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Govt not to amend Auto Policy 2016 despite pressure from three automakers

March 30, 2017

ISLAMABAD: The government is not willing to bring changes in the Auto Policy 2016 under influence, said spokesman for Board of Investment (BOI) while talking to group of journalists here on Tuesday.

He said, “Pakistan is already being criticised for keeping inconsistent policy, therefore, the government is not in a mood to amend the policy under any pressure to accommodate some auto players,” he said.The BOI believes that new auto policy was formulated to bring new entrants in Pakistan keeping in view of consumers’ welfare to ensure good quality of cars and speedy delivery.

Shah Jehan was responding to a media report that Pak Suzuki Motors Company will review its decision to invest $460 million if the government failed to respond to its request for incentives. He further disclosed that some auto companies like Renault, Ghandhara Nissan, Nishat Mian Mansha Group, Kia and Hyundai contacted and applied for the incentives. Diwan Motors and Faw China applied for incentives given in the policy and their cases are under consideration as they are in grey areas.

Diwan Motors imported kits after June 2013, and sold in the market, therefore, does not fall in the categories of incentives. The Faw company initiated its project and is expanding its base without applying for incentives but the company did not fall under the policy. Similarly, he said, Pak Suzuki does not fall in green field or brown filed categories and their demand for incentives was not valid. He said they have been operating in Pakistan for a very long period.

Shah Jehan said one of the major objections about Pakistan was that there was no consistency in the policies of governments. The government would not change its auto policy or bring any amendments in it. “We have lot of pressure during formulation of the auto policy which always happened,” he said. The BOI rejected new entrant – Audi - in auto sector and asked them to come up with a fresh proposal.

Audi auto manufacturer representatives visited Pakistan and wanted to invest in MKD (Medium Knock Down) and wanted only assembly in Pakistan. It is against the auto policy which promotes CKD (completely knock down). “We want Audi to further strengthen vendors’ base and dealer network, besides creating employments,” he said. The BOI spokesman said the Auto Policy 2016 has been approved for brown investment and green investment and no incentives for existing auto sector investors.

He said 25 percent growth in auto sector has been recorded in the last two years. He said rationale of the policy is to discourage the practice of booking of cars against full amount and delivery in six months to one year. In addition, the prices of cars were higher in the region.