The automobile sector of
Following the directives given by the government to stop the spread of coronavirus, a majority of automobile manufacturing plants have halted production and have remained closed since
Speaking to
Earlier, in the first eight months (Jul-Feb) of current fiscal year, automobile sales dived 44% to 90,834 units compared to 162,240 units in the same period of previous fiscal year. On the other hand, sales of trucks, motorcycles, jeeps and pickups also fell in the period under review.
'More than a million people are directly and indirectly employed in the automobile sector, hence, we request the government to draw up a separate bailout plan for this sector,' Shaikh said.
He suggested that under the package, the government could eliminate the turnover tax for the ongoing year and slash utility bills to half from February to
He also requested the government to cut import duty to 10% on completely knocked-down (CKD) units for February to
'We also propose a reduction of 75% in withholding and income taxes applicable to manufacturers, authorised dealers and showrooms from February to
His comments came as Prime Minister
'The present situation is like a natural disaster, which has added to the woes of auto sector,' said
'Despite going through difficult times, the sector has not laid off its direct employees although jobs of vendors (indirect employees) have been lost in large numbers,' he said. 'It is unclear how the industry players will react during these times.' The analyst cautioned that axing jobs would have an adverse impact on the image of the entire industry.
Prior to the outbreak of coronavirus, the rupee devaluation was the main reason behind the deteriorating situation of the auto sector as it turned auto parts and raw material expensive, thus raising the cost of production of carmakers. Initially, the companies bore the additional cost, however, later they passed it on to customers, which severely impacted their sales.
In addition to that, a steep interest rate hike had also gravely impacted the automobile sector as car leasing became costlier, which discouraged people from purchasing vehicles.
© Pakistan Press International, source