Daily Times

Other side of the story

Sir: According to a local newspaper report, sales of locally assembled cars has risen despite deteriorating economic and political conditions in the country; fuel price hikes in general and increased import of used ‘reconditioned’ cars.

The aforementioned is only one side of the story. The fact of the matter is that in the period 2007-08, the auto sector had produced 158,000 units, which declined in 2008-09 to only 80,000 units due to the global economic crisis. Recovery of auto sales started in 2009-10. Now according to the latest statistics released by the Pakistan Automotive Manufacturers Association (PAMA), sales of cars have increased by 16 percent to 111,898 units as compared to the same period last year. This increase in car sales occurred during the first quarter following the reduction in GST and SED taxes announced by the government in June 2011, along with the taxi scheme initiated by the Punjab government, which further boosted sales in the auto industry.

It has to be noted that the ban on CNG conversion kits and cylinders is continually creating enormous problems for the industry. Huge investments that have been made by car assemblers on the government’s instance have come to no avail. In fact, with the CNG ban policy in place, the auto industry stands to lose millions. Even though the government is aware of this alarming situation, it is not taking any firm decision to resolve this issue.

The auto industry’s present situation may seem to be on the rise as depicted by the esteemed reporter, when in fact as per the current scenario, the auto industry is far from doing well.

SARAH MIAN

Karachi