LAHORE: The participants of a seminar have asked the Original Equipment Manufacturers (OEMs) to pass on at least 10% of net profit to the vendors, besides re-evaluating all frozen variables of cost, as the parts manufacturers are gaining no benefit instead facing huge losses due to high production cost amidst rising energy prices, constant hike in markup rate and the mounting cost of raw material. The OEMs only increase the rates of materials, leaving all other variables frozen. The well-established principle of economics that, in the long run, fixed costs become variable has never been addressed by the OEMs, leaving their business partners in the lurch. This inequity has led the vending industry to dwindle its working capital to nil.

This seminar was arranged by the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) as advised by its Executive Committee, under professional consultation with M/S UHF, on ‘Identifying business challenges way forward ’ to assess their financial health and profitability of the businesses. The members from various cities of Punjab joined the event, despite abnormal weather conditions to pack the hall. The tremendous turnout showed the quantum of gravity and unity. The charged members were one voice to resolve that the OEMs should pass on at least ten percent profit on invoice value to vendors; ensure indexing of frozen variables; indexing within 15 days whenever a variance of +-5 percent occurs. The participants emphasized that the matter affected vendors across the board that required the immediate intervention of PAAPAM.

Besides PAAPAM Chairman Abdur Razzaq Gauhar, the session was addressed by PIEDMC Chairman Mr. Nabeel Hashmi, Ex chairman PAAPAM Usman Malik, Capt (r) Muhammad Akram, CEO M/S UHF Consultants Faisal Jalal, Convenor 2-3 Wheelers Mohammed Nasim, and Convenor Tractor Committee Irfan Qureshi. Other participants, representing car, tractor, and motorcycle sectors, expressed their grave concerns over the squeezing profit margin of auto parts suppliers of the OEMs in Pakistan.