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KARACHI: Despite the ongoing development of an auto assembly factory in Hub for the release of Skoda and Volkswagen automobiles, the current auto players and vendors are paralyzed as a result of a serious lack of foreign currency and problems with the supply of parts.
The State Bank of Pakistan‘s Governor Jameel Ahmed was informed by the Pakistan Automotive Manufacturers Association (PAMA) and the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) in a joint letter on Thursday that the industry was on the verge of extinction because all supply lines for imported tooling, parts, and accessories are completely shut down as a result of SBP restrictions and banks’ lack of cooperation.
As a result, both the assemblers and their vendors are periodically closing plants and laying off employees. This situation would result in high unemployment rates, a reduction in tax revenue, the shutdown of auto assembly factories, and a capital flight if corrective action was not done.
According to PAMA and PAAPAM, direct and indirect controls placed on opening letters of credit are the main reason for the aforementioned industrial collapse.
The import of completely knocked-down (CKD) automobile kits decreased by 38% to $499 million in 1HFY23 from $808 million in the same time last fiscal year, according to data from the Pakistan Bureau of Statistics (PBS).
Dr. Rüdiger Lotz, the German consul general, paid a visit to the Premier Motors Ltd. automobile manufacturing (CKD) facility for Volkswagen AG vehicles on Wednesday (Balochistan).
According to a press statement, this partnership between PML and VW AG Group, which involves an investment of about $100 million, would represent the debut of locally built premium cars from Skoda and Volkswagen in Pakistan.
