The Ministry of Industries and Production has rejected the proposal of devising 10-year policy (2019-2029) for the import and re-export of used vehicles. According to the office memorandum of the ministry, a meeting was held at the Engineering Development Board (EDB) with the representatives of the car dealers federation to analyze the said proposal wherein it was unanimously observed that dealers were interested in commercial import of used/old cars.
As for the investment plan of USD 3.2 billion, the same seems irrational as importers do not plan to build any manufacturing facilities in near future. Therefore EDB has opined that proposed plan would negatively affect existing OEMs, new entrants and auto part manufacturers.
Furthermore, it said that it was important to consider that Auto Development Policy (ADP) 2016-21 has attracted investment of more than USD 1.3 billion so far from foreign investors who are at various stages of setting up their projects.
Under ADP 2016-21, fifteen new investors have been granted Greenfield status and under Brownfield category two closed down units have been revived, the existing OEMs are enhancing their capacities, three new entrants have started production and other new entrants are expected to start their production/complete their manufacturing facilities shortly. As per business plans, few new entrants have plans to export as well, it added.
Moreover, it said that permission of commercial import of used vehicles for domestic market would be against the spirit of ADP 2016-21 which was prepared in consultation with Board of Investment, FBR and Ministry of Commerce etc and approved by ECC of the cabinet. It said that import of used cars would be at odds with the relevant import policy provision hence the ministry was in favor to reject the said proposal.