Pakistan Automotive Manufacturer’s Association (PAMA) is worried about the auto industry’s well-being, following the State Bank of Pakistan’s (SBP) recent clauses regarding the import of completely knocked down (CKD) kits.
SBP has devised a measure that warrants the prior approval of CKD import transactions. The measure applies to the following:
- Import of goods for issuance.
- Enhancement.
- Amendment for Letter of Credit.
- Registration.
- Amendment of contract.
- Advance payment.
- Authorizing transactions on an open account or collections basis.
According to PAMA, it is an exhaustive exercise that will result in operational delays that could jeopardize the industry. Director General (DG) of PAMA Abdul Waheed Khan has voiced his concerns in his letter to the acting SBP governor, Murtaza Syed.
The letter states that this sudden directive has placed major obstacles on CKD imports. DG PAMA stated,
The delay in processing approvals for CKD import transactions will lead to production shutdown for all major OEMs in the next week, which will disrupt the entire supply chain including local vendors, dealers, support entities and consequently lead to unemployment of daily wage staff and contract staff of the entire industry.
He added that delays because of this can create a negative impression of Pakistani business partners on their foreign counterparts. He warned that it may also dissuade future prospects from investing in the country.
The automakers have requested a timely approval of CKD imports from the SBP as they believe that it would be in the Pakistani car industry’s best interest in the long run.
I think these automakers should now start to look for local industrial suppliers, it’s been a long time since this was needed. We need our local industries to survive and these automakers really need to do their part.
Public is helpless at the moment. Whatever policy impose is acceptable.