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Auto parts industry demands tariff exemption on raw materials

KARACHI: The auto spare parts industry, which operates 95 percent on self-help basis with over Rs. 20 billion local investment, has demanded tariff exemption on raw material to survive and compete with imported products.

It has also asked the government to give support and cover against what it termed as negative tactics at home and outside to harm the industry.

To introduce their products and highlight the contribution made by the industry towards the nation-building, over 105 firms throughout the country participated the five-day PAPS-2000 (Pakistan Auto Parts Show) held here by the Export Promotion Bureau (EPB). The show, which started on January 18 and ended on January 22, also displayed car and bus models of various leading motor companies.

A member of managing committee of the PAPS-2000 and owner of the Younas Industries Agri (Pvt) Industries, Sh. Mohammad Ashraf, on Saturday, demanded that the industry be exempted from tariff on raw material, otherwise it would be difficult for it to comepte with foreign products in cost and quality.

"The tariff on raw material is 25 percent while on the components it is not more than 15 percent," Ashraf said adding that thus it is a big blow to the home spare parts manufacturing industry.

The industrialists also called upon the government to resist the World Trade Organisation (WTO) move for free deletion which means no monitoring over the imports of spare parts and components.

"WTO, through hostile tactics like free deletion policy, will wash away our home auto spare parts industry," he remarked.

Besides, he said, the dealers in second-hand auto spare parts had become another challenge, and demanded strict check over this trade to save the local industry.

Ashraf suggested that the tariff should be manufacturers' welfare-oriented, instead of the traders.

He said the auto spare parts manufacturing industry was paying more taxes than any other industry in the country.

The industry, besides, has been helping a lot in checking unemployment and at present it has over 100,000 workers on its payroll.

The industrialist said the industry constitutes original equipment manufacturers (OEM), and supply their products for assembling purposes to the local industry, instead of selling in the retail markets.

Besides, this the United States, Germany, England, France, Italy, Turkey, Middle East and the Saarc states are the importers of the auto parts. The sale to the Saarc countries was rapidly increasing, he added.

The spare pars being exported include engine parts, body parts, land brakers and the fly-wheels.

Another member of the managing committee of PAPS-2000, Sharik Sohail urged for consistency in government industrial and commercial policies. The policies should be based on national goals and the government should take the responsibility for their implementation, he said.

Sohail also stressed the need for maximum participation of the private sector, as the public sector along could not meet the national demands.

He however, on behalf of his community, assured all-out help and cooperation to the government to achieve national economic goals.ÑAPP