By Mubarak Zeb Khan
ISLAMABAD, Dec 27: Prime Minister Shaukat Aziz on Wednesday approved, in principle, the long-term auto policy and asked the ministry of industries to submit a detailed auto industry development programme (AIDP) latest by March 31.
Chairing the meeting to review the long-term auto policy, prepared by the Ministry of Industries and Production, in consultation with all stakeholders, the prime minister said the new policy would be presented to the Economic Coordination Committee of the Cabinet (ECC) for its formal approval in January 2007.
The Engineering Development Board (EDB), a subsidiary of the ministry of industries, had prepared a draft policy envisaging concessions for attracting new players in the auto manufacturing sector and providing an adequate protection to the existing manufacturers.
The prime minister said the government attaches great importance to the auto industry as it was a key driver of economic growth and a creator of jobs and employment in the country.
Mr Aziz said the government was keen that apart from meeting the growing local demand for autos, the auto industry should get into the export of auto parts which was a niche business requiring specialisation.
He said the government recognises auto industry as an important stakeholder and wants it to expand, keeping in view the expected growth in demand in view of increase in the size of the middle class and the economy. Mr Aziz said the long-term auto policy would provide the investors predictable and transparent environment and facilitate long-term investment, encourage growth and competition, enhance competitiveness and stimulate innovation.
"The government is acting as an enabler for the private sector and will ensure consistency and continuity of policies to facilitate auto industry's integration into the global supply chain," the prime minister said.
He also emphasised the need for indigenisation of the auto industry, which, he said, was now getting increasingly possible with the development of engineering industry in the country.
The prime minister assured that the government will regulate the import of used cars in a manner that the local industry is not impeded.
Minister for Industries and Production Mr Janangir Khan Tareen made a presentation about the salient features of the policy. He said the important pillars of the policy include a five-year tariff plan, human resource development plans, auto cluster development, technology acquisition support, incentive for higher value indigenisation, penalty for not achieving further indigenisation and institutional mechanism, including industry representatives for regular assessment and review of progress under the policy.
The representatives of the private sector said the policy would encourage private sector to invest more, leading to value-addition and modernisation of the industry.
They said the long-term policy would boost the confidence of private sector and enable them to do future planning in a better way.