Beginning of the end of auto industry in Pakistan?

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As vehicles’ prices and taxes on them are on the rise, there has been a significant increase in unemployment of auto-workers. Thousands of the workers have inevitably been removed from the jobs in the past few months. Pakistan Association of Automobile Parts and Accessories Manufacturer (PAAPAM) Chairman Mohammad Akram has made a statement that car merchants have fired thousands of outsourced employees, daily wage workers, and contractual workers from July till today. All this due to a substantial decline in production and sales in the overall auto sector.

PAAPAM’s Chairman Remarks:

Chairman PAAPAM, Mohammad Akram during an interview with a local media outlet, stated that he had gone through the feedback of association’s 400 members across the country regarding cut-off of around 40,000 people in view of the informal fall in parts procurement by the car and other auto assemblers after massive sales drop. He also said:

“I see more joblessness in case the sales slowdown continues in the next two to three months,”

Chairman feared that this cycle of firing workers might continue in the coming months.  Soon permanent workers may be the new victims of this next phase of lay-offs.

He made it clear that 1QFY20 had already seen its end in red for the entire auto sector, while sales are probable to remain low until December. He blamed low localization in vehicles as the main reason for rising vehicle prices, especially for cars. PAAPAM’s chairman believes that higher localization can prevent the continuous increase in prices of cars.

The firing of auto workers caused some serious problems for the car vendors and auto industry. However, on the other hand, recently, Indus Motor Company (IMC) — the producer of Toyota vehicles — has made sure that it will not downsize and layoffs its employees despite low sales. Something we all should appreciate.  IMC resumed auto production at half of its original capacity from Oct 1st, while its plant was shut down for the last 15 days of September.

That’s it from our side, drop your thoughts in the comments section below.

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