Wattoo didn’t ask for reduction in car prices, says PAMA

[Naveed Yaseen]

ISLAMABAD: Pakistan Automotive Manufacturers’ Association (PAMA) on Friday denied that Federal Minister for Industry and Production, Mian Manzoor Ahmad Wattoo, directed the association to reduce car prices within 10 days.

A press release issued from PAMA revealed that the association rejecting some news reports alleging that the ‘Minister had asked the industry to reduce the prices as no such directions were given, which would in any case not be possible’, owing to the sharp increase in cost and that prices are determined by independent companies reacting to their individual cost structures and market requirements.

The release claimed that they held meeting in Islamabad yesterday with the Ministry of Industries chaired by the Minister of Industries. The association briefed the minister on the significant decline in volumes, which amounted to reductions in the overall market by approximately 50 percent year-on-year for the year ended June 2009. Though there is some marginal growth in certain segments in the first quarter of 2009; however, the continued law and order problems, high interest rates and a general reluctance of lenders to finance automobiles are still badly affecting the industry.

The industry informed the minister that in the last 16 months the rupee had devalued approximately 39 percent against the US dollar, while the Yen had appreciated approximately 63 percent as compared to the Rupee, leading to a significant increase in cost.

This has been possible because of the extensive localisation carried out by the industry which had enabled it to some what offset the sharp increase in imported inputs.

It was further explained that some of the recent price increases announced by the industry were significantly below the rupee depreciation experienced since July 2009 against the major currencies.

The industry, however, assured the ministry that with its considerable unutilised capacity it was able to fully meet the current and future demand. staff report

http://www.dailytimes.com.pk/default.asp...009_pg5_12