Auto Parts Vendors want 51% increase in quota for the import of CKD parts. For this purpose, vendors request the State Bank of Pakistan (SBP) to increase their foreign exchange quota by 51% to $13 million per month from the current $8.59 million in order to avoid disrupting the industry’s supply chain and to streamline matters in accordance with government policy.
The Pakistan Automotive Manufacturers Association (PAMA) and Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) write a letter to the SBP governor, the federal secretary for industries and production, and the CEO of the Engineering Development Board (EDB). In this joint letter addressed to the SBP governor, they requested the removal of anomalies from the automotive sector.
PAMA concerned about the new procedure implemented by SBP:
They claimed that beginning in July 2022, the government set a cap on the imports of original equipment manufacturers (OEMs) with a focus on the vehicle and SUV segments at 50% of the average of the last four months. They also emphasized how the industry’s supply chain has negatively impacted since this condition took effect in September 2022.
The two organizations emphasized in the letter the importance of efficient import consignment clearance beginning in July 2022. They stated that information not widely available for automotive vendors and their consignments stuck at the port which stops the production of vehicles at the OEMs (car manufacturers) end. Therefore, the letter also stated, “We want an increased quota of $2 million for this (car and SUV) essential segment of the auto sector.
Meanwhile, OEMs that specialize in motorcycle, tractor, truck, and bus parts have permitted to import goods without any restrictions as the CKD imports in these parts are fairly low and amount to about one-fifth of the car and SUV segments. They havegranted the relaxation in order to meet the demand of the agriculture and public transportation sectors.
Auto Parts Industry Is In a Historic Crisis:
They stated, that OEMs and vendors required to import machinery, molds, tools, and fixtures as manufacturers are trying to introduce new models. We request the SBP and EDB/MOIP to intervene and allocate a minimum quota of $13 million per month for the minimum functioning of all segments of the automobile sector.
The two associations have also requested the government to form a working-level committee with the SBP governor as its head and representatives from other relevant stakeholders to decide on foreign exchange allocation to the automotive vendors.
