The Federal Minister for Industries and Production, Ghulam Murtaza Khan Jatoi, said that the government will support local manufacturers to increase export and help them capture international markets. Inaugurating Pakistan Auto Show (PAPS), which was held by the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) at the Expo Centre, Jatoi said that this exhibition depicted the potential of the auto engineering sector of Pakistan, which has played a major role in the economic growth of Pakistan in recent years.
This is evident from the phenomenal growth in the auto sector, which once again crossed the barrier of 218,000 automobiles in the previous financial year, he said. Following the new auto policy announced by the government last year, many international automotive companies are keen to set up assembly plants in the country, he said.
"The China Pakistan Economic Corridor (CPEC) also includes projects for setting up of industrial zones and power-generation plants along the entire route of the corridor," he said. PAAPAM chairman Mashood Ali Khan said that the auto sector was a fully documented industry and it ranked amongst the top three taxpaying industries of the country.
"However, the industry's performance and growth is being threatened by a few issues that can be solved if the government pays more attention to the policy prescribed in the ADP 2016-2021 and execute investment plan accordingly," he said. He said that the Auto Development Plan 2016-2021 was announced by the government after a long discussion with the stakeholders, and PAAPAM's suggestion to include the existing players and auto parts manufacturers for incentive was promised, but it was omitted from the final ADP.
Localisation of hi-tech parts is only possible if the government supports the industry with investment incentives, in the wasy as same as in special economic zone, he said. He requested the minister to give PAAPAM the status of an SEZ for setting up plants for parts which were not produced locally.
He said that PAAPAM proposed the following conditions to qualify for an SEZ status under the ADP: (a) Greenfield investment by global or domestic auto parts manufacturers (b) parts for engines, transmission, suspension, and body that had never before been produced in Pakistan. Besides, a level playing field should be offered to the existing assemblers as well.
He also highlighted the issues of regulatory duty imposed on steel two years ago when the prices of steel were low. But he added that at present international prices were constantly rising, which made it more difficult to bear the burden of regular duty. He said all imports of raw material under SRO 655 and SRO 568 should be exempted from regular duty as similar concessions were granted to other sectors.
He urged the government to follow in the footsteps of Japan, Korea, and other countries which prepared their trade policies like warfare strategies, so that their local industries did not suffer, and now their companies were among the top auto manufacturers around the globe.
The vice chairman of Toyota Corporation, Toshiya Azuma said in his speech that "Pakistan's new auto development policy offers great incentives to the auto industry, and is already attracting many new automakers. The new policy will lead the auto sector to more business growth, while it will surely increase consumer choice." He said that the auto industry was important for every developed country. This industry is often referred to as "mother of all industries" because it has many forward and backward linkages. Many developed economies achieved great progress because they had a strong auto manufacturing base, he said.