Manufacturing Plants of New Auto Makers Are Being Delayed in Pakistan

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The current Japanese auto makers in Pakistan continue to protest against the auto policy which favors new entrants by offering them tax breaks and various other investor-friendly incentives. These car manufacturers either want to prevent new competition from entering the Pakistani market or want the same benefits for themselves as well.

It is common knowledge that the Japanese car manufacturers have a monopoly in Pakistan and they have used it to earn extra profits for their products while offering poor services and below par quality standards. Pakistani car buyers have been forced to buy obsolete models and that too at higher prices. Then there’s the menace of late car deliveries and enhanced premiums on booked cars.

Against this backdrop, the Ministry of Industries and Production recently held a meeting with the new entrants who have announced to introduce new vehicles in the market. Ministry Secretary Khizar Hayat Gondal and Board of Investment (BoI) Secretary Azher Ali Choudhary co-chaired the meeting.

Representatives from Kia Motors, Foton JW Auto Park, Pak China Motors, Hyundai Motors, Eagle Automobiles, Habib Aneeq Private Limited, Gulya Motors, Khalid Mushtaq Motors, Lucky and United Auto Motors were part of the meeting.

Complaints on Delays by the EDB

According to informed officials, the new car makers complained that they have imported the required machinery to set up car manufacturing plants in Pakistan but the Engineering Development Board (EDB) is causing delays in processing their cases.

Sources say that the local auto makers have argued with the EDB that they are already making the cars that the new market players plan to produce, therefore, pressurizing EDB against granting the required approval for the new players. This is expected to cause even more delays in the launch of new car brands in Pakistan.

Ministry’s Response

The ministry has assured the new entrants that their issues would be addressed.

The industries secretary affirmed that Auto Policy 2016 in critical for the growth of the auto sector and “due priority to this area will be accorded by all the relevant government agencies for speedy processing of investment proposals and other allied facilitation required in this regard.” He assured investors that no one will be allowed to cause any further delay and the ministry will make sure their cases are processed smoothly.

Gondal announced that similar meetings will be held every month to put the investment proposals on the fast track. It’s was agreed that the next meeting will be held in the second week of July.

The EDB has been ordered to ensure speedy processing of all cases within the auto policy framework and determine the eligibility for incentives under the green field investments.

Car manufacturer representatives expressed satisfaction over the assurances and hoped for healthy competition in the future.

Progress in New Vehicle Launches

It is said that Volkswagen Commercial Vehicles is finalizing its partnership with Premier Systems Private Limited, the authorized importer of Audi vehicles in Pakistan, to set up a manufacturing or assembly plant for its Amarok and T6 vehicles.

France’s Renault, South Korea’s Hyunadi and Kia motors have already finalized deals with local companies to assemble vehicles in Pakistan.

Some of the investors are at advanced stages of their project execution and some vehicles are expected to be launched in the market by the end of 2017.

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