LAHORE, July 29: The government decision to allow new entrants in the automobile industry to import 100 per cent CKD (completely knocked down) at 35 per cent customs duty for three years as well as to liberalise import of used cars, drew severe criticism from a major local car maker.

“The recent changes in the automobile import policy are a negation of the government’s own policy of value addition through manufacturing and technology transfer,” said Yusuf H Shirazi, chairman Honda Atlas Cars on Saturday.

“We welcome new entrants for healthy competition, but on a level-playing field. Any decision to the contrary will not only jeopardise the investment made in the industry or that in the pipeline, but will also cripple the industry to the detriment of the growth of large scale manufacturing sector in the country,” he added.

He said the OEMs (original equipment manufacturers) were investing Rs11 billion, with Honda alone investing Rs3.5 billion this year, in capacity expansion, and vendors another Rs5 billion in view of future market growth. The car market has increased to over 155,000 units from 40,000 in 2002 with the expansion of the national economy.

He maintained that the protection provided to the local automobile industry in the entire South East Asia was said to be 156 per cent against the import of used cars and 100 per cent against import of CBUs in addition to various non-tariff barriers like quality and emission control.

He called upon the government to provide suitable protection to the local industry as was being done in the US, Europe and India to encourage local investment, production and employment. It was a misconception that the WTO or Safta stopped any government or country from protecting the local industry, he said at the launch of a new car on Saturday. The Others who spoke at the launching ceremony included M Takedagawa, operating officer Honda Motor Company, Japan.

The new Civic car launched with four different versions is available in the price range of Rs1.329 million to Rs1.499 million.