Local car assemblers have voiced severe worries about a new system adopted by the State Bank of Pakistan (SBP) for import of commodities, calling it a tremendous danger for the auto sector that might result in the shutdown of all major original equipment manufacturers’ output (OEM).
Abdul Waheed Khan, Director General of the Pakistan Automotive Manufacturers Association (PAMA), asked speedy permission of CKD imports in a letter to Murtaza Syed, Acting Governor of the SBP.
It should be noted that the State Bank has recently introduced a mechanism for prior approval from the SBP for the import of a number of goods for the issuance/improvement/amendment of a letter of credit, contract registration/amendment, making advance payment, and authorising transactions on an open account or collections basis.
Prior permission from SBP is also required for all import operations under HS Code 8703. (Category CKD of motor vehicles). The SBP’s new directions have caused consternation in the local car sector, which has sought the SBP to explain how the new system would harm the local auto industry.
According to the PAMA, this sudden procedural requirement has hampered the import of CKDs, and all significant auto industry imports have been interrupted. Abdul Waheed Khan issued a warning:
“The delay in processing approvals for CKD import transactions will lead to production shutdown for all major OEMs in the next week, which will disrupt the entire supply chain including local vendors, dealers, support entities and consequently lead to unemployment of daily wage staff and contract staff of the entire industry.”
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