The government has allowed the import of 2,200 luxury vehicles, starving the nation of $1.2 billion in the first half of the year. PAMA has already sent a letter to the Ministry of Industries
At a time when automobile manufacturers and assemblers are on the verge of closing their plants, the government has allowed imports of luxury vehicles that cost the starving nation $1.2 billion in the first half of this fiscal year. At a time when the country was crippled by strict foreign exchange controls even for imports of essential commodities and industrial goods, $1.2 billion was spent on imports of transportation goods, including luxury cars, high-end electric vehicles and their parts. For six months, Pakistan has been facing a severe dollar shortage and its reserves (with the State Bank) are less than $4 billion, barely enough for three weeks of imports.
We fail to understand what the government is trying to do by allowing the import of luxury cars and other expensive vehicles on the one hand and on the other hand banks are unable to open LCs citing non-availability of dollars. "This seems to be a deliberate move to sabotage the local auto industry, which employs more than 4 million people," said a senior executive of a leading automobile manufacturer. provides employment to, contributes 4% to the GDP and pays direct and indirect taxes of over Rs 80 billion in gross revenue collection.
An official of an auto company said that the Pakistan Automobile Manufacturers Association has already sent a letter to the Ministry of Industry informing them of the seriousness of the situation that if the issue of LCs is resolved soon, not only the auto industry but at large. There will be retrenchment in other industries as well and this may lead to economic unrest in the country
He said that Millat Tractors has already suspended its operations while another well-known tractor manufacturing company, Ghazi Tractors, is operating at less than 20 percent of its production capacity. A few days after the suspension, the Economic Coordination Committee of the Cabinet, in a meeting chaired by Finance Minister Ishaq Dar, allowed the import of five-year-old tractors.
Instead of helping the local industry, which is in hot water due to the government's incompetence, it has added salt to the industry's wounds by allowing the import of tractors, which are anything but. I am afraid that they may allow import of reconditioned or used cars which will be disastrous for the country, he said, adding that the demurrage charges of auto assemblers and manufacturers are in some cases higher than the value of the consignments.
Pak Suzuki Motor Co Ltd said ongoing inventory shortages, which were partly imported from abroad, extended the shutdown of its automobile plant, but it has now resumed production after the State Bank allowed them to Assuring that all their consignments that are lying at the port or already dispatched will be cleared.Toyota vehicle maker Indus Motors Company (IMC) also complained of delays in import clearances from the State Bank. Referring to the closure of its production plant in the country from 20 to 30 December
As a result of strict foreign exchange controls, the stack of containers containing various consumer and industrial products at ports across the country has reached around 8,500 in the first half of this year. Containers containing foodstuffs, industrial goods, pharmaceuticals and perishables are held up at ports due to non-opening of Letters of Credit (LCs), while imports of used luxury cars are rapidly disappearing from the ports.
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