Zeeqaad 14, 1427

December 6, 2006

Import of used cars and spare parts not in nation’s interest: KCCI Chief

 “It is imperative that the domestic auto industry gear up its efforts to enhance production so that the country is not dependent on imported used cars and becoming a junkyard for these cars. At the same time, the government should not accept any recommendations to allow the imports of used auto parts.” This was stated by Majyd Aziz, President Karachi Chamber of Commerce and Industry, while inaugurating the 2^nd International Automobile, Auto Parts, and Accessories Exhibition at the Karachi Expo Center.

Majyd Aziz further added that in 2001-2, the total production of cars, trucks, buses, tractors, and motor cycles was less than 200,000 while in 2005-6, the figure had touched one million. He said that less than 200,000 cars were produced in 2005-6 while the immediate demand potential is over 500,000 cars. He also said that nearly Rs 100 billion has been invested by the automotive sector in the last few years and the projections are that other Rs 100 billion would be invested in the next few years for capacity building, innovation, and modernization.

The KCCI Chief added that Pakistan is an interesting market and there is room for many other auto manufacturers. He, however, stated that they should also strive for exports from Pakistan and that  this would be possible when they manufacture world class vehicles here. He also advocated the setting up of the Technology Development Fund that should be funded by the Export Development Fund and this fund should be used to support the manufacturers in matters of Royalty Fees.

Majyd Aziz moreover said that the Pakistani auto worker needs skills development and capacity building while the domestic technical institutes are not able to provide the industry-needed requirements. He said that JICA and AOTS of Japan sponsor a lot of training programs for Pakistanis in Japan but most of the middle management and technical people who come back, seldom transfer their new knowledge to others in their units. This mindset has to change if Pakistani workers are to improve their skills and learn about newer processes.

The Chamber President also criticized the lax attitude of those in the government who blatantly allow smuggling, under-invoicing, and mis-declaration of auto spare parts especially thru the Sust border. He said that this menace has led to loss of employment, loss of revenue, and loss of initiative in the organized sector. He also decried the high interest rates that have affected financing of automobiles for the consumers.

Majyd Aziz advised the automotive producers to concentrate on improving quality, reducing the prices, introducing faster deliveries, and paying formidable attention to after-sales service. He said that continued monitoring of these would attract customers to Pakistani produced cars and would make imports of automobiles a superfluous activity.