LAHORE, Feb 3: The Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has appealed to the government to declare the auto industry a key industry as it provides livelihood to more than five per cent of the country’s population, saves valuable foreign exchange and contributes almost three per cent to the GDP.

“The industry comprised assemblers of cars, motorcycles, tractors, buses, trucks and other vehicles as well as the Auto Parts Manufacturers (APMs) that produce the entire spectrum of engineering technologies necessary for assembling an automobile and a majority of the auto parts manufacturers are SMEs which unfortunately have no access to traditional bank credit,” said PAAPAM Chairman Munir K. Bana in a statement on Sunday.

“Governments in the West offer bailout packages for the auto industry in times of crisis, but unfortunately our government do not have the resources to support auto industries in Pakistan, even though these industries generate employment, save foreign exchange through import substitution and, being fully documented, honestly pay their fair share of taxes.“Since the auto industry is considered the mother of all industries, governments around the world bend backwards to ensure that the auto industry survives all major setbacks, whether these are local or international slowdowns, or whether there are natural catastrophes or manipulated meltdowns.

In Pakistan, this is the only industry which has continued to invest in new technologies and raise production capacities, in spite of adverse policies like import of used vehicles, non-implementation of past auto industry development plan, lack of export incentives, non-availability of credit, absence of utility services etc.,” said the PAAPAM chairman.

He reiterated that by declaring auto a key industry, the government could create the right environment for encouraging new entrants to set up assembly plants in the country, fostering healthy competition, further localisation and industrial growth.

The measure would be a better option compared to the current trend of supporting import of used vehicles at the cost of local employment, foreign exchange losses and revenue generation, said Mr Bana and added that imports of used vehicle had been eating into market shares of the auto industry for two years, creating idle capacities and badly hurting auto parts manufacturing industries.

While used cars were curbed last December by reduction in the allowable age limit for imported used cars to three years, import of other vehicles, like vans, SUVs and heavy commercial vehicles, must also be limited to three years, as this menace continues unabated.