What should be the new auto policy, this issue brings me out of wood works and here I go again....
My background is from Telecommunication sector, so lets take an example of Telecom sector, in the 90's PTCL and NTC were created by splitting old Telephone and telegraph (T&T) company of Pakistan and from late 90's to early 2000's the whole sector was deregulated gradually (pay phone was first deregulated if anyone would remember that), and new entrants encouraged to join our market that at the point the competition in our market is so fierce that ARPU in Pakistan are lowest in the world (yet the sector is one of highest taxed in the world).
Now the question is how to apply that sort of reasoning/philosophy to auto sector, well for almost last three decades the auto policy implies a sort of garden of Eden (or protective cocoon) around our precious few auto makers, yet Nissan, Mazda, Hyundai, Kia etc have left our market, end result is rather alarming with low quality and obsolete products ahoy.......
First thing that govt should do is, it has charged the petroleum levy for decades where they skim out neat little profit at the top of all the petroleum based products and what is that money used for, debt retirement (interest retirement actually as there is no policy of retiring the foreign or local debt), yet our refineries are not upgraded to latest Diesel Desulfurization units, so we really have a dirty diesel having around 7000 parts per million yet the world is moving towards 10 ppm diesel, so the first step should be,
1) Provide the cheap loans to local refiners so they could upgrade their units with latest desulfurization processors, and in next couple of years start providing the 350 ppm sulfur diesel and then over the next decade lower it to 10 ppm diesel, and there should be some sort of framework to integrate the electric vehicles.
Why is that step necessary, some might ask? Well the latest R&D in turbo diesel technology has sent the fuel economy to fantastic levels (check the latest TDI engine economy/power, torque figures from Volkswagen AG) that will eventually open the doors to us automatically to newest technology.
2) People might not know about it but the import duty structure favors Asian manufacturers instead of western companies (duty structure based on purely engine displacement yet the Japanese CC is not the same as the German CC) change that discrimination and make the uniform policy.
3) Forced obsolescence will not work, policy can not force manufacturers to bring the latest models there are always loopholes/incentives for them to keep the old and obsolete products on shelf, so take those incentives away by encouraging competition.
4) All of our fantasies are based on import of used vehicles (age of allowed used vehicle is used as leverage pedal by Govt), change the duty structures on new vehicles such a way that latest technologies if not produced in country can be availed without loosing your arm and a leg.
Let me give you an example of point # 4, its more economical for someone to buy new property in UAE, Turkey or Morocco to get the residency status and buy a vehicle over there, rather then pay outlandish amount to buy a largish Mercedes or Porsche in Pakistan. How twisted is that?
I could go on and on with discrepancies with existing system, but I have done this before as well, so I will give you few of the links of my old posts on same subject matter.
https://www.pakwheels.com/forums/wheels-pakistan/225841-why-dont-honda-toyota-present-average-priced-car-pakistan#post4156428
https://www.pakwheels.com/forums/wheels-pakistan/225841-why-dont-honda-toyota-present-average-priced-car-pakistan-2#post4160078
Faisal