KARACHI: Pakistan Automotive Manufacturers Association (Pama) has raised concerns over the recent valuation of motorcycle parts, saying it will hurt the interests of Original Equipment Manufacturers (OEMs).

The Pama director general has written a letter to DG Customs Valuation, complaining that the recent valuation ruling No 685/2014 dated September 15, 2014 was enforced without taking OEMs on board, said a press release.

The new Import Trade Prices (ITPs) regarding motorcycle parts of Chinese origin by the Customs authorities have seriously endangered revenues to the government, OEMs’ investment, employment base, and foreign exchange to the country.

Customs authorities re-evaluated the ITPs of motorcycle parts recently that gave commercial importers huge concessions, up to 400% against the values determined for OEMs, the release said.

Local parts makers say said that this revaluation was unnecessary because the official prices of aluminium alloy set by the London Metal Exchange have increased.

It is beyond comprehension why the Customs instead of increasing, decreased the ITPs to such a level, they said.

The local parts manufacturers cannot survive this re-evaluation because their process of aluminium made parts include material cost, hardening and casting, machining, testing, assembling, and overheads/profit margins.

Whereas, the commercial importers do not have to go through this procedure, and to top this, they have this reduction in ITPs, which is a huge injustice to local parts manufacturers, the release said.

The comparison of prices of parts after the Customs valuation clearly suggests that Carburettor will have 177% devaluation in price for commercial imports against the OEMs’ manufactured prices of the said component, it added.

Similarly, CDI unit will have 321% devaluation; cylinder head 146%; ignition coil 123%; insulator carburettor 206%; main shaft and counter shaft 227%; magneto 154%; piston 155%; rectifier regulator 197%; ring for piston 150%; spark plug 317%; and valve inlet/exhaust 400%.

OEMs believe that Customs authorities should know that the price difference for both branded and non-branded parts may not be more than 25% to 30% as the same material, same machine, and same process are being used in manufacturing of the part.

The letter said that positive efforts will not only increase government revenue but will also help encourage investment, increase employment and save valuable foreign exchange.