Tuesday Mar 16 2021

Over 50% increase in price of plastic affecting auto parts makers: report

  • Former chairman of PAAPAM says that price of plastic granule has increased by over 50% price in the last three months.
  • Mashood Khan says post coronavirus lockdown, the situation was yet to turn normal as the price of the major raw material is increasing.
  • Khan says part manufacturers yet to benefit from arrival of new big players in country.

KARACHI: An over 50% increase in the prices of plastic granule in the last three months has led to an increase in the cost of auto parts production causing a significant decrease in the profits of the small and medium vending companies, industry officials told The News.

Former chairman of Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) Mashood Khan told the publication that plastic granule, a major raw material for them, has seen an increase in the price of over 50%.

Khan said that the rate of the product varies, saying a kilogram is available for Rs2,500, Rs3,000. He added that the price varies as the product comes in various categories. 

Read more: Pakistan records 31% increase in car sales in February

Due to an increase in the prices, the spare parts industry is suffering, as their orders are declining owing to the higher rates being transferred on to the consumer.

The director of Mehran Commercial Enterprises said small and medium enterprises were going through a survival period triggered by the coronavirus lockdown. He added that the situation was yet to turn normal as the price of the major raw material is increasing.

“When the lockdown was over, there were issues of shipping and logistics. The material was not available but we faced it. However, now prices of raw material are being increased by three to four times in a month,” he said. 

“From February 1 till mid of March, prices have increased thrice,” he told the publication.

The small and medium enterprise sector mostly purchases the raw material from the local market and very few of them are imported.

Read more: Car manufacturers seek clarity on incentives for new entrants

During the issues related to the shipping line when ships were not arriving, raw material supply for plastic granule also got affected.

Talking about the auto policy, Khan said the government had given licences to 20 new companies of which, around four big players have arrived.

“Government objective was achieved successfully with their arrival, whereas, parts manufacturers have yet to get benefit from it,” deplored Khan.