The auto sector is struggling to continue operations due to sanctions from the State Bank of Pakistan (SBP).
For that reason, local auto part vendors have demanded a 51% increase in the Complete Knocked Down (CKD) kit import quota. The current quota is $8.59 million, whereas the vendors demand a $13 million quota.
Pakistan Automotive Manufacturers Association (PAMA) and Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) have sent a joint letter to federal secretary for industries and production and CEO of the Engineering Development Board (EDB).
The associations have demanded the removal of irregularities from the relevant policies. The letter stated that sanctions were meant for the sedan and SUV segments, but hampered the production of other cars as well.
For smooth development of local parts, the trial runs are conducted months before the start of mass production. We request enhancement of quota for import of machinery and allied equipment. We urge SBP and EDB/MOIP to intervene and allocate a minimum quota of $13 million per month for bare minimum working of all segments of the automobile sector.
The economic turmoil pressures and import restrictions have caused several automakers to observe massive production cuts.
Companies blame the new mechanism enacted by the State Bank of Pakistan (SBP) for the decline, which requires approval for CKD import clearance. Honda, Hyundai, Toyota, and Suzuki are observing production cuts to cope with operational hiccups.
Considering these factors, the Pakistani auto sector is in for an extended dry spell.