ISLAMABAD, Nov 15: The government has approved the Auto Industry Development Programme (AIDP) to provide a predictable and transparent investment opportunity.

The Economic Coordination Committee (ECC) of the Cabinet which met on Tuesday cleared a summary on the subject submitted by the Ministry of Industries, Production and Special Initiatives.

The ECC termed the AIDP as a clear roadmap which will lead the auto industry to a sustainable, innovative and competitive development and to enable the industry to attract investment and become a part of global supply chain.

The AIDP has been developed by the Engineering Development Board (EDB) to facilitate and encourage the investment, domestic competition, enhance competitiveness and stimulate innovation through technology acquisition, human resource development, capacity expansion, auto cluster development etc.

The programme is based on the principles which include: encourage continuation and increasing indigenisation; and facilitate auto industry’s integration into the global supply chain and the used vehicles import policy will be regulated so as not to impede the growth of the local industry while protecting consumers’ interest, an EDB announcement said on Thursday.

It provides the targets and goals and a clear development programme through a roadmap for the next five years, realising that the rapid growth in auto industry is difficult to sustain without efficient human resource.

In order to fill the deficiency of skilled personnel, an Auto Industry Skills Development Company (AISDC) will be established to be jointly managed by a board with representatives from industry and the government. Two centres of excellence will be established under the management of AISDC.

Productive Asset Investment Incentive (PAII) provides incentives against the newly-installed productive assets to stimulate investments in the production capacities of auto part manufacturing and to optimally utilise such capacities through supply of output to the vehicle assemblers in the country.

Since technology level remains low in the auto parts manufacturing due to high cost of technology acquisitions and to enhance the technology level, quality and encourage further localisation, matching grants will be provided under the Technology Acquisition Support Scheme.

Furthermore, to complement mutual support and synergy of the vendors, the AIDP provides the establishment of two auto clusters one at Lahore and Karachi each for which the government has already acquired land. AIDP also provides for Auto Industry Investment Policy (AIIP) for the investors to start manufacturing of vehicles in the country.

An Auto Industry Development Committee (AIDC) will be established with the objective to provide focused and continued attention to the auto industry at a government–private level. It will have a regular dialogue and effective communication with the industry and it will steer the implementation of AIDP and conduct an assessment and review of the policy initiatives of AIDP annually and up to 5 years to evaluate the effectiveness of AIDP.