import duty on bikes

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KARACHI: Pakistan Automotive Manufacturers Association (PAMA) has urged the Economic Coordination Committee (ECC) of the cabinet to seriously consider the drawbacks and severe repercussions of reducing import duty of motorcycles, which will virtually wipe out the engineering small and medium enterprises (SMEs) from the country.




Director General PAMA Abdul Waheed Khan said that different stakeholders of the automobile industry, including motorcycle manufacturers and vendors, will be adversely affected with the reduction of duty, resulting in influx of motorcycles made without any local contribution, rendering local auto parts vendor without business.




Pakistan Automotive Manufacturers Association members and their vendors are perturbed, he said because of continuous tinkering with policies, which have resulted in absolutely no new foreign investment for the last few years.




The proposal of the commerce ministry is not only ill-conceived but lacks objectivity. It will also promote imports, which cannot by any means promote healthy competition, Khan said. He said that competition is always encouraged within the local industry and support is always provided to local manufacturing so that the country could have its own manufacturing base. The DG said that Pakistan’s local motorcycle industry has flourished and qualified to be an integral part of the economy with thousands of skilled workers and labourers but their representatives have not been taken on board so far.




ECC should involve the stakeholders of the billion dollar industry to move further towards consistent development instead of unilateral decision that will lead nowhere but the destruction of the industry, he said.




Pakistan is among the top 20 motorcycle manufacturing countries in the world, producing quality two wheelers of international standards ranging between 70cc to 150cc based on modern technology, Khan said.




Local automobile industry’s total installed capacity (2011-12) was 2,500,000 while the sales volume in 2011-12 was 1,600,000. The capacity utilisation in 2011-12 was 64 percent. The two wheeler penetration in Pakistan is 12/1000 persons.




The DG pointed out that the government’s recent policy shift to offer hefty duty concessions on import of CBU is a great concern for the local industry. Any move in this regard will completely destroy the entire existing local industry, he added.




The government should make its efforts to attract foreign investment but it should not ignore the fundamental concept of a level playing field for all existing and new players, he said, and added that PAMA is not against any foreign investment but without endangering the existing industry, it requests the government not to offer any duty concession to a single player.




He appealed to the finance minister to initiate a fair and meaningful consultation process by inviting the representative body – PAMA – who would plead the point of view of the bike manufacturers.


Courtesy: The News

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