Auto industry dissatisfied with the budget

Decision to allow duty-free imports of hybrid cars irks manufacturers.

Farhan Zaheer June 13, 2013
Duty-Free: 1,200cc is the engine limit below which all hybrid cars will be tax exempt. PHOTO: FILE

KARACHI: The auto industry, like other sectors expecting too much from the pro-business government, has expressed dissatisfaction with the first budget of the Pakistan Muslim League - Nawaz government.

Pakistan Association of Automotive Parts Accessories Manufacturers (Paapam) expressed reservations on government plans to import hybrid cars up to 1,200cc with no import duty, saying that it will not be helpful to the local auto industry.

Paapam Chairman Munir Bana said, “The decision to import duty-free hybrid cars is a futile exercise, and it will not serve its purpose of reducing fuel consumption in the country.”

According to our calculations, said Bana, importing duty-free hybrid cars is an expensive choice to make even if you consider the benefits of fuel savings.

The auto industry wants to see a concrete automobile policy from the new government so that the industry can start working on its five-year investment plan, said Bana, who was talking to a group of journalists on Thursday.

Automobile industry officials are saying that duty-free imports of hybrid cars was an unusual step for the new government, continued Bana. The decision seems to benefit few individuals who are already interested in importing hybrid cars.

However, an official of a local car assembler told The Express Tribune that the duty-free import of 1,200cc hybrid cars will not impact original equipment manufacturers.

All Pakistan Motor Dealers Association (APMDA) Chairman HM Shahzad, said that the decision to import hybrid cars was suspicious because the government had restricted its engine limit to 1,200cc engines.

There was only one company in the world that makes hybrid cars below 1,200cc, and it was a Chinese company, he said, adding that even after reducing the duty to zero percent, the price range of these imported hybrid cars will not be less than Rs2.5 million, which is surely not meant for the middle class.

Car importers seem unhappy with the government as it continues the import policy of the previous government, according to which car importers can only import three-year old used cars in the country.

Published in The Express Tribune, June 14th, 2013.

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Anonymous | 8 years ago | Reply

Well PAMA and automaker's research is quite futile as well. Honda makes Jazz Hybrid which has a 1198cc engine.

Ak47 | 8 years ago | Reply

Local manufactured cars are pathetic.I d rather prefer a used imported one.

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