Local production of cars

This refers to the letter ‘Auto industry’ (August 23) by Arif Majeed. The writer’s views need some clarifications. One should not forget that local car production started in the year 2000.The initial deletion (replacement of some imported parts with locally developed parts through local vendors) was around 25-30 percent. Only completely knocked down (CKD) kits – involving mainly engine and electronics – are imported from OEMs (original equipment manufacturers) as this is critical technology requiring strategic decision by OEMs for its localisation. The current deletion of potential car manufacturers is around 60percent, which is tremendous and laudable. As such, one cannot say that local car makers are only assemblers. Car manufacturers currently have a large number of Pakistan-based vendors who are trained by the experts from OEMs.

Based on the above facts, there should be a further reduction in prices of locally produced cars, apart from the recent reductions in duties and taxes introduced by the PTI-led government. It is also pertinent to mention that the years from 2014 to 2017 witnessed the highest car production and sales, and manufacturers’ production activities remain uninterrupted despite electricity loadshedding. The prime minster’s recent statement that rising car and motorcycle sales are an indicator of economic growth does not carry much weight. The country’s economic growth is linked to a decline in imports and an increase in exports. The present situation calls for rapid industrialisation so that more jobs can be created.

Engr Asim Nawab

Islamabad