New auto sector policy proposes 80pc reduction in Customs duties

ISLAMABAD: The new auto sector policy has proposed 80 percent reduction in Customs duties for the entry of manufacturers into the Pakistani market for the next five years in order to put in place competitive mechanism and reducing car prices in the country.
For new brands of cars from the existing car manufacturers operating in Pakistan, the duty reduction is proposed to be available for two years in order to give more choice to consumers at affordable prices.
In Pakistan, it is generally believed that the manufacturers are fleecing consumers on account of car prices existing in the neighbouring India. It will be mandatory for manufacturers to come up with new brand of cars after a period of 10 years. Citing an example, an official said that the shape of Suzuki Mehran or any other shape will have to be changed after every 10 years period.
The indigenisation of cars will be encouraged under the upcoming auto policy in the country.“On the directives of Prime Minister Nawaz Sharif, we have prepared the draft of Automotive Development Plan for five year period which will be tabled before the ECC for approval within the next two weeks,” top official sources confided to The News here on Tuesday.
The Engineering Development Board, Ministry of Industries, FBR and other stakeholders held an important meeting here on Tuesday to incorporate the changes proposed by stakeholders before submitting the draft of the auto policy beforeof auto policy before the ECC probably by mid of February 2015.
The sources said that some Chinese companies showed their interest to invest in auto sector of Pakistan but the existing players mainly belonging to Japan are making all kinds of hues and cries to ensure protective regime for them. The auto manufacturers argue that the country’s market for new entrant is not ripe because they are operating at maximum capacity of 50 percent.
But it is fact that the practice known as “Aoun money” still continues unabated in the country and there are serious concerns expressed in terms of ensuring quality of cars manufactured in Pakistan.
The draft auto policy envisages changes in cars to install alarm system in the cars manufactured in Pakistan to avoid rampant thefts of cars. The government proposed to place recall system which will ensure return of cars in case of any major fault occurred in bulk.In order to discourage late delivery, the new auto policy proposed 50 percent payment at time of booking of cars and remaining 50 percent at time of delivery.
In case of delay over three months of booking of cars, the auto policy proposed penalties and rate of penalties are under consideration. All types of used cars will be regulated under the upcoming auto policy as no used cars will be allowed for import except through personal baggage scheme, transfer of residence and gift scheme.