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Thread: wht is DELETION POLICY

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    Default wht is DELETION POLICY

    as said by Minister at Lahore Expo that in 2007 the deletion policy will end and cars will become very sasti

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    In many Developing countries including Pakistan, the Government sets a level for the local auto assembler to achieve for indigizization. Forexample, a car like Mehran I think has achieved the deletion level of 70%. That means it is made with atleast 70% Pakistani made auto components.

    So far, Tractor makers have the highest level of deletion with almost 95% parts used in Millat Tractor are Pakistani made. This is great, it makes a nation proud to make an automotive vehicle, whether its a car or a farm Tractor to be made in Pakistan. This ensures ample job opportunities for Pakistanis and you don't have to worry about leaving the country after you become highly qualified and well educated in a country that has given you all.
    Permanent positive change (in your life, or the society) with proper planning occurs slowly. While without planning any change becomes a disaster rather quickly. Said by Whocares...

    I got Turbo fingers... Anyone wants to race me in typing....

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    Sorry, the word should read Indiginization above.
    Permanent positive change (in your life, or the society) with proper planning occurs slowly. While without planning any change becomes a disaster rather quickly. Said by Whocares...

    I got Turbo fingers... Anyone wants to race me in typing....

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    Default

    i dont believe this

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    Default

    @ssgme, @datz, if the deletion policy ends, how will the cars become cheap... importing car parts would need to economical for that to happen, otherwise it would be more expensive
    -

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    khashraf

    i dont know it was said by minister

    thanks....: datzburier

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    Default

    To my understanding end of deletion policy means the restriction imposed by Govt. for level of Indigenous(Made in Pakistan)parts.
    This means that assmebler can choose to put any part (Local or imported) to assemble cars here in Pakistan.

    Lets see if this proves to be enough incentives for other manufacturers/assemblers to assemble cars here in Pakistan.
    Keep a cool head and wear seatbelts!

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    Under the deletion policy, once an auto-part is declared to be locally produced for a certain category of cars, its import is stopped for that category, i.e. that part is deleted from the list of importable parts.
    As Pakistan is a signatory to the TRIPS/TRIMS agreements of WTO, the deletion policy has to be discontinued as it amounts to discrimination against foreign suppliers. Pakistan has already sought entension in deletion policy twice and further extension is not possible.
    However, the domestic autoparts industry will still be protected by the government by replacing the deletion policy with Tariff based system (TBS), under which the import of autoparts, which are being manufactured, or capable of being manufactured in Pakistan, will be subjected to a higher rate of tariff, so that their import becomes unviable.
    As datz pointed out, the highest level of deletion has been achieved in the tractor and motorcycle production in Pakistan, which is in the range of 85-95%. Among cars, Suzuki Mehran has the highest level of deletion at about 70-75%
    Evolution interrupted.

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    However the end of this deletion policy may not necessarily mean a reduction in car prices. The minister actually meant that after the end of deletion policy (which by the way discourages new entrants), new assemblers would start operations in Pakistan and the competition will, as the minister would like us to believe, bring down prices.
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    "@ssgme, @datz, if the deletion policy ends, how will the cars become cheap... importing car parts would need to economical for that to happen, otherwise it would be more expensive"

    I think Deletion policy, as shueyb mentioned correctly, is a protective policy from the government of any country, to help the local automaker achieve an expertise in certain part of automobile. Until that level of expertise is achieve, the local industry needs some kind of protection from imports. And ending the deletion policy will be harmful for Pakistani auto assemblers and parts makers at this stage, as cheap Chinnese auto parts will flood the Pakistani market. Ending the Deletion policy right now will bring down the cars prices, but the Pakistani auto parts makers will be hurt and will be out of business. We need to support Pakistani Auto parts makers by not disturbing this Deletion policy right now. May be later on. BUT.... the automakers also have to do their part, that means, increase their investment in making more sophisticated parts like Engine and Transmission also in Pakistan. So far, not any Automaker, except the tractor makers, are locally making transmission systems or Engines.

    I agree with Shueyb that Tariff system will continue to protect our local auto industry, which is a good sign. Our auto industry is still in developing stages, we don't want the cheap Chinnese autos to kill our local industry, by leaving our Auto industry without any protection at this stage. A healthy competition is encouraged but with passage of time, bring in foreign cars.
    Permanent positive change (in your life, or the society) with proper planning occurs slowly. While without planning any change becomes a disaster rather quickly. Said by Whocares...

    I got Turbo fingers... Anyone wants to race me in typing....

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    khashraf, to answer you Q, Ending the Deletion policy WILL lower the auto prices, as all the Cheap Chinnese auto parts directly shipped to Pakistan or Indian autoparts (re shipped from Dubai), will bring down the prices of the cars, but will also knock out our own auto parts makers, which will be more counter productive as at this point auto parts makers are supporting many hundreds of thousands of jobs all across Pakistan.
    Permanent positive change (in your life, or the society) with proper planning occurs slowly. While without planning any change becomes a disaster rather quickly. Said by Whocares...

    I got Turbo fingers... Anyone wants to race me in typing....

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    @datz... you would agree that there are two things in autoparts... their quality and their price. For chinese parts to affect our industry, they would be of the same or lesser quality and of lesser price... same for indians... but then isnt that true for each country, why shouldnt these chinese/indian parts affect european or US economy which is more labor expensive than most in the world... what I feel is that if the govt. only allows the quality parts in, that would benefit our industry, otherwise it would be a nightmare. Also, if we do produce quality parts at competitive prices, other markets should be as open to us as ours is to others... we export rickshaws, motorbikes, buses etc... so we do have our share in the new policy. what u think?
    -

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    khashraf bhai, I would agree on the quality. Definately a big one.

    What we are seeing in Paksitan now, is opening up of Market. More and more car companies are comming in and hopefully within next couple of years more would follow, like Volks Wagen and even Mercedez to assemble in Pakistan. DhaimlerChrysler is already assembling Jeep Cherokee and Mercedez in Egypt for many years now, which has similar industrial base as Pakistan.

    So, when Luxury car assemblers like Mercedez will come to Pakistan, the vendors will have alot of competition to provide top of the line products to these companies. Currently, our vendors are doing a good job and meeting very strict quality standard of auto Giants like Honda and Toyota of Japan. So, slowly things are improving for Pakistani auto industry. We would have to keep a check on cheap imports from China or reshipped product of India via Dubai, which are making a place in Pakistani market already.

    Chery QQ of China is getting way too much attention in Pakistan than it
    deserves. Its a knock off copy with poor quality. This is the type of stuff we need to keep out of our market. It may look all good from the exterior, but the engine and transmission are highly questionable in this car. People here are already complaining about the hard gear shifting, that right there is a big problem. It shows how the metallurgy of the transmission is made with poor attention to detail. Who can say how long the engine of the Chery QQ will last. Engine might start cracking and leaking oil within a years time. So people need to be really careful before start dancing around with Chery QQ's power windows option. This power windows is a disruption to draw attention away from major faults in this car.
    Permanent positive change (in your life, or the society) with proper planning occurs slowly. While without planning any change becomes a disaster rather quickly. Said by Whocares...

    I got Turbo fingers... Anyone wants to race me in typing....

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    The Pakistani Auto Parts sector still needs support, but as was said here, needs to be competetive. As khashraf said, the sam is true in America. The Chinese are kicking Americas ***...And teh Indians are taking all the Engineering jobs. So even teh once mighty America is being hit by other cheap sources of labor.

    Until America experienced real pain, however by the Japanese in the 80's they were lazy. But they finally woke up. We need more volume in vehicle sales to reach critical mass, however...

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