7 points Pakistani Government must consider in the upcoming auto policy

AIDP

PakWheels is Pakistan’s voice for everything automotive, and ever since government began to form committees to discuss and draft the new upcoming automotive policy, the automotive enthusiasts, buyers, sellers, and consumers were sidelined once again from the table and the only influence exerted upon the government’s committee while drafting the policy was by the automotive lobby of Pakistan and a few influential used car importers.

The traditional media outlets, though have many reporters, and they report on the developments of the automotive industry, but none actually write or voice their opinions or provide critical analysis. They are mostly stuck around covering dharnas, etc, rather than doing a constructive analysis or critique which is reasonable for the government to include in legislation.

The new automotive industry development policy (AIDP), commonly referred to as the auto policy is just around the corner, and the automotive industry’s lobby is in top gear to influence it and though we, the automotive enthusiasts and consumers, can’t invest in an active lobby voicing our concerns and suggestions for the AIDP in the corridors’ of power, least we can do is share them here, so I urge you to share relative and good points as well or email me and also correct me if I am wrong. We have to be noisy in order to get heard or keep buying this crap.

1. Pakistan has had a few automotive plans to support and build the industry and they have failed miserably, the ‘Deletion Policy’, and the ‘Automotive Industry Development Program (AIDP)’ were mainly protection programs for the the big three automakers of Pakistan rather, protection programs for the consumer. The automakers didn’t even bother to follow up on these plans as there was no regulatory authority for the auto industry, thus no compliance matters.

State Bank of Pakistan is the regulator of all the banks in Pakistan and it does control and protect the rights of consumers. The Banking Mohtasib really gets you through a lot of hurdles and problems, they are like the police, only so far, they haven’t been heard as duplicitous.

Similarly, United States and other countries have departments protecting the consumers and acting as police and main investigation authorities for wrong doings by such companies. NHTSA (National Highway and Transportation Safety Authority) is the supreme authority governing and investigating vehicles and the one which also issues recalls if a defect is found in the vehicle, whereas in Pakistan, if a automaker defect is found in a car, the manufacturer always gets away with it.

The Ninth Generation Corolla (2000-2008 model) has the worst brakes, but Indus Motors blamed it on the tires of the vehicle rather issuing recalls and updating the vehicles with improved braking systems. We know from very good sources that in the ensuing emails between different companies, Toyota Japan bursted out on Indus Motors for not fixing the brakes. The bad quality rubber which we shrug off when the car reaches second or third owner, if NHTSA investigates and find out that the rubber has a bad life, it forces the company to do a recall.

So a compliance authority modeled on United State’s NHTSA is a must need if the government wishes to see our automakers comply to the new AIDP and actually protect the consumers.

2. The biggest curse facing our automotive industry is perhaps the barriers to entry of new automakers. The current laws are shaped in a way that protects the monopoly of the big three automakers of Pakistan. The AIDP was created and protected the current lot of automakers to reach the target of 500,000 cars produced per year (and only 120,000 cars were actually produced), the current automakers jack up the supply and reduce the new entrants to rubble.

Abroad though, companies can build just a few cars adhering to safety regulations and standards set by NHTSA, and they go into business and the government actually supports them. Local Motors or even our dreams cars like Ferrari and Lamborghini never went beyond a dozen cars sold per year in their initial years.

So, a similar authority is needed here in Pakistan, so we can as well produce automotive entrepreneurs like Elon Musk of Tesla who is these fighting for a new retailer model in the US, the retail model which Tesla uses renders the dealerships, useless! Because that’s the future.

3. Although it is not directly related to AIDP but, Motorsports play a vital role in the development of the automotive industry, the finest auto brands spawned off from motorsports, even automakers today use racing pedigree to sell their vehicles. It is not just limited to boys having fun, or a playground for the rich. Getting them off the public roads, and onto closed circuits with proper safety and laws governing motorsports, this could lead to creation of better motorcycles and cars as everyone, tries to do better.

