Automotive policy: Exclusive incentives for new players blocked

[airmarshal]

Automotive policy: Exclusive incentives for new players blocked - The Express Tribune


ECC puts off decision, issues directives for more consultation at ministerial level. PHOTO: REUTERS

ISLAMABAD:
The government’s plan to bring a European car manufacturer for breaking the monopoly of existing car assemblers seems to be fizzling out as a nexus of assemblers and bureaucrats has again blocked preferential incentives for new foreign players.

Without getting preferential treatment, no new foreign manufacturer – Volkswagen or Audi – can establish footprints in Pakistan due to a strong network of the three existing assemblers, according to government officials seeking introduction of a new brand in Pakistan.

Auto industry enjoys unequaled run of success

The Ministry of Industries and Production on Monday tabled a revised automotive development policy for approval of the Economic Coordination Committee (ECC), again offering the existing assemblers similar tax incentives that the government wants to give to new investors.

However, a last minute intervention by Water and Power Minister Khawaja Asif stopped the ECC from approving the summary. Asif pointed out that approval of the policy should be deferred as Board of Investment Chairman Miftah Ismail was not present in the meeting.

Ismail and Asif were members of the committee that drafted the revised policy. However, the Ministry of Industry’s summary was different from what had been agreed at the committee level, said a top government functionary, prompting Asif to call for putting off a decision.

ECC Chairman Finance Minister Ishaq Dar agreed to Asif’s objection and deferred approval of the policy. “The ECC directed that more consultations on the auto policy at the inter-ministerial level be carried out,” said the finance ministry.

It was the second time in the last seven months that the ECC could not take the decision.

Trick

In October 2013, the ECC constituted a committee to propose the new automobile policy. However, even after two and a half years of work, the document still carries a bonanza of huge benefits for the existing players. In August 2015, the ECC also deferred the policy approval and asked Khawaja Asif’s committee to go back to the drawing board.

During deliberations,the committee proposed to delete Category C that offered same tax benefits to the existing players. It also agreed that the definition of Category A that offers incentives to the new manufacturers should be slightly revised and words “new brand” should be added to make sure that the existing players did not get the tax benefits.

However, contrary to the understanding reached at Khawaja Asif committee level, the Ministry of Industry’s summary implicitly offered similar benefits to the existing players. Its revised definition of Greenfield investment reads, “Greenfield is defined as the construction of new and independent automotive assembly and manufacturing facilities by an investor for the production of vehicles, not already being manufactured/ assembled in Pakistan”.

By this definition, the assembly of Camry Toyota will be treated as new investment, which will be excluded if the word “new brand” is inserted in the Greenfield definition, a senior government functionary told The Express Tribune.

In its new summary, the Ministry of Industries also excluded the word “new” from the Greenfield definition, making sure that the existing players also get similar benefits, said the official.

The delay in approval of the new policy is also going to the benefit of the existing assemblers.

“We will make sure that the new policy is approved within this month, which will also offer a level playing field to the investors”, said BoI Chairman Miftah Ismail, while talking to The Express Tribune. He said the new policy would also support the establishment of new foreign brands in Pakistan.

Auto industry expects up to $5 billion investment

However, the new investment policy under the Ministry of Industries seems to be a nuisance for new investors. Germany’s biggest and the world’s second largest automobile manufacturer in terms of market share, Volkswagen wants to do business in Pakistan, provided a competitive business environment is available.

The FBR has also opposed extending any incentive to existing players. “The existing manufacturers have availed concessions for two decades and extending further benefits to them will be of no use,” said the FBR. It also questioned the technological advancements by the existing assemblers.

 

[airmarshal]

I have always knew it. This govt does not have conviction or leadership to solve problems of our country. A govt that is itself a cartel cant break monopolies of cartels like the auto assemblers of Pakistan.

 

[Hyde]

The sooner we allow the western markets, Chinese market and American market to introduce their toys in Pakistan, the better for Pakistan automobile industry to thrive at much faster pace

It will not only break the monopoly of trio (Toyota, Honda, Suzuki) but force them to heavily reduce the prices.

I think Pakistan should only charge 5% custom duty for importing cars in Pakistan so all of us can send a car to our loved ones and it will allow lower middle class families to afford the luxury of owning the car. In UK you can buy good cars for only 700 pounds, if the Government makes friendly automobile policies and allows us to send cars older than 3 years of age, you will see Ford, Vauxhall, Peugeot cars everywhere in Pakistan with tag price starting from only 1 lakh rupees

 

[Blue Marlin]

The sooner we allow the western markets, Chinese market and American market to introduce their toys in Pakistan, the better for Pakistan automobile industry to thrive at much faster pace

It will not only break the monopoly of trio (Toyota, Honda, Suzuki) but force them to heavily reduce the prices.

I think Pakistan should only charge 5% custom duty for importing cars in Pakistan so all of us can send a car to our loved ones and it will allow lower middle class families to afford the luxury of owning the car. In UK you can buy good cars for only 700 pounds, if the Government makes friendly automobile policies and allows us to send cars older than 3 years of age, you will see Ford, Vauxhall, Peugeot cars everywhere in Pakistan with tag price starting from only 1 lakh rupees

can you tell me what "good" car you can get for 700?
as fot the british motoring industry for pakistan.. theres vauxhall which is a good move and mini but thats not happening.

quick fact, we make more japanese cars then japan

 

[Path-Finder]

it is pretty amazing that the government got put in its place rather the government telling these thieving Japanese car makers to take a hike. Well I suppose Pakistan will be enjoying 1980's model's for another 50 years.

