KARACHI: Car stakeholders appear highly upbeat over Prime Minister Imran Khan’s announcement regarding the option of ‘Roshan Apni Car’ for overseas Pakistanis who have opened Roshan Digital Accounts (RDAs) that recently crossed the $1 billion mark.
“Now RDA holders can avail financing under Roshan Apni Car at very attractive terms to purchase a car for their loved ones in Pakistan. Banks are offering both conventional and Islamic modes of financing at attractive mark-up rates starting from seven per cent with priority delivery,” PTI Senator Faisal Javed Khan said on social media platform Twitter.
Though complete details are still unavailable, however auto industry stakeholders appear excited over the PM’s initiative.
Talking to Dawn, Indus Motor Company (IMC) CEO Ali Asghar Jamali said he was present at the unveiling ceremony of Roshan Apni Car and Roshan Samaji Khidmat schemes.
“I have informed the Prime Minister that IMC will deliver cars to the overseas Pakistanis in just one month,” he claimed, adding that the car scheme would make a positive impact on large scale manufacturing.
CEO Master Changan Motors Limited, Danial Malik said “it is a very positive step for the overseas Pakistanis. I support the vision of Prime Minister Imran Khan regarding Roshan Apni Car.”
He said this step would increase car production by at least 2-3pc. “Our company will coordinate with the banks to facilitate overseas Pakistanis in getting new cars.”
Former chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers Mashood Ali Khan said the PM’s decision to facilitate overseas Pakistanis through the car scheme will boost car production by at least 10pc and will also augur well for employment generation at the manufacturing and vending industries.
According to a press release of State Bank of Pakistan (SBP), Roshan Apni Car has been specially designed for overseas Pakistanis and has many distinguishing features. For the first time in the history of the banking industry, an RDA holder will be able to apply for car financing for their loved ones in Pakistan completely digitally. The SBP said processing time will be fast. Financing and insurance will be available at very attractive rates, and in both conventional and Shariah compliant forms. Moreover, car manufacturers have committed to significantly slashing the car delivery time for RDA holders.
An analyst at Sherman Research said that apart from amnesty schemes in past, this is the first time in the country’s history that any government is willing to extend expatriates a gesture of acknowledgment for their precious support towards increasing dollar reserves of the State Bank of Pakistan (SBP) via remittances.
For this, the government in collaboration with the SBP has launched ‘Roshan Apni Car’ scheme which will facilitate non-resident Pakistanis (NRPs) to purchase cars on lower price.
Overseas Pakistani may find this scheme attractive as currently banks are charging 12-13pc on car financing. This will reduce cost by 20pc on car financing, the Sherman analyst said. He said the Pakistani car market may attract $200-300 million over the next two years. This is based on an analysis that 10pc of funds which are being parked in deposit accounts in RDAs will be utilised for purchase of local cars.
According to SBP, currently nine million Pakistanis are residing abroad, out of which around 0.12m have opened RDAs in last eight months. So far, NRPs are maintaining average account size of $8,300 out of which 65pc is allocated to Naya Pakistan Certificates (NPCs), 25pc in shares market (PSX) while rest is allocated in deposit accounts.
Assuming 15-2pc of overseas Pakistani families’ open RDAs during next two years and divert 10pc of the funds towards automobiles, local car market may attract $200-300m during next two years. Interestingly, in just eight months, Pakistan has attracted around 8pc of potential families living abroad to open RDAs which is a big achievement, the analyst said.
Pakistan’s annual car sales are estimated to be over 180,000 units with market size of Rs550bn ($3.5bn) while average per car value (including taxes and FED) is around Rs3m (Rs5.3m including car financing on five-year terms). Overseas Pakistanis have potential to buy 10,000-13,000 cars per annum during next two years. Annual car demand may increase by 5-7pc which is positive for local car assemblers, he said.
Published in Dawn, April 30th, 2021