Govt announces automotive policy carrying incentives reduced duti

ISLAMABAD: The government on Monday announced the Automotive Policy 2016 carrying incentives and reduced duties for new entrants and existing vehicle manufacturers with the hope to bring in well known international brands to the Pakistani market. Addressing a press conference here Minister for Water and Power Khawaja Asif said the new automotive policy approved by the Economic Coordination Committee (ECC) would be valid for five years till 2021.Under the new policy, he said duties for imported parts which were not made in Pakistan would be reduced from 32.5 per cent to 30per cent and for those which were made in Pakistan would be cut from 50 per cent to 45 per cent from next financial year (July 1, 2016).From the financial year 2017-18, duties on locally finished vehicles would be reduced by 10 percent, he added.The minister said the policy was prepared with input form all the stakeholders including ministries of finance, industries and production, Federal Board of Revenue and other players.He said the government acknowledged the contribution of automotive industry in large scale manufacturing.The auto makers could not properly take advantage of a captive market as was done by motorcycle manufacturers.He said under green field investment incentives were provided for installation of new and independent automotive assembly and manufacturing facilities by an investor for the production of vehicles not already being manufactured in Pakistan.’Companies would be encouraged to set up new plants and bring equipment without paying duties,’ he added.He said most manufacturers could only be called assemblers as they were using obsolete technology. ‘The policy was aimed at improving technology and features like air bags, anti lock braking system and fuel efficiency,’ the minister added.Khawaja Asif said at present Pakistan was not producing any exportable vehicle as the companies lacked international standards.The companies even abandoned deletion programme and were not meeting any engine specifications used worldwide, he added.The minister said the government would continue to regulate and strike a balance between imported cars and local manufactured ones to protect interests of consumers.The government was getting valuable revenue from import of vehicles, he added.He said the consumers were exploited for the last 25-30 years and the new policy tried to protect interest of the buyers.The minister said the policy would protect investment of new entrants and its consistency would be ensured.He said the recall policy for vehicles was also taken into account.Board of Investment (BoI) Chairman Dr Miftah Ismail said the closed sick units would be given incentives so that they could begin production. ‘Those who would open plants would get duty exemptions,’ he added.He said green field investment was aimed at providing a level playing field to new entrants who were required to make huge investment for opening dealerships and setting up plants.’If the vehicle market spread to five players instead of the existing three then it could benefit the consumers,’ he noted.He said the bus and truck manufacturing sector would also be promoted through the new policy.Chief Executive Officer of Engineering Development Board, Tariq Ejaz Chaudhry said an automobile institute would be established and international standards by a forum for harmonization for vehicle regulations Working Party 29 would be adopted to raise standards of the automotive industry.