BoI defends auto policy

The Board of Investment (BoI) has refused to sustain the pressure of the existing auto sector industries to amend Auto Policy, 2016. The BOI believes that the new auto policy was formulated to bring new entrants to Pakistan keeping in view the consumers' welfare to ensure good quality of cars and their speedy delivery.
Talking to a select group of journalists here on Tuesday, Spokesman for BoI Shah Jahan Shah said that the government is not willing to bring changes in the Auto Policy, 2016 under some influence, adding it would bring globally bad name for the country. "Pakistan has already been criticised for maintaining an inconsistent policy, therefore, the government is not in a mood to amend the policy under any pressure to accommodate some auto players," he categorically stated.
He was responding to a media report that Pak Suzuki Motors Company will review its decision to invest $460 million if the government fails to respond to its request for incentives. He further disclosed that some companies like Renalt, Ghandhara Nissan, Nishat, Mian Mansha Group, Kia, and Hundai contacted and applied for the incentives.
Dewan Motors and Faw China applied for incentives, but they are in the grey areas and their cases are under consideration. Dewan Motors imported kits after June 2013, and sold them in the market; therefore, it does not fall in the category of incentives. Faw Chinese Company started its products and is expanding its base; however, the company does 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 is not valid, adding the company has been operative in Pakistan for very long period. Talking about the Audi Auto Manufacturer, he said its representatives visited Pakistan and wished to invest in MKD (Medium Knock Down) and wanted only assembling in Pakistan. It is against the auto policy which promotes only CKD (completely knock down). Auto policy envisages that new entrant should strength venders' base and dealer network, besides creating new job opportunities in the county, he added.
The spokesman said the auto policy 2016 has been approved for brown investment and green investment and there will be no incentives for existing auto sector investors. He said 25 per cent growth in auto sector has been recorded in last two years. The Rationale of the policy, he said, is to discourage the practice of booking of cars against full amount and delivery in 6 months to one year. In addition, the prices of cars were higher in the region. The standard of emission and efficient fuel consumption was absentee as compared to regional auto players.
New auto policy has focussed on brown field and green field investments. The incentives under policy are meant for new entrants who have greater risk while entering a new market and require time to launch their products in local market. "We promise to give some incentives as an attraction to new entrants under the policy, however no incentives are there for old auto sector industries which have been working for more than 20 years in Pakistan," he said. Those industries whose production plants were closed down before June 2013 were given incentives for two years. The EAD-Ministry of Industries and Production were empowered to determine which incentives can be applicable on auto players, he added.