April 8, 2006	Saturday	Rabi-ul-Awwal 9, 1427

ISLAMABAD, April 7: Pakistan has decided to introduce tariff based system (TBS) for local automobile industry from the next fiscal year rather to seek further waiver for the continuation of deletion programme under the agreement on Trade Related Investment Measures (TRIMs).

Officials told Dawn on Friday that in this regard, the Engineering Development Board (EDB), Customs department along with vendors and auto-assemblers had worked out a comprehensive tariff regime to be applicable on import of parts and accessories for automobiles.

The officials said that a preliminary meeting was held recently to discuss the issue with Minister for Industries Jehangir Khan Tareen in the chair. It was attended among others by representatives of Suzuki, Honda, Indus Motors and Dewan Farooq Motors.

A group of professionals including government and private sector representatives will leave shortly for South Africa to do in-depth study of the rules and regulations of the motor industry development plan.

The officials said that the meeting was informed that the government had decided to move away from a penalty- driven localization policy to a policy, which gave incentives for local value addition and export of auto- parts and completely built units (CBUs) from Pakistan.

According to the officials, these tariffs will be finalized following extensive deliberations with all stakeholders, and would be announced in the budget of 2006-07.

Following the implementation of the proposed tariff regime for the auto sector from the next fiscal year, the officials said, auto industry would be free to source its components from where it finds these economical and that the manufacturers would not be forced to buy from any specific source.

Elaborating on the proposed tariff regime for the automobile industry, the officials said that a high tariff protection would be extended particularly, to the vendor industry, engaged in the production of parts and accessories for automobiles.

These officials said it was also under consideration to keep uniform rates for parts and accessories at import stage to discourage their imports particularly, from China and Korea.

According to the officials, it was also being considered that those parts and accessories, which were not manufactured locally, would be subjected to lowest tariff in the range of 15-20 per cent in order to reduce the cost of the cars.

Talking to Dawn after the meeting Chief Executive of Pak-Suzuki Kenichi Ayukawa said that there was a need for a long-term auto policy at least for a period of five years.

He said that under the proposed TBS system, the tariff on locally produced products would be high while low tariff would be applied on those products, which were not manufactured locally.

When asked that why the auto manufacturers had not transferred major technology to Pakistan, Mr Ayukawa said that the transfer of technology needed a bigger market. He went on to say that for localization there was also a need for extensive training of the vendor sector.

He, however, said that the automobile manufacturers would be expanding their production in the years ahead. To another question, he said that the booking period for Mehran car had now been reduced to a period of three months. However, he alleged that delay also occurred because of poor means of transportation from Karachi to up-country.

Mr Ayukawa thought that the schemes announced for the overseas Pakistanis were misused for commercial purposes.

To another question, he said that the CBR had introduced a new concept of regularising the duty free cars.