ISLAMABAD – After months of decline, Pakistan Automobile industry starts tomake a comeback.
Abdul Razak Dawood, Advisor to the Prime Minister on Commerce, Industries,and Production, has admitted that the government is responsible for theincrease in prices for locally assembled cars.
This is because the last budget introduced an increase in sales tax,customs duty, excise duty, withholding tax, and regulatory duty.
We, the government are responsible for the increase in duties and tax forcars and not the manufacturers.
He said that this is the main reason behind the increase in prices whileresponding to a question raised by Senator Bahramand Khan Tangi aboutIndustries and Production on Thursday.
He revealed that the auto industry has managed to achieve up to 70%localization but also added that 100% localization is impossible. However,for tractors, localization has reached 95% due to its simpler technology.
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Another reason behind the auto industry not achieving 100% is because ofthe constant change in car models and everyone wanting a different model.Tractors, on the other hand, have barely any variation in terms of models.
The adviser added that the main reason for the localization of cars is areduction in prices and it is unfortunate that the exact opposite ishappening. Suzuki has achieved 70% localization, Toyota has managed to gain65%, and Honda currently stands at 58%, but the import of body parts andraw materials makes these cars expensive.
Razak did, however, appreciate the fact that there was finally an increasein auto sales after months of decline.
I called CEOs of two companies i.e. Toyota and Honda a few days ago whostated that after many months of decline, January was the first month whenproduction of cars was up which is a very good sign.
