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Automotive Industry In Panic Amid Import Curbs

Ishaq Nabi
by Ishaq Nabi

8-6-2022

2 min read

Pinned

After the import curbs debacle, it is compulsive to get preliminary approval from the State Bank of Pakistan in order to get completely knocked down (CKD) kits of vehicles and all other primary auto-related imports. This has created a hindrance in the arrival of the auto sector imports. Thus, a dominant fear of a shutdown in production is prevailing in the Pakistani auto market.

Pakistani auto market

Due to the domino effect, everyone involved in the whole process will get affected if the approvals for CKD kits import transactions are not processed timely. This will initially lead to halting productions for all major assemblers which will ultimately affect the whole supply chain process. This will result in delayed deliveries and in the worst-case scenario complete shutdown of deliveries.

This will even adversely affect the middlemen i.e. dealers, vendors, etc., and even lead to daily wage workers on the brink of unemployment who are already surviving on the bare minimum.

Meeting of PAMA Director With SBP Governor

Abdul Waheed Khan (Director-General Pakistan Automotive Manufacturers Association (PAMA)) informed SBP Governor Dr. Murtaza Syed regarding the whole situation. He stated that the whole case of delay in payments will create a negative narrative in front of the international suppliers who are taking a big risk exporting their goods to Pakistan. Ultimately this whole chaos will have a negative impact on the future of the auto local industry.

Currently, the delayed weekly foreign payments constitute a total of around $25 million. Moreover, any more delayed payments will cause a loss of $80m to the economy. Thus, a continual weekly loss of $30m to the national exchequer will happen. Moreover, this will increase unemployment in the country.

DG PAMA urged the SBP governor to approve the CKD imports documents on time in order to prevent shutdowns, sustain employment and restore the confidence of foreign investors.

Ban on CBU Imports

The incumbent government imposed a new policy to tackle the ongoing economic crisis in the country. The new economic plan is devised to control the rising import bill. Thus, the government has banned the import of nearly 800 items in 33 categories.

Last month, in an extreme measure to control the rising import bill, the government imposed a complete ban on importing nearly 800 items in 33 categories. Used and new cars were among the banned items and only commercial vehicles’ import is allowed at the moment.

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