IMC supports new entrants to encourage competition

KARACHI: A leading automobile maker Indus Motors Company (IMC) is in favour of new entrants to promote competition in the industry, said its top executive on Thursday.
Chairman IMC Ali S Habib, addressing the company’s silver jubilee, said the government should encourage new entrants in automobile industry by ensuring a level-playing field.
“The local markets have potential to accommodate Korean, Chinese and other brands,” Habib said. “Pakistan is set to become the world’s 4th largest populated country of 240 million people by 2030, presenting a huge potential for growth of mobility and an opportunity to create employment.” He said automotive manufacturing is a high profile industry, generating enormous revenue and employing millions of people. He added that it is regarded as the ‘mother of all industries’ due to the value chain it creates. IMC chief said the government should decide how it wishes to pursue mobilisation growth: through manufacturing or trading.
It must look at examples of neighbouring countries, like India, Thailand and Indonesia, which have nurtured their industries until the threshold volumes have been achieved to gain competitiveness. These countries have restrictions on import or used cars and tariff and non-tariff barriers to ensure that domestic production is not damaged.
No auto manufacturing country permits liberal imports of used cars as Pakistan does.
“The government would do well to tighten this policy if the industry is to flourish,” he said.
Habib said ‘made in Pakistan’ should be the sole agenda of the government to generate revenue, create employment and spur economic growth. “If this is done, it will strengthen the economy. It is high time that government sets its priorities to revive the economy of the country,” he said. He said a free trade agreement has a negative impact on local industries.
A FTA gives benefits to Pakistan’s partner and creates employment and revenues for the latter. But it ultimately forces the closure of the local industries.
“It is easy to be an import-oriented nation, but there is a huge cost attached to this,” he added.
Investors and business communities are willing to invest in the country if government ensures sustainable long-term policies.
Habib said there is no harm in doing business with India but it should be a win-win situation for both the country.
“You don’t get what you deserve you get what you negotiate,” he added. “So, the government needs to negotiate well and get all the non-tariff barriers removed.”