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ECC moot on auto industry policy

October 27, 2013

KARACHI, Oct 26: A committee of the Economic Coordination Committee (ECC) will hold the first meeting of auto assemblers and vendors on Monday in Islamabad to finalise the Auto Industry Policy (AIP).

The committee also invited Chairman All Pakistan Motor Dealers Association (APMDA), H M Shahzad, who represents used car dealers, in the meeting.

The ECC in its meeting on October 2 set up a committee comprising Minister for Water and Power (Convener), Chairman Board of Investment (deputy convener), Secretary Industries and Production, Chairman Federal Board of Revenue (FBR), and Chief Executive Officer EDB to finalise the AIP draft within a period of 45 days and submit the same to the ECC. The Monday meeting will be held in the office of Minister for Water and Power.

Director General Pakistan Automotive Manufacturers Association (PAMA) Abdul Waheed Khan told Dawn that the auto sector mainly the car industry could not revive since 2008 as volumes and employment declined leading to unemployment and idle production capacity.

Besides, clearance of 86,000 used cars and other vehicles and 54,000 vehicles under amnesty schemes in the last two years had taken away market share of the local industry. “We need a sustainable growth and volume oriented policies which can encourage assemblers and vendors to make future investment, achieve localisation and open new job avenues,” he said, adding that there is a dire need for a consistent auto policy and the government must ensure that it would not make any frequent changes in it as it had happened under the previous government.

Waheed said that there is a dire need to check misuse of used car imports policy which has been hijacked by the used car dealers.

The PAMA chief said the auto sector had already submitted its suggestions and proposals for auto industry policy in May 2012 and again in May 2013. By realising the problems of the local industry, he urged the government to announce the new policy based on the recommendations already submitted.

Chairman Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) Usman Aslam Malik expressed surprise over the government’s decision of calling used car dealers representative in the October 28 meeting.

He told Dawn that “we need a policy which will improve sales, localisation and technology and it can only be achieved by facilitating and incentivising local assemblers under a long term policy.” He added that Paapam does not believe in imposing ban on used cars but the government strictly monitor and check its misuse by the used car dealers.

The APMDA chairman said that the local car industry has failed in achieving localisation targets despite the fact that Pak Suzuki entered in Pakistan some 30 years back while Honda and Toyota were also 20 years old.

He said local industries were set up to provide affordable cars and achieve localisation targets but nothing of these objectives was achieved.

He added that some parts were deleted in the sixties but a single functional engine parts, gearbox or electrical parts is manufactured by the vendors. Under the Tariff Based System, parts were imported from third countries like Thailand, Malaysia, China, Singapore etc.

Shahzad claimed that prices of locally assembled cars had been increased by 100 per cent in the last four years alone on the rupee devaluation against Yen and other currencies.

He said that last year around 170,000 vehicles were produced on which the assemblers took 100pc advance payment and delivered cars in two to four months. Taxes were transferred to the government at the time of delivery.