LAHORE
The country’s auto market expansion dream could not be materialised and the local industry is still hovering around 150,000 vehicles per year, as the import of used cars is the biggest single impediment for new entrants and new investments in Pakistan auto sector.
The used cars, despite their allowable age being reduced from 5 years to 3 years, a quantity of 25,000-30,000 used cars are still being imported every year, mainly in categories below 1000cc engines.
It is of utmost importance that New Technology should be imported into Pakistan through Joint Ventures and Technical Collaborations with flagship companies so that Pakistan can move away from traditional and low value exports, and explore high value sectors like engineering, auto etc.
The auto sector in its proposals for upcoming Trade Policy said that the government has to focus on countries it has cordial International relations with and who are ready to enter into Pakistan.
Turkey and China are countries that can assist our Industry, allowing the auto industry to grow and mature towards our mutual dream of a National Car.”
In its Trade Policy Inputs, PAAPAM recommended that the government’s Trade Policy should focus on new entrants to invest in Pakistan and start manufacturing their products. ‘Trade Policy Inputs’ presented to Federal Commerce Minister Khurram Dastgir Khan by PAAPAM Chairman Siddique Misri and Senior Vice Chairman Mumshad Ali during 65th Trade Policy Meeting held by the Ministry of Commerce.
It suggested that definition of an export oriented company in SRO 327(1)/2008 should be redefined for the Auto Engineering Industry. Criterion set in SRO 327(1)/2008 should be modified for Auto engineering sector (APM), by defining that a unit exporting 25% of its total sales for first 3 years should be considered export oriented, and thereafter increased to 35%.
It recommends continuation of CBU vehicles to be maintained on Negative List while trading with India. With respect to CKD parts, it recommends that OEMs, registered with EDB, may be allowed to import CKD parts at prevailing duty rates prescribed under SRO 656.
These facilitations would lead to price reductions in vehicles, due to lower cost & freight savings on import of Indian CKDs, besides introducing new models that have been designed exclusively in India for the subcontinent market conditions.
Moreover, RD on raw material imports for manufacture of Auto Parts should be withdrawn immediately.
An Auto Parts Import Monitoring Committee should be formed to determine Mis-declarations, Smuggling and Under-invoicing. It also demanded that Customs duty assessment of Auto Parts by weight should be withdrawn and all parts should be assessed in units.
Regions and countries to focus on in our Trade Policy include Russia, Australia & New Zealand, Africa, Eastern European Countries and South America.
The government needs to bring its economic wings into action and demand in-depth market access reports of different industries to assess which industries to promote and where.
The proposals suggested that single country exhibition should be arranged, in consultation with PAAPAM, in a country where there is a high demand for Import of Auto Parts, so that high end meetings can be scheduled to achieve results.