According to the letter, PAMA and PAAPAM have warned the Governor of the State Bank of Pakistan (SBP) that the automotive industry in Pakistan will collapse as a result of central bank restrictions and lack of cooperation from banks.
The letter highlighted the importance of the automotive industry, which is the second largest contributor to tax revenue for the country and comprises more than 20 percent of Pakistan’s manufacturing sector.
However, the recent restrictions on opening letters of credit (LCs) have significantly affected business in the automotive sector and factories have been closing down from time to time, resulting in layoffs of workers.
The letter added that Pakistan’s automotive industry has achieved 80 percent import substitution and has helped save millions of foreign exchange on an annual basis. However, restrictions on opening of LCs will result in mass unemployment and loss of foreign capital for the country, which means loss of government revenue.
PAMA and PAAPAM requested a meeting with the Governor of State Bank of Pakistan (SBP) to present their proposal and find a solution to save the automotive industry.
Meanwhile, Premier Motors Limited (PML) is busy building an assembly plant for Volkswagen and Skoda vehicles in Pakistan.
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