Auto parts vendors demand price increase on pro-rata-based formula
Business
PAAPAM perturbed over not passing on profit by OEMs, demand deletion programme execution
LAHORE (Web Desk) - The Pakistan Automotive Parts and Manufacturers Association of Pakistan (PAAPAM), in an overwhelming convention held the other day, showed immense concerns for the sustainability of auto parts industry operations.
The parts makers looked exasperated for not transferring the price increase by the Original Equipment Manufacturers (OEMs), who had continually been charging high from the end users. They demanded the OEMs a price increase on pro-rata-based formula.
The former finance minister of Pakistan, Dr. Salman Shah, said the government had failed to establish a sustainable model of industrialization. He advised the parts makers to stop looking toward OEMs and the government for support and rather get technologies and develop partnerships to achieve excellence in parts manufacturing and not be captive of any particular sector.
Several other industry and financial experts also addressed the PAAPAM members to seek ways of survival in this grey arena.
PAAPAM Senior Vice Chairman Usman Aslam Malik said it was imperative to join the grey-heads to brew the collective wisdom to chalk our way forward. He said exporting companies were also facing problems in supplying to international customers due to the non-availability of raw materials.
Usman Aslam Malik also emphasized the government to bring major changes in the auto industry development plan 2022- 26, making it mandatory for assemblers to export a certain percentage of vehicles and parts. He demanded the execution of the deletion programs in letter and spirit with monitoring mechanisms be brought back through amendment in AIDP.
The SVC assured the members that the PAAPAM stood shoulder to shoulder with its members in these difficult times being faced by part manufacturers for opening LCs for raw materials.
Mirza Tahir Baig, the MC member of the Association of Overseas Technical Cooperation (AOTS), offered engineers and management professionals capacity-building programs. Former Chairman PAAPAM and Director EDB Syed Nabeel Hashmi emphasized PAAPAM members diversify to explore the non-traditional markets for their products if they wanted to survive.
Another former Chairman, Mr. Mumsad Ali, briefed the PAAPAM members about the cost-cutting measures to survive in the current hyperinflationary circumstances and economic uncertainty. Chairman Engineering Development Board (EDB), Almas Haider, also suggested diversification and exploring the non-traditional export markets instead of depending on any particular segment.
To him, the African and Iranian markets were the best emerging places for our parts. They suggested that the auto parts makers focus on swaps to manage the import restrictions. The government was no longer able to meet the requirements of the entrepreneurs.
The Chairman of the Rastgar Group of Companies, Imtiaz Ali Rastgar, also emphasized not depending upon OEMs and diversifying for the business. He said the vendors had a lot of derivatives for diversion. Parts makers could make any engineering item and export that, he added.
Immediate past Chairman (PAAPAM), Abdur Razaq Gauhar, detailed the efforts to diversify the auto parts manufacturing to engineering goods manufacturing which looked at everybody's desire in the house.
The house adopted a resolution to approach the OEMs for the slopping price increase in the percentage whenever they increased the prices.
