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Long-term auto policy

November 15, 2012

WHILE addressing a gathering recently after inaugurating an automobile assembly plant in the vicinity of Port Bin Qasim at Karachi, the prime minister informed the gathering that the government is working on a long-term auto-industry policy.

He said further that the government was ready to support experimental and innovative vehicles in order to make vehicles available to the common man.

Indeed, this is good news for entrepreneurs, as well as for customers. However, it is worth mentioning that in the past there had been several attempts at the federal level to bring in innovation and attract foreign investment to the automobile sector.

However, efforts have remained patchy and fraught with inconsistencies in government policies that further deprived the auto mobile industry of infrastructure essential for making any significant headway in this direction.

If we look at automobile sectors of India and Indonesia, the automobile industry in both the countries has grown manifold in the past few years.

According to data released by the Society of Indian Automobile Manufacturers (SIAM), India’s domestic growth in the auto sector during April alone was 9.94 per cent whereas the passenger vehicle sales in India rose to 11 per cent in June.

Further, SIAM has projected car sales for FY 2013 to nine to 10 per cent, which is yet impressive and almost double of their economic growth rate of 5.6 per annum.

Considering the remarkable growth of the Indonesian market in recent years, Japan’s Toyota group recently announced an investment package of $1.3 billion to expand its production in Indonesia.

The investment will not only create 9,000 new jobs, but will also bring in latest technology with ownership rights to Indonesia to further expand the automobile sector domestically.

Now the question is whether the government of Pakistan can introduce a long - term auto mobile policy, which is overdue. Moreover, no auto mobile policy will be considered beneficial to the country without giving due consideration to the road infrastructure in the country. With poor road network and narrow streets under encroachments, the insensible increase in the number of cars on the road will make life of commoners’ difficult.

Furthermore, the automobile policy in the absence of a regulatory mechanism to control the vehicular emissions will play havoc with the health of citizens and will be equally bad for the environment.

I hope the prime minister will ensure that all prerequisites are in place before the announcement of the long-term auto policy.