CORPORATE WINDOW: Auto sector\'s localisation discrepancies

Many countries, including India, have been trying to make in-road in the rising demand for electric vehicles (EVs). Meanwhile, in Pakistan, headlines blare the meteoric rises in car and bike prices due to the high landed cost of imported parts owing to rupee depreciation and low localisation. The issue of localisation is so complex that it is hard to judge it by the value of imported parts or by the number of parts in vehicles. Despite claiming higher localisation, assemblers have been giving multiple shocks in a month, citing rising raw material prices on account of the rupee’s fall against the dollar. No serious efforts have been made towards localising hi-tech engine parts as stakeholders focused more on cosmetic changes in the designs of bumpers and grills in the name of new models. A renowned financial consultancy firm hired by the Pakistan Association of Parts and Accessories Manufacturers (PAAPAM) has stated that car prices have jumped by 100-149 per cent in the last five years despite the 71pc rupee devaluation and the rise in parts’ prices by 33pc to 112pc.