The Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has issued an urgent plea to Federal Finance Minister Ishaq Dar, calling for the removal of car assembly kits and auto parts imports from the “non-essential items” list. In a letter addressed to the minister, the association stressed that auto parts manufacturers save $1.5 billion annually through import substitution and contribute over 5% of the country’s tax revenues.
According to PAAPAM Chairman Munir Bana, the association’s members directly and indirectly employ more than 3 million Pakistani workers, including technicians, engineers, and management professionals, on various projects. However, he cautioned that these workers now face layoffs as the sector risks closure.
The association has called for all banks to open all LCs (letters of credit) for imports by authentic part makers and vendors, given that the industry is currently confronting permanent closure due to rising inflation, currency devaluation, and record-high markup rates.
Read More: Auto Sales in Pakistan Drop 47% in First Nine Months of FY23
PAAPAM’s letter to the finance minister read:
“Unless immediate countermeasures are taken to save the “mother of all industries,” a massive tragedy would unfold, as the entire auto parts industry would shut down permanently, leading to losses of millions of jobs, rollback of localization, and repatriation of foreign investments by all the automotive assemblers.”
This appeal comes amid concerns over the rising cost of doing business in Pakistan, which has driven some businesses to shut down. The automotive sector is vital to Pakistan’s economy, contributing significantly to exports and tax revenues. As such, the government may need to intervene to prevent the industry’s collapse and its ripple effects on the broader economy.
