Cars Under 1,000 CC Aren’t Fuel Efficient in Pakistan: Ministry of Industries

Contrary to the general perception, small cars of 1000 cc and below are not at par in terms of fuel efficiency in Pakistan when compared with other countries, mainly because of old technology used in these cars. This was admitted by the Ministry of Industries and Production recently.

According to the ministry documents, higher cc vehicles produced in Pakistan are at par with other countries in term of fuel efficiency and other standards, however, the same cannot be said for small cars of 1000 cc or below.

Ministry said that low fuel efficiency of small cars is mainly due to old-age technology, that has never been upgraded.

While auto companies upgrade some parts of new models of these under 1,000 cc cards, mechanical of such small cars has remained same over the years.

Currently these are following automobile companies manufacturing/ producing vehicles in Pakistan:

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Under the new Auto policy following two categories of New Investors with different incentives is allowed:

Category-A

Greenfield Investment is defined as the installation of new and independent automotive assembly and manufacturing facilities by an investor for the production of vehicles of a make not already being assembled/manufactured in Pakistan. (Note: “Make” is defined as any vehicle of whatever variant produced by the same manufacturer)

Investment Incentives

(a) Duty-free import of plant and machinery for setting up the assembly and/or manufacturing facility on a one-time basis;

(b) Import of 100 vehicles of the same variant in CBU form at 50 percent of the prevailing duty for test marketing after ground breaking of the project;

(c) Concessional rate of customs duty @ 10 percent on non-localized parts and @ 25 percent on localized parts for a period of five years for the manufacturing of Cars and LCVs;

(d) Import of all parts (both localized and non-localized) at prevailing customs duty applicable to non-localized parts for manufacturing of trucks, buses and prime movers for a period of three years.

Category-B

Brownfield Investment is defined as revival of existing assemblies and/or manufacturing facilities, that are non-operational or closed on or before July 01, 2013 and the make is not in production in Pakistan since that date and that the revival is undertaken either independently by original owners or new investors or under joint venture agreement with foreign principal or by foreign principal independently through purchase of plant.

Investment Incentives

(a) Import of non-localized parts at 10 percent rate of customs duty and localized parts at 25 percent duty for a period of three years for the manufacturing of Cars and LCVs, and

(b) Import of all parts (both localized and non-localized) at prevailing customs duty applicable to non-localized parts for manufacturing of trucks, buses and prime movers for a period of three years.

However it is worth mentioning that government has not restricted the imports of new vehicles.