PAMA flays CCP for flawed report on automobile industry

The Competition Commission of Pakistan’s (CCP) report of January 2013, on automobile industry, is arbitrary, unfair and distressful for the automotive sector, said Pakistan Automotive Manufacturers Association (PAMA) DG Abdul Waheed in an official response to the CCP.
While preparing the report, CCP did not realise that the figures it incorporated in the report would unduly damage the industry which contributes $ 3.6billion to the GDP and churns out $ 0.82 billion in revenues with an investment of $ 1.09 billion and direct employment to 215,000 persons, he said.
Waheed said the “auto Industry leads the large scale manufacturing of the country, hugely contributing to the country’s GDP and the revenues while bringing in long term local and foreign investments generating widespread employment opportunities and opening up avenues for the country to have high technology and attain modern systems from the outside industrial world,” he said.
He was grieved that notwithstanding the fact that the CCP itself did not even own its contents, given the disclaimer printed on the report, yet it chose to put it on its official website for public viewing that would result in ultimate disrepute to the industry.
Waheed said that the association was not taken into confidence while the report in question was being prepared and has expressed his dismay over the CCP’s report’s subjective findings and recommendations which, in his view, are highly damaging for investment and business environment of the country. In a letter to CCP Chairperson, Waheed said the report in question was flawed as it was not based on competition issues arising out from intra local automobile players. Instead, it drifts to draw a parallel between local industry with the illegal business of trader mafia of used cars whose primary source of activity emanate from illegal purchase of documents from an overseas Pakistani.
Such trading activity of used cars, which by no mean is comparable to brand new cars that are manufactured in Pakistan by the established industry with standardised operations and is also documented with its accounts published and shares traded in bourses of the country. In other words a car used for over 5 years abroad and imported in the country by an apparently illegal importer who does not keep any document for official scrutiny has been, unfortunately, taken as a basis for determining the competition issues by the CCP.
Such a report coming from a serious agency like the CCP is tantamount to promoting the trader mafia without realising the fact that it would irreversibly damage the industry and would result in shutting down the already traumatized downstream vending industry making thousands jobless.
Nowhere in the world has a country invited foreign investment in manufacturing goods locally and, at the same time, opening up its market for imports of used goods of same category as suggested by this report.
It would have been worthwhile if CCP had suggested measures to promote competition by attracting more investments and promoting further expansion and introduction of more models by local OEMs in order to encourage competition. He regretted that concurrent official support to used car lobby over the years has not only impeded the natural growth of the industry but is also a reason for its downturn and redundancies and closure of companies in the recent past.