Auto Industry has the potential to play a vital role in reviving Pakistan’s economy as auto sector and its allied units provide employment to over 400,000 workers in the country. However, many factors like high interest rates, imposition of five percent excise duty, withholding tax and increase in sales tax & electricity tariff, galloping inflation and economic slump etc. are badly hurting auto industry due to which about 150,000 workers have been laid off by the auto vendors and assemblers in the last few months. Therefore, government should immediately come up with a rescue package for auto industry to arrest its further decline and rising unemployment in this sector which will create many social and economic problems. This was observed by Shaban Khalid, Acting President, Islamabad Chamber of Commerce and Industry in a statement.
ICCI Acting President said Pakistan’s automotive sector had recorded impressive growth over the past few years and in view of rising demand for its products & better future prospects, auto sector businessmen had made long term heavy capital investments in plant & machinery, acquisition of latest technology, R&D as well as expansion in existing capacities. However, alarming decline in demand of cars due to recent recession has hit them hard due to which they are in troubled waters as they have to pay much higher interest on loans which they had initially taken on much lower interest rate. Therefore, he urged upon the government to provide some relief to auto sector businessmen in the form of reduction in interest on loans which had started before the interest rate hike so that they could survive in the current crisis.
Shaban Khalid said in world markets, auto sector is considered as a major driver of economic growth and business activities as it deeply impacts the economy. He said about 20-30 percent workers are feared to be laid off in the next few months in case the slowdown in our auto industry lingers on, therefore, it is high time that government should take notice of auto industry woes for urgent remedial measures. He said Pakistani auto industry has made great achievements in the fields of local manufacturing and market shares during last decade, as 25 auto manufacturing companies have been producing and assembling cars, LCVs, trucks, buses, motorcycles and tractors. Therefore, he called upon the government to make long-term and investment friendly policies for the promotion of auto industry so that this industry could play a more significant role in the development of country’s economy.