Local auto industry is facing immense pressure of increased input costs, due to RD on steel, former chairman of PAAPAM, Aamir Allawala said. He said RD was imposed on imported products/raw materials that were available indigenously. "Pakistan is not producing auto grade/tensile steel still RD is imposed on it," he added. Allawala said that rupee depreciation also played a key role in increased cost of production as dollar had appreciated around 7 rupees in last one year.

"Government should ensure predictable and transparent policies as this was the only way to motivate manufacturers to invest more, increase capacity and attract new entrants," said Aamir. He said that recent retraction on misuse of imported used cars policy would hurt the industry's sentiments and gave a negative message to new entrants. "One imported used car deprive local vendor industry of worth 300,000 and last year only around 80,000 cars were imported causing loss of around Rs 24bn," said Aamir.

Furthermore he said that auto industry is employing around 2.5 million direct and indirect labors and had a lot more untapped potential which was linked to predictable and transparent policy. "The industry needs support from the government in terms of transparent and consistent policies to regain its lost status both at the front of utilization and production level," he said.

Copyright Business Recorder, 2018