“Pakistan Auto Show 2023: PAAPAM urges tax cuts to boost local manufacturing”

“The government should realize that its treatment of the auto industry as a cash cow by burdening it with taxes ranging between 37 and 43 per cent per locally produced car, is hampering the growth of the auto industry,” stated Abdul Rehman Aizaz, Chairman of the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) in the inauguration ceremony of the Pakistan Auto Show 2023.

Chairman PAAPAM said that around 300 companies in Pakistan are manufacturing thousands of components for car manufacturers in Pakistan, generating sizable employment and contributing heavily to the industrial output of the country.

“Majority of low-tech components and certain hi-tech components of this segment are made in Pakistan,” he said; however, he added that it doesn’t mean that the localisation goal is near completion like in Motorcycle and Tractor segments due to various reasons, including low Volumes, certain non-tariff barriers, reluctance in the transfer of technology by international companies etc.

He said that car consumption per capita in Pakistan is quite low even if compared with regional underdeveloped countries. PAAPAM believes that OEMs shall prioritise the potential of the market we possess and work on lines of tripartite joint ventures among international part manufacturers, local OEMs and auto part manufacturers of Pakistan.

Chairman PAAPAM said that the automobile horizon is not limited to passenger cars and SUVS only. It also comprises sectors like Motorcycles and Tractors where we are world competitive regarding value provided to end customers.

The main reason for competitiveness in these sectors is the 90 to 95 per cent localisation we achieved in these sectors, contributing heavily to the GDP and the national exchequer,” he added.

“Complex and critical components of motorcycles are manufactured in Pakistan under technical assistance of Japanese companies, “said Aizaz, adding that hi-tech components and assemblies, from complete engine to suspension, all are 100% locally manufactured.

The resultant good quality and competitive pricing are getting the acknowledgement not only from local but international customers also, as motorcycles are now being exported to various countries,” he added.

Chairman PAAPAM said that Pakistan is producing the cheapest tractors in the world, even cheaper than India and China, due to the localisation of almost all engine, transmission and suspension parts.

Earlier, Zain Shariq, Convener of Pakistan Auto Show 2023, said that the show is themed around ‘Synergizing Pakistan’ and aims to highlight the hidden assets of the country in terms of value addition and manufacturing. He said that local parts manufacturers are not confined to auto parts only, as they are manufacturing parts for defence, aviation, and healthcare industries too.

He said that a symposium “Synergizing Pakistan” is being held on 28 October during the show, where prominent members of the academia and industry will share their views on challenges and pathways for the manufacturing talent of the country to better position itself in the local and international markets.

It is pertinent to mention that more than 150 companies, including several Chinese and Iranian automotive parts manufacturers, are participating in the Pakistan Auto Show, which is being held in Karachi from October 27-29.

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