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Sunday, May 19, 2024

PAMA Warns SBP of Automotive Industry’s Demise

The Pakistan Automotive Manufacturers (PAMA) and the Pakistan Association of Automotive Parts and Accessories (PAAPAM) have written a joint letter to the State Bank of Pakistan (SBP) as they expressed concerns over the future of the automotive industry in Pakistan.

Automotive Industry, Pakistan, SBP, PAMA
PAMA Warns SBP of Automotive Industry’s Demise

According to the letter, the PAMA and PAAPAM warned the Governor of the State Bank of Pakistan (SBP) that the automotive industry in Pakistan will die as a consequence of the central bank’s restrictions and lack of cooperation by the banks.

The letter highlighted the importance of the automotive industry, which remains the second highest contributor of tax revenue for the country and comprises of over 20% of Pakistan’s manufacturing sector.

However, the recent restrictions on opening of Letter of Credit (LCs) has significantly impacted business for the automotive sector and factories keep shutting down from time to time, which eventually leads to termination of workers.

The letter added that Pakistan’s automotive industry has achieved 80% import substitution and helped saved millions in foreign exchange on an annual basis. However, the restrictions imposed on the opening of LCs will result in mass unemployment and loss of foreign capital for the country, which means loss of the government’s revenue.

The PAMA and PAAPAM requested a meeting with the Governor of the State Bank of Pakistan (SBP) in order to submit their proposal and find a solution to save the automotive industry.

Meanwhile, Premier Motors Limited (PML) is busy constructing an assembly plant for Volkswagen and Skoda vehicles in Pakistan.

Read more: Volkswagen and Skoda Vehicles Launching Soon in Pakistan.

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