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Auto industry needs to be developed: study

Discussion in 'Pakistan Economy' started by UmarJustice, Feb 20, 2013.

  1. UmarJustice

    UmarJustice FULL MEMBER

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    ISLAMABAD, 19 Feb: A sectoral study by the Competition Commission of Pakistan (CCP) highlighted that the country’s automobile industry was inward looking and protected itself through the use of regulatory instruments.

    “Pakistan needs to develop the automobile industry instead of protecting it and in this regard imports have a disciplinary impact on domestic firms,” the updated CCP study on the automobile sector released here on Tuesday noted.

    The study is part of the CCP’s research programme, titled, Competition Impact Assessment Studies, targetted to assess competition vulnerabilities in various sectors.

    The CCP study has criticised government policies of providing protections to the local auto sector, the key among them being restrictions on the import of cars.

    The study highlights that the import of cars is allowed only under the Gift, Personal and Baggage Schemes with restriction on allowable age limits, the policy for import of cars with an allowable age limit of 5 years remained in practice from December 2010 to December, 2012, and it was reduced to 3 years in December, 2012.

    “Furthermore, on 31 August, 2012, the depreciation rules were also changed,” CCP said adding that if the cumulative effect of both these policy changes is taken into account, another protection was landed to protect the domestic automobile industry at the expense of consumers.

    However the study has recommended that opening up of domestic market to the import of new cars at reasonable tariffs and reducing protection of local industry to allow foreign competition for the benefit of consumers.

    “This increased competition will reflect in better pricing and improved quality as well as availability of cars on demand,” CCP has said, adding that it is preferable for the import of used cars to be open, rather than allowed under the Gift, Personal and Baggage Schemes.

    The draft study on auto sector assesses the relevant laws and their impact on the sector; market share of the players; concentration levels of the market; and the behaviour of the players affecting competition.

    The CCP has recommended that it was needed to remove entry barriers imposed by higher tariffs.

    “This will make cars more affordable, push the local assemblers to be more competitive, and incentivise the automobile industry to strive towards international standards and pricing,” CCP said.
    Auto industry needs to be developed: study | Newspaper | DAWN.COM
     
  2. KRAIT

    KRAIT ELITE MEMBER

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    One day or the other Pakistan will have to open its market. Why not they attract foreign makers to launch products in JV and sell only those product they have to make in the country itself.
     
  3. cb4

    cb4 ELITE MEMBER

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    First we need agriculture revolution then industrial revolution....
     
  4. KRAIT

    KRAIT ELITE MEMBER

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    If Pakistan wants to catch up, it has to do it in parallel. Agri products fed as raw material to Industries will help in increasing the growth rate. Value addition is important for countries like us if we have to survive in current competitive market.
     
  5. STEELMAN

    STEELMAN FULL MEMBER

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    Well both can be done at same time.
    Agriculture revolution is needed more Govt participation or state money is involved like establishing more Agri universities, subsidy for certain products used for cultivation.Whereas in Industrial revolution at present scenario private players are needed more,JV with big MNC giants only Govt has to look after the policies which will attract more FDI.
     
  6. Ayush

    Ayush SENIOR MEMBER

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    some day, they will have to give up their protection for the sake of competition. you can't be protected always, you have to give ut up someday.:P it's just a matter of time.
     
  7. cb4

    cb4 ELITE MEMBER

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    Agriculture first then Industrialization.

    U.K started it's industrialization period in the 1800s and the U.S on the other hand started in the 1950s (right after World War 2). If you notice (if you have read history), these countries were working to eliminate poverty before that. This in my view is the key ! You just cannot jump to another level while you're people are struggling to eat at least once a day.

    There is a certain way you can eventually lead to the phase of industrialization. Let us suppose dates are a commodity. Eventually, upon being successful in marketing and generating profits, you can slowly start to build an industry by setting up food processing.

