Japan has reportedly urged Islamabad at the highest level to review its stringent condition banning non-filers to purchase new vehicles, well informed sources told Business Recorder. The issue, sources said, was taken up during the recent visit of Japanese Minister for State for Foreign Affairs with Pakistani officials. The sale of Japanese cars' has declined by 30 percent since the imposition of non-filers condition in the federal budget 2018-19.
The sources said, Kinji Saito, the General Manager of Suzuki's Global Automobile Operations also called on Pakistan's ambassador to Japan and made the following points: (i) Suzuki Motors is going to replace Suzuki Mehran (800 CC) with Suzuki Alto (660 CC) which is presently being manufactured in Japan; (ii) Suzuki Motors is ready to bring in substantial new investment to further expand its operations in Pakistan, as it is Suzuki's second largest market after India. However, in order to do so, Suzuki would like to get the same incentives as are being offered to new entrants under GoP's Auto Policy 2016-21; and (iii) sale of Suzuki Motors are expected to decline as a result of an amendment in Pakistan's 2001 Income Tax Ordinance, whereby effective since July 2018 non-filers (since July 2018 non-filers) of Income Tax cannot purchase new vehicles. Suzuki stated that it would appreciate if this condition could be reconsidered.
Under GoP's Auto Development Policy effective since July 2016, a tariff of only 10 percent is imposed on unassembled auto parts imported by new and re-entrant manufactures, whereas a 30 percent tariff is imposed on such imports by existing manufacturers'.
The sources said, Osamu Suzuki, chairman of Suzuki is scheduled to visit Pakistan on 26-28 November 2018 to discuss Suzuki's future engagement in Pakistan.
Pakistan's ambassador to Japan maintains that Suzuki has committed to bringing new investments into Pakistan provided "we are ready to offer them the incentives given to the new investors under our Auto Policy. This has been a long standing demand by Suzuki, which Pakistan has not been able to accommodate". The ambassador recommended that "we need to explore creative ways in which we can accommodate Suzuki's request without compromising on our overall auto policy". The visit of Chairman Suzuki to Pakistan after a gap of 11 years will be used to present Suzuki's request at the highest level.
The ambassador further stated that UNIQLO delegation visited Pakistan on 7-9 August 2018 and was highly satisfied with their interactions with a number of leading textile/apparel manufacturers in Pakistan. UNIQLO has now stated that it plans to send another follow-up delegation headed by one of its senior executives to look at other apparel manufacturing units in Pakistan. The areas of their specific interest have already been shared with Ministry of Commerce and TDAP.
Ambassador stated that UNIQLO is one of Japan's largest clothing/apparel chain with 236 manufacturing factories in Asia and 3,370 outlets around the world. Their entry into the Pakistani market carries huge symbolic significance. All concerned may, therefore, continue to facilitate them to attract and retain their presence in Pakistan, he suggested.
UNIQLO is serious in pursuing business options in Pakistan both on the procurement and manufacturing side. They have requested for similar support for the senior level delegation visiting Islamabad by the end of September 2018.
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