FINALLY – Govt Announces New Auto Policy
The federal government has finally announced Auto Policy. Addressing a press conference, Federal Minister for Industries and Production, Khusro Bakhtiar shared the details of new policy. As per the minister, important points of the new policy are:
Decrease in Car Prices:
- New Car Prices will be implemented in next 1-2 days
- Prices of cars upto 850cc will reduce between Rs104,458 – Rs142,388
- Prices of cars between 1001cc–1500cc will decrease between Rs112,118 – Rs186,375
- Rs169,958 will be decreased for the 1800 cc category, and Rs229,458 for 2000cc cars.
- Additional Customs Duty (ACD) is reduced from 7% to 2% on CKD units for cars above 1000cc. Meanwhile, the ACD for cars upto 1000cc will be 0%
Electric Vehicles:
- Import duty on CBU Electric Vehicles (EVs) will be reduced to 10% from 25% for one year
- 1% Customs Duty on import of EV parts
Steps Against ‘ON Money’ Culture
- Rs50,000 to Rs200,000 Withholding tax will be applied if the first registration is not in the name of the person who booked the vehicle
- If the car manufacturer delay the car for over 60 days (2 months), the company will pay KIBOR + 3%
- Maximum upfront payment on car booking not to exceed 20% of the invoice value
Benefits of Localization of Auto Industry:
- Condition of 30% value addition has been introduced on imported raw materials and components which will be used in vehicle manufacturing in local market
- Government to update localized manufacturing of auto parts after every 6 months to ensure quick localization
- Auto Sector will produce 375,000 new jobs
- Auto Sector has capacity to produce 415,000 cars annually. Last year, Pakistan produced 164,000 vehicles
- Govt is developing Auto development and Export policy, as its focus will not be domestic market, only
- Pakistan will produce 26-lacs motorbikes this year and 30-lacs next year
- Lastly, export targets for the local manufacturers will be up to 10% of the import value by the end of five years of this policy
Safety Measures:
- To ensure road safety, the basic safety measures like brakes, seatbelts, airbags, and collision safety will be met
- In next 3 years, 17 such shortlisted safety regulations will be met in different phases
The federal minister further told media that some points of Auto Policy have been approved, while some other will be approved next month.
PAMA Chairman’s Thoughts About Policy:
Commenting on the newly announced auto policy, Chairman PAMA, Ali Asghar Jamali said, “I would like to strongly appreciate the present Government for a very progressive Auto and Hybrid Electric Vehicle Policy.”
He further said the announced policy interventions are aimed at translating the vision of Prime Minister Imran Khan which is all about growing the local industry and creating more jobs for our local youth. “The policy also addresses the Prime Minister’s vision for promoting environmentally friendly technologies by promoting Hybrid Electric Vehicles,” he said.
The chairman added industry is excited to see the announced policy and many players would be unveiling their investment plans to introduce the locally produced Hybrid Electric Vehicles in Pakistan. “I am confident that all stakeholders including Customers, Industry, Part Makers and Government shall reap the benefits of new policy equitably,” he concluded.