Pakistan Car Industry Face Risks of Permanent Collapse
Pakistan's Automobile industry is under permanent collapse over import restrictions and non-issue of LCs from commercial banks.
As the country is seized by the worst economic catastrophe so is the automobile sector of Pakistan. The recent news from the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) is quite concerning as a few days ago Honda and Suzuki extended plants shutdown in Pakistan until the end of April over inventory issues.
This time Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) in its call to Finance Minister Ishaq Dar has urged to remove the auto and auto parts industry from the “Non Essential Import Items” list, stating that the automaker industry contributes $1.5 billion per annum to the countries foreign exchange as per through import substitutions and about over 5% annual tax revenue.
PAAPAM Chairman Munir Bana further added that the industry employs more than 3 million workers across the country who are likely to suffer if the risk of complete collapse persists amid economic meltdown. That could directly impinge on the working class within the industry.
As per the State Bank of Pakistan, no commercial bank is authorized to open letters of credit (LCs) for imports that have pushed manufacturers to the ultimate verge of collapse. He emphasized all commercial banks open LCs for imports to resume all the halted production plants in Pakistan.
He further urged the Finance minister to call an immediate meeting to discuss the current turmoil and initiate counter-productive measures to avert the situation. so, that the downtrodden auto sector can be rescued.
The situation has reduced production by over 70% since May 2022. The government needs close heed to its policies, facilitating the industry and enforcing suggested ease in restrictions that thas forced manufacturers to downsize their products and workers.
