Auto industry'Inconsistent policies hampering foreign investment'

The auto industry has held the inconsistency of the government policies responsible for hampering foreign investment in the auto sector, Chief Operating Officer (COO) of a leading car manufacturing company told Business Recorder. Seeking anonymity, the COO recalled that the government had announced the Automobile Development Policy 2016-21 for the next five years in March this year following approval of the Economic Co-ordination Committee of the federal cabinet.
The policy that was announced after a delay of about three years aimed at providing incentives to the new entrants but the car makers are still reluctant to set up their production unit in Pakistan, he added. He pointed out that just after three months of the new auto policy, the government increased the Customs duty on all the imports and Regulatory Duty on the import of steel products that led the production cost up.
He was of the view that the government policy regarding import of hybrid cars has also failed to achieve the desired results as it has not saved as much foreign exchange under the head of fuel imports as it has spent on the import of hybrid cars. The facilitation on such cars could have been only viable if the petroleum prices were on the rising trend. On the contrary, the oil prices have been persistently decreasing not only in the international markets but also in Pakistan. Therefore, there was no logic in providing incentives on the import of such cars, he asserted.
He further criticised the discrimination in used car import policy and said the government set condition of three-year for the import of small cars while it fixed five year for big/luxury vehicles like Land Cruiser to facilitate a specific class of the society.
On the positive side of the sale of locally manufactured cars, the Chief Operating Officer said that due to decreased mark up more customers are buying cars on lease; as banks are registering considerable growth in car financing. He said that despite difficulties, the local car manufacturers are optimistic to surpass the car production target of 500,000 by 2021.