Condemning the Auto policy-2016 Auto vending industry has totally rejected the long-awaited auto policy describing it one-sided and new-entrants oriented policy and vendors have expressed their concerns on certain contents of the auto policy announced after a delay of 4 years.
Former President of Multan Chamber of Commerce and Industry (MCCI) Mian Iqbal Hassan said in a statement that the basic objective behind the much-awaited auto policy, should have been to stimulate rapid growth and investment in the automotive sector through simultaneous incentives to new entrants, existing assemblers and auto parts manufacturers (APMs). Sadly, it seems that the auto policy is entirely focused on new entrants. Mian Iqbal Hassan said the auto policies in countries such as China, India, Thailand, Korea and Indonesia, etc are targeted to act as catalysts for growth of investments, government revenue generation, building capacities and creating employment in their respective countries.
They acknowledged the contribution of the automotive sector and seek to enhance their role. Iqbal Hassan pointed out that the auto policy approved by the ECC on 18th March 2016 will not make any significant contribution towards the goal that the Finance Minister has set for himself and for Pakistan. Currently, 4 of the top 10 global auto assemblers are producing cars in Pakistan. They were bound to utilise up to 100 percent local parts during last 32 years but these companies did not act upon this agreement. He said that engine, gear-box, transmission, power steering, balancers, fuel injectors must be manufactured in Pakistan. .The auto sector which consists of passenger cars tractors, trucks, buses, LCVs and 2/3-wheeler assemblers is supported by 3,000 APM companies which provide 3 million direct and indirect jobs to skilled workers, technicians, engineers and management professionals in the country. It is to be noted that auto sector is one of the top 3 contributors to government tax revenues and LSM growth in Pakistan. This sector is fully documented and part of the formal economy.
He further stated that encouraging the auto industry already existing in the country would have been the best option available to the government to speed up economic growth, attract foreign investment & create massive employment opportunities. Mian Iqbal Hassan said that the auto policy formulation was being spearheaded by Minister for Privatisation and Deputy Convenor of the ECC Committee on auto sector, who held several parleys with stakeholders to get first hand knowledge of the industry's capabilities and potential for stimulation of economic growth. but it is surprising that, at the last minute, the task of finalising the auto policy was taken over by the Chairman, Board of Investment, Miftah Ismail, who was never a part of consultations with the auto parts manufacturers (APMs) and hence, may not have a clear understanding of the ground realities, dynamics and potential of the domestic auto sector, he added.
Existing assemblers and APMs have already conveyed to the government, their commitment to make Greenfield investments amounting to hundreds of millions of dollars for setting up new plants and for introduction of new vehicle models MCCI's ex-President stated that during January-December 2015, 45,000 used vehicles with sales value of Rs 67 billion were imported into Pakistan. Had these vehicles been produced in Pakistan with local parts, a total of 143,000 jobs could have been created in the country. He highlighted that Pakistan is the only one of the 40 automobile producing countries which allows import of used cars.
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