Thousands of workers sent home amid plummeting sales, claim auto vendors.

Byline: Aamir Shafaat Khan

KARACHI -- Vendors have shown exit doors to thousands of daily wage workers, outsource employees and contractual workers from July until date following massive decline in sales in the overall auto sector.

Pakistan Association of Automobile Parts and Accessories Manufacturer (Paapam) Chairman Capt (retd) Mohammad Akram told Dawn on Saturday that he had received feedback from association's 400 members across the country regarding layoffs of around 40,000 people in view of the steep fall in parts procurement by the car and other auto assemblers after massive sales drop.

He said there are around 1,500-2,000 other small and medium-size vendors who supply parts to the aftermarket. 'I think they are not hit hard as aftermarket is going quite strong. We [Paapam's] 400 vendors supply parts to the auto assemblers exclusively.

'I see more joblessness in case the sales slowdown continues in the next two to three months,' Akram feared while adding that the axe may also fall on permanent workers in the next phase of layoffs. He said the 1QFY20 had already ended in red for the entire auto sector while sales are likely to remain depressed until December.

On rising vehicle prices - especially cars, he cited low localisation in vehicles as one the main reasons. 'What assemblers claim of achieving high localisation is wrong, I can prove it,' he said while adding that higher localisation would definitely have averted frequent increase in prices of cars on falling rupee against the dollar.

Akram also complained that assemblers have been persistently increasing vehicle prices but they hesitate in passing on price increase to vendors for parts procurement.

Former Paapam chairman Munir Bana said he had fired up to 300 employees (daily wage workers, contractual, supervisors etc) from July till to date. He added that contracts of those employees who over the...