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Special Report

July 13, 2013
 

PAMA misguides the nation

mobileworld.com.pk motorcycle mobile world magazine
 

The actual production of Two/Three Wheelers in Pakistan during calendar year 2011 was 1,645,047 units while in 2012 it was recorded 1,627,083 as already published by MOBILE WORLD in its March 2013 issue. Similarly, if we go through the nine months figure of July-March 2011-12 as described by the Report, this total was 1,212,490 units instead of 620,741 as quoted by PAMA. For July-March 2012-13 this total is compiled as 1,224,410 units by MOBILE WORLD, instead of 618,439 as claimed by PAMA. And the EDB is well aware of this information

-By Naisr Mahmood

“The auto industry is presently not provided with any auto policy as the long term Auto-industry Development Program (2007-12) since expired on June 30th 2012.” This was confessed by the bureaucracy in its latest “Economic Survey of Pakistan 2012-13″ released one day before the budget proposals announced by Finance Minister.



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The Survey stated that growth in automobiles industry across the world depends heavily on economic growth and availability of financial institutions at favorable terms. The industry seems to be less optimistic in comparison with the corresponding period of last year 2011-12.

According to Report, the sector recorded positive growth in Jeeps 67.1 percent and Tractors 34.5 percent during July-March 2012-13 as compared to corresponding period last year. Cars, LCVs, Buses, Trucks and two/three wheelers showing a negative growth of 23.2 percent, 30.2 percent, 8.8 percent, 27 percent and 0.3 percent respectively during the period under review. The table below shows comparative position at a glance:-

Table 3.11 Production of Automotive Industry —

PAMA PRODUCTION CHART

Farm Tractors is intrinsically an upcoming sector because of its well-known comparative advantage. This sector presents a recovery from the impact of sales tax that was levied during 2011-12. The said levy of sale tax was later rationalized during 2012-13. After the imposition of reduced rate of sales tax its production has witnessed increase with a growth of 163.3 percent in July 2012 as compared to negative growth of 69.5 percent last year.

The fall in the production of locally produced cars during 2012-13 on account of persisting uncertainty followed by a major shift in the policy in order to favour the imports of used cars. The said policy change came into effect in December 2010 and the import of used cars grabbed as much as 36 percent market share of locally produced cars during 2011-12. Above all, the recent scheme put forth by the government to legalize the smuggled vehicles aggravated the gloom in more than 40 percent of the current market share. The prospects of growth in the industry are marred by the influx of used and smuggled vehicles in such numbers that almost equals one year’s production of the industry.

MOBILE WORLD Magazine - Motorcycle Production-2012-22
Report further said, the production of heavy commercial vehicles (HCVs) Buses and Trucks, was 4169 units, five years ago July-March 2007-08 and now the production figure is 1780 units July-March 2012-13 registering a steep fall by 57 percent. The heavy vehicle industry is struggling for life on account of influx of old and used vehicles besides there are cases of under invoicing and mis-declaration. Furthermore, the cost of locally produced HCVs suddenly increased due to imposition of 17 percent sales tax in 2011-12 which was major blow as the competition with vehicles under invoiced and/or entering by undue means greatly increased. In this scenario, the survival of heavy commercial production in the country is seriously threatened as since long it is sustaining only with 20 percent of installed capacity. The schemes by the government like revamping the urban transport and implementing the trucking policy would surely help to revive the industry. The passenger and goods transport currently in use would soon have to be replaced to move new environmental friendly (Euro II) vehicles.

The potential demand for vehicles in the economy maintains a worthwhile promise for the industry. However, the recovery in the industry would be a matter of consistency in policy by the government, the Report concluded.

It may be mentioned here that with reference to contents of above Table 3.11, the reporting Ministry is depending upon Pakistan Automotive Manufacturers Association (PAMA), a faction of the like-minded automotive assemblers that does not represent the entire automotive industry of the country. This could be assessed from Two/Three Wheelers data provided in this Table. It claims that the installed capacity of Two/Three Wheelers is 1.8 million units but production in July-March 2011-12 period was 620,741 units and July-March 2012-13 remained 618,439 units respectively showing a decline of -0.3%, which is absolutely wrong and misguiding statement.

The actual production of Two/Three Wheelers in Pakistan during calendar year 2011 was 1,645,047 units while in 2012 it was recorded 1,627,083 as already published by MOBILE WORLD in its March 2013 issue. Similarly, if we go through the nine months figure of July-March 2011-12 as described by the above Report, this total was 1,212,490 units instead of 620,741 as quoted by PAMA. For July-March 2012-13 this total is compiled as 1,224,410 units by MOBILE WORLD, instead of 618,439 as claimed by PAMA. And the EDB is well aware of this information.

-Published on page#20 & 21 in June-2013 edition of MOBILE WORLD Magazine

PAMA misguides the nation





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