Table of contents list of acronyms
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- Niazi and Bhatty (
| 1.3. REVIEW OF LITERATURE The Asian Development Bank (2008) while conducting an assessment of the private sector’s role and performance in manufacturing, infrastructure development and the services sectors observed that the automobile sector is, mostly private sector owned, is moderately sized with 18 automobile assembling units setup as joint ventures. There are also 47 units producing motorcycles. Its contribution to GDP and employment is also moderate compared to other Asian economies who have exploited the catalytic role of the automobile industry in promoting broad based manufacturing sector growth. This is due to a variety of causes one, it continues to remain protected with high import duties and can thus be seen to be a rent seeker two, it limits entry three it is uncompetitive; four, the deletion programme provides non-tariff based protection to both domestic assemblers and producers of parts and components. As a consequence, ADB concludes that these policies discourage domestic and foreign competition and allow for small, inefficient yet profitable domestic automobile producers. The Bank further 1 See Nagao, Hirofumi (2007) 13 suggests that without structural change and the development of core competence and efficiencies to develop the value chain end-to-end, it might not be possible for an efficient Pakistani automobile sector to emerge at this stage. The Bank also proposes that a Technical Assistance effort should be mounted to help bring about the transformation needed for ensuring the exploitation of the potential catalytic role of the industry. The Niazi and Bhatty (2011) study is based on a survey of a selected sample of assemblers and upstream vendors. The study finds that the assemblers and parts vendors are unable to achieve capacity production for various reasons one, institutional, technical and financial inability to adapt to frequent changes in body design two, inconsistent and adverse government policies which disincentivise investment three, non-competitiveness and the small volume of sales four, power outages five, insecurity of law and order six, high rates of inflation and the decline in the dollar/yen parity with the Rupee. The study also finds that vendors can improve performance if the principals arranged the following one, financing for diversification and growth two, provided technical support three, undertook rigorous quality control procedures and, four, training was provided in computer aided design and development of new parts. Download 0.77 Mb. Share with your friends:
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