The local auto players and vendors are in a state of paralysis due to the severe paucity of foreign exchange and supply issues in parts.
In a joint letter, the Pakistan Automotive Manufacturers Association (PAMA) and Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) informed State Bank of Pakistan Governor Jameel Ahmed that the industry was facing extinction as all supply lines of imported parts and accessories and tooling are completely chocked due to SBP’s restrictions and lack of cooperation from banks.
As a result, factories intermittently shut and workers are being retrenched by both the assemblers and their vendors. If corrective measures are not taken, this scenario would lead to massive unemployment, loss of government revenue, closure of auto assembly plants, and flight of capital.
According to PAMA and PAAPAM, the direct and indirect controls imposed on the opening of letters of credit (LCs) are the prime cause of the above industrial breakdown.
As per figures from the Pakistan Bureau of Statistics (PBS), the import of completely knocked down (CKD) kits for cars had plunged by 38% to $499 million in the first 6 months of FY2023 from $808m in the same period of last fiscal year.
Source: Dawn
A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com
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