AUTO INDUSTRY

The other side of the mirror

By RAHEEL YOUSUF KARIM
Jan 26 - Feb 01, 2004

There has been an ongoing debate over possible reforms of the domestic auto industry and it seems as if these debates have gained momentum with the passage of time. Along with these, there are a series of allegations with personal attacks on Pakistan's auto industry and the auto assemblers for fleecing money.

It appears that a certain lobby is keen to bring re-conditioned cars back into the market to serve their own personal interests. However, it is time that we should sit back and analyze the kind of people who are so desperate to get the current auto policy status quo changed. The question that arises is that whether their primary objective is to make cheaper cars available to the public? Or is it a convenient excuse to hide a multitude of less than ethical business practices that are not in the interests of either government or consumer?

Sadly enough, no matter what their purpose may be, this certain lobby refuses to acknowledge the new customer-friendly policies introduced by major automobile manufacturers. These policies have resulted in bringing about a sea of change in the automobile market, according to both industry insiders as well as formerly hard-pressed customers.

The market has now seen the end of long waits for delivery, premiums paid to investors and the trade for immediate delivery and having to pay the full price of the vehicle in advance. What's more, even the auto dealers appear to be happy with the new policy. The auto sector is currently facing fast paced growth. With increased deliveries, reduced premiums and prompt deliveries, almost every one seems happy and content with the way our auto industry is operating.

The only ones who are still remain unhappy with the flourishing state of affairs are the investors or middlemen who had vested interests and relied on a shortage of vehicles to achieve their questionable ends. With increased volumes and faster availability, genuine buyers no longer need to pay premium prices they once used to extort to guarantee immediate delivery. The question then is, why is this lobby of anti-auto industry going on with their attacks. They should atleast acknowledge the facts rather than turning their backs at them.

The fact is that though Pakistan entered into the field of auto parts exports less than four years ago, this year's target of US$ 55 million is likely to be exceeded. Vendors are even exporting auto parts of vehicles that are not manufactured in Pakistan, such as Mercedes, Ford Van, Morris and even the famous London taxi. To date only about 40 of the more than 500 registered auto parts vendors registered with manufacturers of international car brands have entered the exports arena. When the rest exploit the potential, as they are expected to do in the next couple of years, there may well be a major boom for the auto engineering industry. To a great extent the credit for the success of the auto parts industry goes to the vendor development programs organized by the domestic auto industry, whose mainstay is technology transfer.

The current direct investment by car manufacturers in the country's economy is over Rs. 8 billion, and today the domestic automobile industry contributes upwards of Rs. 30 billion a year to the national exchequer. Along with its allied industries, it provides a livelihood directly or indirectly to over 115,000 people. Buyers in Pakistan now have a choice of various domestically produced models of Toyota, Honda, Suzuki, Nissan, Kia, Hyundai and Fiat cars and vans, Mazda coasters and Hino-Pak buses. Between 30,000 and 33,000 tractors are also produced in the country annually, a major boost to the agriculture economy.

One can only hope then that these few people would put a stop to all these baseless and unsubstantiated accusations against Pakistan's auto industry and the auto assemblers. It is time critics and other self-centered factions realize the significance of the auto industry by virtue of its contributions towards the prosperity of Pakistan, and at the same time, acknowledge its success in fulfilling its commitments to the consumers, in terms of quality, service, value and delivery.