    What you are suggesting is not impossible. You can have both agriculture and industrialization. In fact it is something both India and China are currently working on. Here is the thing. This is pure Capitalism. There are the capitalists (generally rich having ownership of a business) and there is the labourer who is paid a minimum wage to work. Clearly disparity isn't it ?
     
  8. KRAIT

    KRAIT ELITE MEMBER

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    @cb4 Actually automobile is must for a vibrant economy. Transport of goods heavily depend on these. Everyday I see, many autorikshaws, lorry, trucks, tractors etc. built in India delivering goods and working like Blood to the human body.

    When you have domestic automobile industry, the cost is comparatively low and hence the price is low. That means any one can afford an automobile for trade and business purposes.

    India is full with Tata trucks, Mahindra pick ups, Bajaj Autos etc.

    Also, the bike and bus section provides much needed transportation which helps in migration and up down for people to go to their jobs and return home in time. Due to competition, we have great bikes both service wise and mileage wise which is used in villages and in metros.
     
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  9. explorer9

    explorer9 FULL MEMBER

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    AFAIK, PAkistan is a net exporter of food grains, vegetables and fruits barring the hither & thither imports. Pakistnan needs to come out the anarchy and lawlessness, the only thing the country disparately needs is good governance rest will follow suit.
     
  10. Mani2020

    Mani2020 SENIOR MEMBER

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    Strong automobile industry of Pakistan is neither in favor of Japanese manufacturers nor in the favor of these corrupt politicians who think over short term benefits rather than long term horizons .... whenever any local company starts to raise her head her head is slashed by the government due to huge Japanese lobbying .... In past that happened to ADAM motors

    Government wants there pockets filled which they are doing by getting bucks from Japanese lobby plus the 300% of custom/tax on the original value of the vehicle charged by them ...which makes a 3lacs car to be sold in 12 lacs .....

    If any local company rises that means japanese cant sell there junk in form of suzuki mehran 800cc and toyota corolla xli ..at way higher prices than they actually deserve ...specially the former one
     
  11. xyxmt

    xyxmt ELITE MEMBER

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    Its more than just low cost, auto industry can provide the largest form of employment in any country
     
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  12. KRAIT

    KRAIT ELITE MEMBER

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    Yup. Not only in manufacturing but also in service sector. Especially in villages and small towns.
    @Mani2020 Actually its the present companies that don't want market to be opened. Its lobby of Pakistani businessmen and industrialists.
     
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  13. MINK

    MINK FULL MEMBER

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    In India import duty on new cars is 100%. It forces companies to set up factory to produce cars instead of importing them. What's the import duty on new cars in Pakistan?:what:
     
  14. Mani2020

    Mani2020 SENIOR MEMBER

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    yar more than Pakistani businessman its the japanese one .... almost all companies operating in Pakistan for cars and SUVS are japanese Honda toyota suzuki mitsubishi , even Hyundai hasnot launched any car after santro in Pakistan .... if Pakistani company comes it will be able to sell its cars at a way cheaper rates than japanese so the price conscious consumer will tilt towards them ..... then who will sell junk in Pakistan for 7 lac rupees.... you know a suzuki mehran 800cc is selling in Pakistan ~7 lac rupees ..... and cars like toyota vitz that come in reconditioned form are being sold ~13 lac rupees ... Prius reconditioned is sold for ~18 lacs ..... A Pakistani company came i agree that quality wise it might not be the same as japanese but it was producing atleast some quality at relatively cheaper rates but the company bit the dust after government refused to support the owner
     
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  15. American Pakistani

    American Pakistani ELITE MEMBER

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    Agriculture first? Are you sure? Make the rich blood sucker jageerdars/waderas/ feudals more rich & more powerful...? This sector doesn't even pay taxes. Pakistan need massive industrialization along with agriculture & farm outputs. Pakistan currently stands with sub sahara African countries in industralization field. Look at Asian countries they are rapidly progressing in industrial outputs, even countries like Vietnam, SriLanka & Bdsh are trying their level best to bring as many industries as possible on the other hand Pakistan is doing nothing.