 

[slapshot]

pain is inevitable suffering is optional. This nation loves to suffer and abused. What would happen if some protests are staged, creating a pressure point forcing GOVT to make vehicles affordable? I wonder if some one can put a lawsuit against poor safety standards in car like Suzuki Mehran. These thugs are needing to be tamed by manhandling.

 

[Azadkashmir]

i know a guy he exports cars to pak he has made alot of money and he pays bribe pak customs and secuirty brings luxury vehciles and has even donated small cars as bribes. he living good life in pak whenever he goes. pak a mafia country were anything is for sale. lets just say some of the cars are not even legal.

pakistanis need to learn from mad max, learn metal work and weld and engine can be souced easily. make abuggy it does the job, take family to market. call it mad masaoud.

 

[Zibago]

i know a guy he exports cars to pak he has made alot of money and he pays bribe pak customs and secuirty brings luxury vehciles and has even donated small cars as bribes. he living good life in pak whenever he goes. pak a mafia country were anything is for sale. lets just say some of the cars are not even legal.

pakistanis need to learn from mad max, learn metal work and weld and engine can be souced easily. make abuggy it does the job, take family to market. call it mad masaoud.

Welcome back

 

[The Sandman]

Is mulk ka kch ni hona 2012 se le ke abhi tak ek proper autopolicy ni bn ske ye log wah

 

[Azadkashmir]

i noitced over the years that everything that a pakistani dreams about never comes true. since kid i have come across paks that alway wnated our own national car industry our design, in mosque there were kids that would draw cars really nice designs wnated to be engineers etc. me i wnated to be computer engneer and industrilaist you know bring over computer designs to pak and make motherboards. i did get degree in computing it not the same as what i thought i would be. everything that pakistanis wnats for his country will never come true cos of few selfish crooks with no visions and want us to be seen as third world sh it hole. another thing i learned over time is a skill is a monoply in pakistani community but american or english will pass that on to his people he will teach them.

i give you another sad exmaple of our state you go to paksitan and for god sake they think we are dumb bastrds that we dont know anything a bout quality control or engineering or electrinic for exmaple your generator has died they make up all kind of excuse to ripp you off with knock off chinese part and when you confront them they start stutter
The biggest bull crap i cant take is yaara we are advance country brrooo we got engineers i be thinking yaara you cant make sh it it all chinese crap imported and that the stuff chinese dont buy.

for god sake pakistan still uses flash lights that look like they made out of baked bean tin. Have paks never heard of cree t6.

sorry about the ranting but i belive it time to tell the truth. apart from kebabs and honest hard working women in the field while men just sit there and smoke fake ciggerrtes, what can pak make that is quality.

 

[airmarshal]

We want to be molested and like the indigintiy and suffering that this brings. This is why we pay exorbitant prices equal to US dollar value of cars here but get a fifth of the quality expected from these high quality brands.

Pakistan will live with their high priced cheaply built Suzukis, Hondas and Toyotas, some with 35 year old engines as long as we dont make the change happen within ourselves and decide - no more humiliation and suffering.

 

[AZADPAKISTAN2009]

It is really disgusting that no car is designed 95% in Pakistan after almost 40-50 years due to these failed policies

 

[Hyde]

can you tell me what "good" car you can get for 700?
as fot the british motoring industry for pakistan.. theres vauxhall which is a good move and mini but thats not happening.

quick fact, we make more japanese cars then japan

Vauxhall Zafira for 700, about 8 years old but age factor doesn't matter so much in Pakistan for as long as the car is doing its job

Ford Focus and Vauxhall Astra would all be bought for under 1000 pounds and in very good condition. Imagine exporting it to Pakistan and with little custom duty and you have a wonderful car for less than half price of its rivals with good innovative designs rather than traditional mehran style of same body work from the 1980s

 

[Blue Marlin]

Vauxhall Zafira for 700, about 8 years old but age factor doesn't matter so much in Pakistan for as long as the car is doing its job

Ford Focus and Vauxhall Astra would all be bought for under 1000 pounds and in very good condition. Imagine exporting it to Pakistan and with little custom duty and you have a wonderful car for less than half price of its rivals with good innovative designs rather than traditional mehran style of same body work from the 1980s

so your british as well? why do you not put up the british flag?
zafiras are for poor large families. typically they have 150k+ miles with screaching fan belts and squecky breaks.
or it can be used as a [sow] skip on wheels. i have using publc transport for about 10+ years and now im treating my self to a gt speed as the times dont suit me and i get teased for not having a car.

 

[Hyde]

so your british as well? why do you not put up the british flag?
zafiras are for poor large families. typically they have 150k+ miles with screaching fan belts and squecky breaks.
or it can be used as a [sow] skip on wheels. i have using publc transport for about 10+ years and now im treating my self to a gt speed as the times dont suit me and i get teased for not having a car.

My cousin bought Vauxhall Zafira (7 seater) from eBay auction for around 700 pounds with around 60k mileage and very good condition from inside out. He got a bargain I think otherwise similar cars are little more expensive but it is true that you can easily get a very good car for less than 5 lakh Pakistani rupees and such cars would cost 1.5 million rupees in Pakistan.

The price of brand new cars is of course very high and I am talking about cars older than 3 years.

I usually keep 1 flag for Pakistan and UK each but when I am travelling to Pakistan, I usually change both flags to Pakistan and I must have forgotten to change it again