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October 30, 2020

New auto policy expected in March next year

Business

October 30, 2020

KARACHI: The government is expected to unveil the new auto policy in March next year with tax incentives to lower prices and give reliefs to consumers, an industry official said.

Indus Motor Company (IMC) Chief Executive Officer Ali Asghar Jamali said the ministry of industries assured the stakeholders that consultation on the new policy would begin shortly and government is committed to finalise the policy in March.

“Government is diligently working to uplift the economy and has a realization that auto sector can be the biggest contributor,” Jamali told the media. “We are the largest manufacturing sector, highest tax payer and employing 3 million people directly and indirectly.”

The existing auto policy, expiring next year, helped in attracting new players and huge investment in auto sector.

“We have been advocating the significance of predictable, long term and transparent policy and we have all witnessed the impact of Auto Industry Development Program (AIDP) 2016-21,” he said.

Jamali said the industry creates at least 6 jobs at different levels from manufacturing to logistics with one vehicle manufactured in country. Auto sector is the biggest taxpayer with taxes comprising 40 percent of vehicle prices on an average. This has made the cars unaffordable for a large section of society especially with increasing inflation and depreciating rupee.

“Being the largest manufacturing industry, the whole auto sector plunged into a deep crisis during the nationwide lockdown by dint of COVID-19,” he said. “All auto manufacturers incurred huge losses and from April to June this year almost not a single vehicle was produced.” However, he said not a single employee was laid off and “we even provided interest free loans to our dealers and vendors to be committed to our core value of promoting the local engineering base in Pakistan.”

Jamali said the momentum started picking up since July and due to overwhelming demand, the company went for double-shift production from September.

Double shifts will help meet the demand and lead time will be reduced. IMC has been striving to meet the expectations of its customers and one of them is the earliest delivery to them.

“We are happy that double-shift production will fulfill our commitment to them and the menace of on-money will also vanish from the market,” he said. “The customers need to be patient and wait for deliveries instead of paying premiums.” Jamali said the industry advised the government to impose a transfer tax on new vehicle if it is sold within six months of delivery and this will also discourage the own-money business.

IMC has around 1 percent contribution to the national exchequer through trading parts (by procuring local parts worth over Rs200 million every working day) while it employs over 3,000 people to cater to second highest market share by dint of 75,000 units of annual production capacity.

“And this all is being done in spite of various challenges to the industry including rupee devaluation, imposition of federal excise duty, and additional custom duty,” said Jamali.