Development plan: Auto industry finalises recommendations

KARACHI:

The automobile industry has finalised its recommendations for the upcoming five-year auto industry development plan (AIDP).

The plan, jointly prepared by the Pakistan Automotive Manufacturers Association and Pakistan Association of Auto Parts and Accessories, emphasises the need of a balanced policy for import for used cars and continuation of a long-term balanced policy rather than short ones.

The current auto-industry development plan will expire in 2012 after which a new five-year plan will be implemented.

The auto industry insisted that the present tax rate needs to be maintained for the development of the sector.

The production capacity of new cars is targeted to reach around 380,000 annually by 2017 against the current capacity of 300,000 units.

It also proposes to impose duty and tax on the basis of weight instead of units in order to curb under invoicing.

Indus Motor Director Sales and Marketing Raza Ansari said that if the suggestion to waive import duty on specific items is not accepted, it will result in increase of Rs40,000 to Rs50,000 in cars prices.

Implementation of the plan can improve the production capacity of the auto industry and help solve lift the country’s economy, he added.

Qaim Automotive Manufacturing CEO M A Jabbar said that the plan on hold for the last two years, has resulted in the suspension of local parts production.

The government’s friendly policies to international parts suppliers have affected the local production of parts massively, he added. He said that recommendations have been presented to the government and requested to be implemented in the upcoming budget.

Published in The Express Tribune, May 11^th, 2011.