LAHORE, Jan 21: The government is working out a detailed plan to boost the local sales of automobiles, says Commerce Minister Abdul Razak Dawood.
Talking to newsmen here at the Smeda office on Monday after an Engineering Vision Steering Committee meeting, he said the government was “looking at its deletion policy for the automotive sector and reviewing taxes and duty structure to boost the local sales of cars.” Moreover, he added, the leasing sector would also be encouraged to set aside more funds for car leasing to increase their sales.
However, he ruled out the possibility of increasing exports of automobiles at present, saying it was “too ambitious” (an idea to execute).
He said the government would rather focus on improving exports of auto parts, motorcycles and tractors.
Pakistan’s auto parts exports more than doubled to $25 million during the last fiscal year from $12 million in 1999-00. “We have set a target of $35 million for the current financial year, though we are not sure as to how much of it would be achieved at the end of the year,” added the minister, who was accompanied by Steering Committee convener Almas Hyder at the conference.
The US terror attacks on Sept 11 and the events following them are likely to impact adversely on the autoparts exports.
The minister said there had been little or no growth at all in different segments of automotive sector in the last five years.
He said the automotive industry had attained about 50 per cent deletion in cars, 83 per cent in motorcycles and some 92 per cent in tractors. He said deletion of high tech parts like engines was possible only if the industry achieved a high level of volumes.
He said the engineering vision would be completed by March and presented to the president for his approval. “Once the vision has been completed, we will take necessary decision to implement it,” he added.
The steering committee for developing the vision was formed in August. As many as 11 sectoral committees comprising representatives of the private sector were constituted to draw up recommendations for the development of their respective sectors.
EXPORTS: The minister expected a “shortfall of $1 billion in the export target of $10.1 billion” for the current year. He said the export figures for the first half of the fiscal year showed 0.5 per cent increase over the first six months of the last year. If the same trend continued in the next six months, the country would be able to touch the figure of $9.2 billion at the end of the year.
He said several factors — slowdown in the world markets, Sept 11 incident, Indo-Pakistan border tensions, strengthening of the rupee against the dollar, some of them — were to blame for the low export earnings than was expected.
He said there was no “restriction on exports to Afghanistan in rupees as it didn’t involve refund of duty drawback.” Besides, he said, the government had removed hitches in export to Afghanistan in “dollars and enhanced the number of items on the positive list of items to 32 allowed to be exported to Afghanistan. He said the number of items would shortly be enhanced to 50 and eventually we would like to have a negative list”.
The minister was “hopeful that Pakistan’s talks with the US administration on trade concessions and market access would bear fruit”. “We are still in constant contact on the issue with the US trade officials.”
