After the local car industry observed a huge downturn in sales and car finance, the automakers have called the government to ease the import Embargo.
In a letter written to the Ministry of Industries and Production, Director General of Pakistan Automotive Manufacturer Association (PAMA) Abdul Waheed Khan has confer to alleviate the inflicted import curbs shattering the auto industry.
“Since May 19, 2022, Original Equipment Manufacturers (OEMs) were restricted to import auto parts as per the quota allocated by the State Bank of Pakistan (SBP). In addition, from August 2022 onwards, automotive vendors were also restricted from importing auto parts under Chapter 84 and 85,” khan added.
He further informed, “Initially, due to the dire economic situation of the country, the auto industry had fully supported the measures taken by the government to curtail the import bill. However now, the above measures have started taking a toll on the auto industry as production of auto manufacturers has come down to almost 30-35% of installed capacity,”.
Now, as the economic situation of the country is improving and the first tranche of the IMF loan has already been received, it is the right time to sit with the auto industry and explore the easing of import restrictions,” Khan suggested.
SBP Curbs Made A Considerable Dent To Car Finance
Where the Skyrocketing inflation has affected the consumers’ purchasing power, the recent restrictions by the State Bank of Pakistan (SBP) have added fuel to the fire – shattered car finance.
Reports have disclosed that auto financing marked a new low in August 2022 – month on month (MoM) decrease of 2.2 percent with Rs. 353 billion. Whilst year-on-year (YoY) jump of 8.8 percent.
Reports have further informed that car financing has witnessed a new down since January 2022. Resultantly, the market may observe production cuts as a consequence.
What do you think about ongoing curbs faced by the local automakers? Drop your thoughts in comment section.