Motorsports is sort of where all new technologies are stress tested and a few years later, they are introduced commercially. Safety equipment and suspension is the best example of this. They say that Racing’s real trophy is technology transfer to everyday cars. Right now, after the unfortunate Bahria Accident during a drag race a few years back, the authorities just submitted to media pressure who knew nothing about motorsports and its importance. Instead, proper reforms and governance should’ve been introduced.

4. Joint ownership of vehicles. Cars are getting ever so expensive, and enthusiasts and even those who just like to keep a good car are bound to just a few cars which could come in their budget, result being. You see those loud Charades’ tuned to blow up your ear drums. Though I admit that I am not well versed in the matter related to law, but we should spearhead this into a law so two or more people can join up to buy a car of your choice; whether as a weekend ride, or a commercial vehicle for business activities, and have legal binding to it. Will also follow up on this matter soon on PakWheels.

5. Any model/generation of car or motorcycle should have a maximum life of between 5-8 years. This is the only way to make our auto industry which includes motorcycles to move forward, otherwise, we will remain stuck with the 20 plus years old Mehran and 30 years old 125. We need to regulate the industry and its cars in a strict manner so Pakistan moves forwards and not stuck with it.

It should not have come to the government dictating that cars, motorcycles and technology should move forward after 5-10 years of the model being in production, it is not only important for the country’s development, it also support the research in colleges and universities, builds the vendor industry, and new employment opportunities. The following point is also related to it.

6. Technology transfer is though very much insisted by the government but it has always failed to pressure companies into actually getting some technology into Pakistan or developing themselves. Its the reason why we’re stuck with Mehran, 70 and 125, and unable to move on. Not only our industry and consumer is affected by this, even our future human resources as well.

Whereas in China, for an automaker to continue operating, they have to have joint ventures and provide technology and see its deliverance, though industry execs criticize that foriegn automakers give ancient technology of cars but nonetheless, they comply.

Technology transfer helps an industry get on its feet, it helps produce the technical resources including human, it helps the university students focus on research as they are hub to produce new ideas and research we believe.

7. Instead of providing ridiculous schemes such as the Hybrid, one which only benefited those who could already afford vehicles, Pakistani government should look up to the Indonesian Low Cost Green Car scheme, which provided exclusive benefits who built a car guided by certain regulations for the public but the motivating factors should be: Cheap, small and economical. Kind of like the Japanese 660/Kei car regulations.

The initial specification for the Low-Cost Green Car (LCGC) are:

  • Priced between Rp 50 million for villagers to Rp 85 million for the general public.
  • Fuel efficiency of at least 20 km/l.
  • Made up from at least 60% domestic components.

The government then provides various incentives, including various tax benefits to boost the local industry while Indonesian arm of Honda, Toyota and Daihatsu are all set to reach the 500,000 cars produced target. As we said earlier, the hybrid scheme was a hasty decision to move people from CNG to petrol but the majority, didn’t get any benefit at all.

Baber K. Khan

An auto enthusiast trying to bring car media mainstream.

  • abbas

    agreed

  • HusManAly

    Its time to change the name of Automotive Industry Development Policy (AIDP) to Automotive Industry Regulatory Policy (AIRP) so that producers and consumer should be the stakeholders.

    Ban import of cars as well as raw material. If we can produce wold class Tanks than why can’t cars????

    All politicians who are travelling on expensive imported cars with safety features should us Pakistan made Tanks.

  • Hafeez

    I want to know why so heavy taxes and duties are imposed on cars in Pakistan. We buy 3rd class cars in a price which is comparable to good quality cars’ price in developed countries. For instance, in the price range $15,000 to $30,000, one can buy very good quality cars in Middle East, Europe, North America, etc. which are even considered luxury cars in our country. Sad to say that in the $15K to $30K price range we have options of city, gli, civic, altis, prius, etc. only.This situation exists in the whole South Asia and perhaps in all 3rd word countries.

    Anyone knowing about the matter, please do guide.

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