Abdul Razak Dawood, Advisor to the Prime Minister on Commerce, Industries, and Production, has admitted that the government is responsible for the increase in prices for locally assembled cars. This is because the last budget introduced an increase in sales tax, customs duty, excise duty, withholding tax, and regulatory duty.
He added:
We, the government are responsible for the increase in duties and tax for cars and not the manufacturers.
He said that this is the main reason behind the increase in prices while responding to a question raised by Senator Bahramand Khan Tangi about Industries and Production on Thursday.
He revealed that the auto industry has managed to achieve up to 70% localization but also added that 100% localization is impossible. However, for tractors, localization has reached 95% due to its simpler technology.
Another reason behind the auto industry not achieving 100% is because of the constant change in car models and everyone wanting a different model. Tractors, on the other hand, have barely any variation in terms of models.
The adviser added that the main reason for the localization of cars is a reduction in prices and it is unfortunate that the exact opposite is happening. Suzuki has achieved 70% localization, Toyota has managed to gain 65%, and Honda currently stands at 58%, but the import of body parts and raw materials makes these cars expensive.
Razak did, however, appreciate the fact that there was finally an increase in auto sales after months of decline.
I called CEOs of two companies i.e. Toyota and Honda a few days ago who stated that after many months of decline, January was the first month when production of cars was up which is a very good sign.
he owns many IPPs which sell expensive electricity to the government which then is subcidized to the end consumer and isn’t cheap enough for the industries to compete with imports… this also produces circular debt which forces government to go the IMF which asks for more taxes and high interest rates which destroys the economy.
lol circular debt is caused by government price controls
government does not need to give any subsidy in my opinion…. they need to fix contracts or get out of this electricity and gas business and allow private sector to step in to reduce the prices.
he owns many IPPs which sell expensive electricity to the government which then is subsidized to the end consumer and isn’t cheap enough for the industries to compete with imports, this also produces circular debt which forces government to go the IMF which asks for more taxes and high interest rates which breaks the economy.
There is no pressure on the assemblers to manufacture expensive parts locally. If the government reduced import duty the local assemblers would face competition and that might force them to operate more efficiently including manufacturing more things locally.
In my opinion Abdul Razak Dawood is stupid person, literally he doesn’t know any thing about automobiles. Suzuki is busy to sale international retired and pathetic models in Pakistan such as Bolan, Ravi, swift and wangon R. From last 30 years, nothing has been changed in Bolan and Ravi while swift and Wagon R are in production from last 11 and 6 years respectively without any change. The Engines for Wagon R and Cultus are also same. Gear transmission is also same for cultus, wagon R and alto 660cc. Why haven’t they get 100% localisation in these models?
He is another clever businessman making money off Pakistanis