'Used cars, tractors do not affect growth of local auto industry': Ministry told to formulate policy

Special Committee of Public Accounts Committee (PAC) has directed the Ministry of Industry and Production to formulate a policy in which the customers may be given an option to buy local or imported cars, as import of cars do not have negative impact on local production of automobile industry.
The Committee has asked the ministry to gather information from all the stakeholders of automobile industry on how to curtail the exorbitant prices of cars and tractors and submit a report to the committee till November 30. While chairing the committee, Khawaja Asif observed that import of used cars and tractors did not affect the growth of local auto industry.
He also said that present automobile policy for 'new entrances' must be revisited and stressed that encouragement of new entrances would positively impact the industry and promote healthy competition. Chairman further said that the Federal Board of Revenue's restrictions on import of tractors not older than three years also need to be revisited.
Member Custom FBR Munir A Qureshi informed the committee members that the data compiled by his department revealed that during 2005-06 the growth of local auto manufacturers were 170,000 units. During the same period import of vehicles was 43,000. To substantiate his viewpoint, he said that the highest production of local cars was recorded when import was at peak.
Qureshi further said the auto-assemblers did not fulfil the commitment of fully indigenisation of the local vehicle industry. Still main components of vehicles, including engines and gears were not being manufacturing locally which was against the deletion policy of the government.
Additional Secretary, Ministry of Industry and Products, Javed Iqbal Awan suggested the committee that import of CKD should be banned as this concession could not help the consumers to buy vehicles on cheaper rates. He further said that the concessions enjoyed be auto assemblers and vendors under 20 to 30 years old agreements should be revisited to see why indigenisation of the industry suffered a set back despite lucrative packages.
Senator Saeed Zafar suggested to utilise the expertise of Heavy Mechanical Complex in fully indigenised the auto sector. The complex had capacity to produce engines and gears of vehicles. This suggestion was hailed by other members of the committee.
An official of Ministry of Commerce pointed out that depreciation of rupee had no link with the prices of vehicles. The manufacturers raised the prices with the introduction of every new model in the market. He suggested Board of Investment, local manufacturers and principal company must sit together and revise the old agreements. He further said that under the existing agreements, the assemblers not only failed in indigenisation of the industry but were also not successful in exporting the vehicles on the other side all the regional countries are competing in vehicle export.