Pak-Suzuki had planned to invest around $460 million in the country following the announcement of the new auto policy. However, the plan seems to be left in the lurch because of the attitude of the Ministry of Finance and Board of Investment (BoI) who refuse to take the matter seriously. A senior official of Pak-Suzuki in Karachi has reported this matter on Tuesday.
All of this is despite the fact that the company has filed all the completed paperwork and submitted it to the government. However, Pak-Suzuki is still waiting for a reply from the relevant ministry and Ishaq Dar, Finance Minister, has asked the company to now contact the Chairman of BoI, Dr. Miftah Ismail.
The reason for the investment by Pak-Suzuki is to set up a its second car plant in Pakistan. The company is also constantly trying to avail the tax breaks for the next three years, similar to those accorded to the new entrants as per the new auto policy.
Regarding this matter, the top management officials have met with the members of the relevant Pakistani ministries to discuss the issue. Managing Officer and Division General Manager of Pakistan Automobile Division at Suzuki Motor Co. Ltd., Hirofumi Nagao, met with Ishaq Dar in December of last year and the talks resulted in the Pakistani government promising to provide an even playing field to any prospective investors.
Decision Should Not Be Delayed Further
A Pak-Suzuki official did say that they the company is waiting for the 2-3 year tax concession and then they will start the investment. However, the decision shouldn’t be delayed any further since after the Japanese New Year in March, the company may just decide to invest this very same amount in India – again – and Pakistan will lose out on a great opportunity not only because of this loss of investor but also potential future ones.
The official also said that because this investment would mean the employment of around three thousand direct jobs and a lot more than that for indirect jobs, the Engineering Development Board (EDB) and the standing committee of Industries and Production and Federation of Pakistan Chamber of Commerce and Industries (FPCCI) are already in favour of this.
However, according to Pak-Suzuki, the problem lies with the potential disinterest shown by Dr. Miftah Ismail with regards to its new future investment in the automobile industry.
Pak-Suzuki currently imports two of its new cars, the Suzuki Vitara and Suzuki Ciaz. However, that is going to be very difficult now with the imposition of the 100% cash margin condition by the State Bank of Pakistan. So it now plans to build the models for sale here in its new plant.