The auto policy

This refers to the news report, ‘Three car assemblers are fleecing consumers, says Khawaja Asif’ (March 22). The new auto policy falls short of expectations with no national goal. The purpose should have been to totally indigenise the domestic auto industry. The existing plants are assembling units and the deletion targets set out years ago have not been met without any action from the government. The car market in the country is limited, and with new entrants it would not provide an economy of scale. It is, therefore, essential to expand the production base by exploring avenues of exports to the Middle East, Africa and Far East. The government will have to play a crucial role in finding new markets and volunteering full support to the export effort of local car-makers/assemblers.

The government needs to follow a policy of carrot and stick. The existing units should be given a timeframe of 12 to 18 months to achieve 100 percent localisation, offering an attractive package of incentives, concessions and facilities. If the targeted deletion is not achieved within the stipulated period, they should be heavily penalised, in addition to withdrawing all incentives/concessions. New entrants can then be allowed not as assembling units but with an undertaking to completely localise within 12 to 18 months time, and offering attractive concessions and facilities. The auto policy should include buses, trucks, heavy-duty and other vehicles. A total ban should be placed on the import of used vehicles. The import of luxury vehicles should be disallowed. The reduction of duty on luxurious cars is ill-advised.

Kulsoom Arif

Karachi