KARACHI: Devaluation of rupee, hike in interest rate and Customs duty have badly affected auto industry in the country, while the local businessmen is suffering because the auto investment has...
KARACHI: Devaluation of rupee, hike in interest rate and Customs duty have badly affected auto industry in the country, while the local businessmen is suffering because the auto investment has stopped and international brands have postponed to launch any new product in the current situation.
The industry sources told this correspondent that at least 50 percent decrease in car sales has been witnessed, adding that the situation may get worse. They said the incumbent government took some initiatives that did not endorse ADP-21 2016 Auto Policy and also harmed localisation and the production of 550,000 vehicles locally.
The auto manufacturers claimed if such situation persists and the government may suffer Rs225 billion losses and nearly 1.8 million employments perish. They said the industry needs long term and persistent policies to enhance investment and opportunity that benefits both the industry and the country.
The Pakistan Auto Manufacturing Association (PAMA) released its sales data that reveals nearly 66 per cent decrease in the sale of an international brand Honda as 4,981 units were sold in July 2018 and it reduced to 1,694 units in July 2019. The data said the Toyota received 56 per cent decrease in sale during the period as 5,468 units were sold in July 2018 and only 1,694 units were sold in July 2019, while Suzuki Motors got 23 per cent decrease in sales.
The current market situation forces the industry players to reevaluate future policies. They said the increase in Advanced Customs Duty on raw materials and nearly 2.5 to 7.5 per cent increase in Federal Excise Duty which was announced in the budget would really hurt the industry.
The auto manufacturers said that the devaluation of Pakistani rupees was devastating. The sources told that the current fiscal year, the local auto industry inducted at least Rs140 billion in the market while US$ 1.3 billion would be invested by the new companies.