January 26, 2007	Friday	Muharram 06, 1428

ISLAMABAD, Jan 25: The auto industry will invest Rs225 billion in the next few years to achieve a new target of 500,000 cars a year, generating more than 30,000 jobs. At the current rate, Pakistan by 2010 would make 500,000 cars a year and pay Rs100 billion in taxes, provided the government ensures a long-term and consistent policy to protect the interests of local industry and to attract fresh investment.

Briefing newsmen here on Thursday, director, corporate planning and customer relations, Indus Motor Company (IMC), Shah M Saad Hussain, said that the auto industry had shown an average growth of about 25pc per annum over the last three years.

During the fiscal year 2006-07, the growth is expected to be between 10 and 15 per cent.

The import of used cars, he said, was hurting both local car manufacturers and vendors, and it would also bring down revenue collection.

To a question, he said import of used cars was not a threat to local production. In countries, like India and Thailand, customs duty on import of used cars was much higher than Pakistan.

Sharp demand for automobiles in the last five years has been spurred by a positive economic outlook and political stability, he said.

Mr Hussain said the proposed policy should be framed in a way it protects the national interests.

He elaborated that encouragement of local production would help generate more employment.

The government had already worked out tariff structure under the new auto policy, which would be presented for approval at the next meeting of Economic Coordination Committee (ECC) of the Cabinet.

To a question, he replied that the price of cars depends on the localisation of the maximum parts of the cars. He said 35 per cent parts are still being imported for assembling local cars. Replying to a question, he said that the auto manufacturers are of the view that we do not have any law to control prices of cars.

He said there is an understanding to increase the local production in the next few years for its subsequent exports.

Until 2000 Pakistan had been producing around 40,000 vehicles annually, but production has grown four times to around 160,000.

He said after 9/11, purchase of cars had increased tremendously because of financing by banks and growth in economy.