By Ayesha Mudassar ISLAMABAD, May 26, (INP-WealthPk): Pakistan’s bill for vehicle kits, imported by local assemblers, increased by 78.75% during the first 10 months of the current fiscal year 2021-22. According to the data available with WealthPK, Pakistan imported completely knocked down and semi-knocked down (CKD/SKD) kits of vehicles worth $2.039 billion from July to April in the current fiscal as compared to $1.248 billion during the same period of last year. According to Engineer Asim Ayaz, the secretary of the Auto Industry Development Committee (AIDC), despite being an old industry, the sector has yet to achieve the targeted level of localisation as assemblers are still importing two-thirds of the auto parts for the vehicles being assembled in Pakistan. The country's import bill for vehicle kits is rising at an exponential rate with the gap between imports and exports reaching an alarming level. “The automobile imports form a significant portion of the import bill,” said Mr Ayaz. According to Pakistan Automotive Manufacturers Association (PAMA), assemblers are in high gear as the sale of cars increased by 51% during the first 10 months of the current fiscal. An increase in demand has led to a hike in the import of CKD/SKD kits. The automobile sector is one of Pakistan's fast-growing industries, providing employment opportunities to more than 3.5 million people and accounting for 3% of the country's GDP. It contributes around Rs50 billion to the national exchequer each year. Famous automobile companies like Honda, Toyota and Suzuki have been dominating the Pakistani market since long. They have carried out some local value addition by substituting the imported axillary auto parts with the local ones. New entrants have started rolling out vehicles from their assembly lines with only 5% locally-made parts, which is insufficient to ease the pressure on the foreign exchange. The import of auto parts increased by 37.72% from July to April of the current fiscal as compared to the corresponding period of the previous year, according to the Pakistan Bureau of Statistics. Mohammad Ayoub, who runs an auto parts manufacturing unit, said that country's foreign exchange was burdened owing to non-localisation of the automobile industry. He said that many assemblers did not prefer to buy auto parts from the local vendors for some of their newly launched models of vehicles. The auto industry largely depends on steel and plastic, which are imported from other countries. “The import of auto parts would decrease if Pakistan produces its auto-grade steel and plastic materials,” said Mr Ayoub. The import bill for CKD/SKD was $660 million in fiscal year 2017, $809 million in 2018, and $818 million in 2019. The fiscal year 2019-2020 was a difficult year for the whole country, or even the entire world, as industrial units were closed due to the Covid-19 pandemic. Resultantly, the CKD/SKD kits import bill for 2020 was only $478 million. Although Pakistan's auto industry has completed half a century of its existence, the assemblers have not made serious efforts for its localisation. People associated with this sector told WealthPK that concrete steps should be taken to encourage foreign investment in the automobile industry of Pakistan to create employment opportunities and increase foreign exchange reserves.