Tussle Between PAMA and PAAPAM Intensifies

The tussle between two premier bodies of auto sector – Pakistan Automotive Manufacturers Association (PAMA) and Pakistan Association of Auto Parts and Accessories Manufacturers (PAAPAM) has intensified on facts, figures and the impact of Statuary Regulatory Orders (SROs).

The conflict between both the bodies started after Chairman PAAPAM wrote a letter to Engineering Development Board (EDB) and raised accusations on the car assemblers. EDB, which is the regulator of auto sector, also called together a meeting to resolve dispute between the assemblers and part manufacturers.

Related: Auto Parts Vendors Criticize Assemblers for Low Localization & Higher Prices

PAMA’s Director General, in a letter to EDB said that the Association has seen the letters and other papers and is ‘shocked’ at the narration of Chairman PAAPAM that auto industry is in disarray, adding that he talked of integration of three notifications and seeks access to OEMs data and that of EDB, through a web-based system for his purpose. Chairman PAAPAM has claimed that implementation of SROs is faulty and lacks transparency and that low rate of duty on 655 items prevents their localization while it gives opportunity for misuse. He further argues that rupee depreciation was not good enough reason for increase in prices of vehicles. The Director General of PAMA said:

“We find the account of Chairman PAAPAM is filled with confusion and contradiction and it is essentially for the government/EDB to handle it. However, it would have been better if it was taken up at the AIDC level, which has much larger representation and more suited forum than discussing the same at a subject specific sub-committee.”

The auto assemblers are of the view that Chairman PAAPAM representing a responsible body must have sought organizational support and brought forth a specific case, if there was any; rather than hopelessly putting forth his own opinion in “dubious” terms.

According to Deputy General Manager of PAMA, AIDC is aware that the then system of mandatory deletion program was succeeded, back in 2006, by a tariff-based system whereby three notifications were issued. These notifications by far most successfully served the purpose, as an integral part of two auto policies. The Association further said that these policies were the outcome of deliberations between the three stakeholders, namely the OEMs, part makers and the government. The system of deliberations between these stakeholders has since become an established practice, and notified by the government as AIDC, to which all matters, whatsoever, are referred to, PAMA maintained.

Related: Auto Assemblers Seeking Stimulus Package from Government

According to PAMA, the environment weaved through auto policies saw an unprecedented era of development in the auto industry with progressive manufacturing of auto parts in the country. Investment kept pouring in ever since 2006 for technology acquisition and capacity expansion and localization. New investors have also joined with new make and models to take share in market expansion and the opportunities for further development of the industry and enlarging choice for the customers. The Director General PAMA further added:

“For someone not deeply conversant with industry matters Chairman PAAPAM’s spat would been enough to mislead. For this reason we would urge that, once and for all, no individual should be allowed, least not an individual representing an Association, to subvert the legitimate industry interests and, for this reason, we would like that merits of all that he said be thoroughly discussed at the government notified forum of AIDC which carry representation from various ministries, FBR, planning commission and the academia.”

From Business Recorder

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