New Pakistan Auto Policy Will Be Announed Soon – Federal Minister Jatoi

Jatoi-FrenchEnvoy

Ghulam Murtaza Khan Jatoi, the Federal Minister of Industries and Production, said that new auto policy will be finalized and announced soon. The aim of the upcoming auto policy was to facilitate new and interested parties so they can invest with confidence. The Minister was talking to the Karachi Chamber of Commerce and Industry representative on Monday, December 21st. He was quoted saying,

“Our aim is to invite more and more investors into the country,”

Also Read: Pakistan Auto Policy Has Started A Tug Of War Between The Japanese And The Europeans

The auto policy has been pending for three years now, and the government is eager to launch it soon. However, the policy has been shrouded in backdoor lobbying and arm twisting. The Federal Board of Revenue (FBR) is of the strong opinion that the existing three major automobile manufacturers (Toyota, Honda and Suzuki) should not get the same incentives as the new entrants. The three Japanese carmakers have been working hard to make sure they get the same perks government is willing to give to those who want to bring fresh investment. And this tug of war is the main reason policy has delayed so much. When asked about the current tensions between the existing auto manufacturers and FBR, he remarked,

“The Ministry of Industries wants to move ahead with the new auto policy, taking into account reservations of the Federal Board of Revenue,”

As far new potential entrants are concerned, the Minister commented,

“We are in contact with Fiat, Renault and some other carmakers to bring them to Pakistan so that people get jobs as well as cheap and quality cars,”

It is hoped that the year 2016 will bring some interesting and positive changes to the current stale and stagnant auto sector of Pakistan.

  • Muhammad Abdullah

    Nice to hear that FBR isn’t thinking nonsense.

  • Corrupt politicians

    have been hearing this for two years , kuch nahi hoga idhar , local car mafia is very strong

  • Muhammad Abdullah

    Still… Lets hope for the best.

  • Hoping to see new international cars running on the streets of Pakistan.

  • Sabeeh Ur Rehman Tariq

    I hope they consider basic vehicle safety. 😐

  • Guest

    So the policy will be “announed” soon [sic, look at the headline].

    But when will it be implemented?

  • Muhammad Yasir

    MASSIVE difference b/w announcing something AND IMPLEMENTING IT !

    only God know how many CENTURIES will it take to put the bold and over confident claims of the govt into ACTUAL PRACTICE for the appropriate cause and effect !

    getting real tired of this lethargy in Pakistan.

    No wonder people apply for permanent residencies in countries much better and much ahead of this land!

  • Muhammad Yasir

    i don;t trust them one bit … don’t expect anything good from them ,
    yahan bhi unka apna koi matlb hoga !

  • Uzair

    I don’t think the problem is the implementation, its the announcement and the reaction. Once announced it can easily be implemented in 6 -8 months. But the main concern is how will the 3 existing manufactures react to this if things aren’t according to what they wamt

  • Ehs

    to be announced soon “since 2012” there are tons of pakwheels blogs having the similar title to this one. you guys need to realize that Government says something else and does something else. height of incompetence that it has taken three years and the policy is still not finalized!.

    I have read the AIDP policy draft you guys will be disappointed:-

    1. there is nothing there to support implementation of modern euro V standards. In fact the government boasts how it has successfully implemented a 1990s Euro II standard in 2015.

    2. Safety and security – there is nothing mandating enforcement of safety features and standards – like dual airbags, etc. it just says safety is important and practically there is nothing there.

    3. Policy talks about supporting local industry but there is hardly any mention of meeting consumer needs – the lifeline of the industry.

    4. the draft is apparently being influenced heavily by Japanese Embassy and Paksuzuki

    5. The earlier proposal to replace old obsolete models and offer models in line with international market has been removed.

    6. The tariff roadmap does not have any plans to reduce duty on CBU’s.

    The only actual good thing about this policy is incentives for new assemblers. however paksuzuki is trying to get these new-assembler incentives granted to them – in other words effectively trying to block entry of new assemblers.

    I hope there is competition in the market else consumers will continue to suffer and be sold globally retired vehicles.

  • Adnan Khan

    Don’t Trust them. Car mafia is too strong . we the people , too weak.

  • Abdullah

    The Economic Coordination Committee (ECC) of the Cabinet on Friday, 19 March, 2016 approved Automotive Development Policy 2016-21 that offers incentives to new manufacturers through lower tax rates to bring vehicle prices down through competition with existing players.

    Board of Investment (BoI) Chairman Miftah Ismail told Dawn after the meeting that basic policy objective was to bring in new brands and revive some closed units to generate healthy competition in the market, leading to reduction in prices and improvement in quality standards.

    He said the existing players were running with 20-year-old models despite government encouragement to roll out new models and reduce prices. “The existing three have not been able to bring in enough competition. As a result, car prices in Pakistan are much higher than they should be.”

    The policy defined new entrants as carmakers whose models are not produced in Pakistan at present and would set up greenfield projects, he said. This would mean that Honda, Toyota and Suzuki would not be offered incentive facility which the government would provide to new players like Fiat, Volkswagen, Renault and Nissan.

    Mr Ismail said new entrants would be allowed import of plants not produced locally at 10 per cent duty and 25pc duty on localised plants for five years. These rates would remain unchanged for five years.

    Simultaneously, a brownfield category has been created for plants like Ghandhara-Nissan and some others which are currently lying closed for various reasons. The incentive package for new entrants would be available to this category for three years to facilitate their revival as economic activity picks up pace.

    For existing carmakers, the duties would also be rationalised. In doing so, the import tariff would be reduced from 32pc to 30pc for non-localised plants and from 50pc to 45pc for localised plants.

    The policy also promised reduction in duties by 10pc for all cars up to 1,800cc engine capacity over the next two fiscal year i.e. 2017-18 and 2018-19. This would mean the import tariffs on 800-1,200cc cars would be brought down from 55pc to 45pc and so on. However, there would be no change in these rates in the coming budget.

    The import regime for used cars was kept unchanged because this fell in the jurisdiction of parliament, the BoI chairman said. The import tariff on completely knocked down (CKD) units would also be reduced to 30pc from existing rate of 32.5pc for non-localised parts and from 50pc to 45pc on localised parts, he added.

    Also, the new policy set a uniform 10pc rate of duties on components and sub-components by merging the two in one category because 5pc duty on components and 10pc on sub-components led to mis-declaration in the past.

    He said the new policy would facilitate higher volumes, better investment, enhanced competition and better quality with latest technology. It creates a balance between industrial growth and tariffs to ensure sustainability for all stakeholders and encourage consumer welfare.

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