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By Mansoor Ahmad
Wednesday, January 16, 2013
From Print Edition
 
 

 

LAHORE: While the auto sector is on the same page regarding the import of used cars, the domestic auto parts makers have reservations about the stance of car makers linking the localisation of high-tech engine parts to higher volumes.

 

Chairman Pakistan Association of Auto Parts and Accessories Manufacturers (PAAPAM) Munir K Bana sides with original equipment manufacturers (OEMs). He said that reasonable volumes are essential to go for high-tech parts. He added that he is a regular supplier of radiators to all the car producers of the country. “Recently, one of the OEMs has stopped procuring radiators from Pakistani vendors as it has shifted to high-tech plastic-cum aluminum radiators,” he said.

 

Chairman PAAPAM said that he was producing radiators in collaboration with a foreign supplier and he offered him to join him in manufacturing high-tech radiators. He said that the foreign supplier declined the offer as it pointed out that the volumes in Pakistan are too low to establish a high- tech radiator plant. On evaluating the cost of the plant, he found that producing high- tech radiators would not be viable till the volumes cross half million car units a year.

 

Former executive committee member of PAAPAM Syed Mansoor Abbas did not agree with stance of the current chairman. “There are radiator manufacturers in Pakistan who have not only adopted the plastic-cum aluminum radiator technology but are aggressively exporting these radiators to the US, European Union and other developed countries,” he said. “The actual hitch in acquiring foreign technology is the insistence of the Japanese car manufacturers to go for joint venture or technical collaboration with the company specified by them.”

 

He added since the company providing high- tech technology enjoys monopoly its conditions for a joint venture are linked to volumes and if the auto part makers choose technology transfer, the royalty charged is so high that establishing a high-tech plant requires high volumes.

 

Abbas said that the OEMs should delink the manufacturing of high-tech parts through their designated company. Instead, he added, auto parts manufacturers should be supplied specifications and technical details of the part allowing the manufacturer to acquire technology from any other Japanese company.

 

He said that the Indian car manufacturers have managed to upgrade their technologies on the same conditions but the cost of their parts is high. “This is the reason that the prices of Indian cars are generally higher than similar models produced in Pakistan,” he said.

 

Former chairman PAAPAM Tariq Nazir said that the absence of will on the part of car manufacturers is the reason for non-deletion of high-tech auto parts. He cited the example of tractor producers who showed determination to produce tractor engines. He added that when tractor production in Pakistan was merely 33,000 units, the manufacturers had localised 85 percent of the parts through local vendors.

 

At 60,000 units a year, the deletion level reached 95 percent. “Today the prices of Pakistani tractors are lowest in the world,” he said, adding that high-tech engine parts technology was acquired from the most competitive sources in the world. As far as car manufacturers are concerned, deletion of high-tech is a taboo, he added. He said that all cosmetic parts, such as car body, tyres, batteries, plastic parts, etc., are manufactured locally.