The government has failed to reach an agreement on new auto policy as the manufacturers opposed duty differential giving preferential treatment to the new entrants, Business Recorder learnt on Tuesday.
Sources confided that the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has rejected the relaxation and preferential duty for the new entrants in car manufacturing sector.
They have explicitly communicated to the government that they would not compromise on this, as they wanted level plying field for all, they added.
Meanwhile, an official release said that a 13-member committee has been formed to study the draft auto policy prepared by the Engineering Development Board.
This was decided in a meeting of chairmen/CEOs of car assembly sector and officials of PAAPAM held here on Tuesday under the chairmanship of Imtiaz A. Rastgar, Vice-Chairman and CEO, EDB.
The committee will again meet on May 09 in Lahore to finalise its recommendations. Zahid J. Yaqub GM (Policy) EDB will steer the committee proceeding. Before that car assemblers and vendors will meet separately to study the policy.
Imtiaz A. Rastgar in his welcome address explained that long-term policy has been drafted on the demand of the industry to enable it in making consistent investment decision.
Draft policy is aimed to have a holistic view of industry to seek solutions on investments, competitiveness and integration in international supply chain.
The proposed scheme therefore provides tariff and non-tariff solutions.
When the industry is switching over from Non TRIMs compliant Deletion Programmes to an open and competitive Tariff Based System, the proposed policy provides the safe transition of the industry.
The much-debated Tariff Based System, which works on the principle of higher tariff rates on indigenized parts and lower tariff on un-indigenized parts will be implemented through the budget 2006-07.
In order to make the industry more competitive and inline with the global trends, important measures such as incentives on research and development (R&D), designing and styling, testing, training and capacity expansion were discussed in detail.
A brief presentation on Productive Assets Allowance (PAA) of South African model was also made by Zahid J. Yaqub, General Manager (Policy Development), EDB.