Accelerating growth: Industries ministry proposes auto research institute

It will provide services such as market analysis, testing and certification.

ISLAMABAD:

The Ministry of Industries and Production has strongly advocated the establishment of a research and development institute for the automobile sector in an effort to come up with extensive studies and analyses for the promotion of this heavy engineering industry.

Talking to The Express Tribune, a senior officer of the Ministry of Industries said the proposal was floated while keeping in view the pressing need of a state-of-the-art research institute for the promotion and advancement of the automobile industry.

He pointed out that every country in the region and many countries across the world had specific automotive research and development institutes and that prompted the ministry to include the suggestion in the proposed automobile policy.

Basic functions of the institute will be research and market analysis, testing and certification, education and training, e-services and regulation, product improvement and designing as well as human resource development.



The institute will also be engaged in providing technical services for manufacturing operations mainly development of various products, technical consulting, test and quality inspection and authentication as well as manufacturing of special vehicles according to market demand and requirement.

The official stressed that the auto sector was growing rapidly across the world on the back of new technology and advancement of knowledge and without focused research and analysis of market dynamics, Pakistan’s industry would not be able to compete in the open market.

At present, unlike other countries, Pakistan has a small unit that handles affairs of the automobile industry and works under the Engineering Development Board. This wing has neither the capacity nor the resources to undertake research and provide related services for the sector.

Previously, an institute named Auto Testing and Training Centre (ATTC) was established in 1997, but because of a lack of resources, it has become irrelevant and its machinery has also become obsolete.

The proposed automobile policy is at advanced stages of development and is likely to introduce major incentives for encouraging fresh investment and promoting car financing and reduce duties on auto-part imports.

The government is considering curtailing import duty by 22% to 40% across the board on localised and non-localised car parts for new players in the industry in a bid to break the monopoly of existing manufacturers.

At present, the import duty on non-localised parts is 32.5% and 50% on localised parts of all kinds of vehicles including cars, trucks, buses and tractors.

Under the new policy, for the first time in five years, a 10% import duty may be imposed on both localised and non-localised parts of completely knocked-down (CKD) kits as an incentive for the new auto players to create an atmosphere of investment and competition.

trade.Published in The Express Tribune, March  27^th,  2015.

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