Policy sparks concern among auto part makers

PAAPAM complains entire focus is on new entrants

KARACHI: In a reaction to the new auto policy that is devoid of incentives for the existing industry players, the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) has voiced concern over certain aspects of the policy.

In a statement, Paapam Chairman Mumshad Ali said the basic objective behind the much-awaited auto policy should have been to stimulate rapid growth and investment in the automotive sector through incentives for all - new entrants, existing assemblers and auto part manufacturers.



However, he said the policy seemed to be focusing entirely on the new entrants.

Ali pointed out that auto policies in regional countries proved to be a catalyst for growth of investment. “They acknowledge contribution of the automotive sector and seek to enhance its role,” he said.

However, according to him, the auto policy approved by the ECC on Friday would not make any significant contribution to the goal that the finance minister had set for himself and the country.

“Encouraging the auto industry already existing in the country would have been the best option available to the government,” he remarked.

Ali highlighted what he said were key shortcomings of the policy. Firstly, the SEZ incentives for setting up new capital-intensive plants by the auto part manufacturers to produce new parts must be committed to Paapam.



Secondly, existing assemblers, on condition of setting up a new Greenfield plant, should also be granted the same incentives as offered to the new entrants. Thirdly, import of used cars under the garb of gift scheme is the biggest repellent in the auto sector and it needs to be curtailed.

Published in The Express Tribune, March 22^nd, 2016.

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