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Manufacturing Plants of New Auto Makers Are Being Delayed in Pakistan

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The current Japanese auto makers in Pakistan continue to protest against the auto policy which favors new entrants by offering them tax breaks and various other investor-friendly incentives. These car manufacturers either want to prevent new competition from entering the Pakistani market or want the same benefits for themselves as well.

It is common knowledge that the Japanese car manufacturers have a monopoly in Pakistan and they have used it to earn extra profits for their products while offering poor services and below par quality standards. Pakistani car buyers have been forced to buy obsolete models and that too at higher prices. Then there’s the menace of late car deliveries and enhanced premiums on booked cars.

Against this backdrop, the Ministry of Industries and Production recently held a meeting with the new entrants who have announced to introduce new vehicles in the market. Ministry Secretary Khizar Hayat Gondal and Board of Investment (BoI) Secretary Azher Ali Choudhary co-chaired the meeting.

Representatives from Kia Motors, Foton JW Auto Park, Pak China Motors, Hyundai Motors, Eagle Automobiles, Habib Aneeq Private Limited, Gulya Motors, Khalid Mushtaq Motors, Lucky and United Auto Motors were part of the meeting.

Complaints on Delays by the EDB

According to informed officials, the new car makers complained that they have imported the required machinery to set up car manufacturing plants in Pakistan but the Engineering Development Board (EDB) is causing delays in processing their cases.

Sources say that the local auto makers have argued with the EDB that they are already making the cars that the new market players plan to produce, therefore, pressurizing EDB against granting the required approval for the new players. This is expected to cause even more delays in the launch of new car brands in Pakistan.

Ministry’s Response

The ministry has assured the new entrants that their issues would be addressed.

The industries secretary affirmed that Auto Policy 2016 in critical for the growth of the auto sector and “due priority to this area will be accorded by all the relevant government agencies for speedy processing of investment proposals and other allied facilitation required in this regard.” He assured investors that no one will be allowed to cause any further delay and the ministry will make sure their cases are processed smoothly.

Gondal announced that similar meetings will be held every month to put the investment proposals on the fast track. It’s was agreed that the next meeting will be held in the second week of July.

The EDB has been ordered to ensure speedy processing of all cases within the auto policy framework and determine the eligibility for incentives under the green field investments.

Car manufacturer representatives expressed satisfaction over the assurances and hoped for healthy competition in the future.

Progress in New Vehicle Launches

It is said that Volkswagen Commercial Vehicles is finalizing its partnership with Premier Systems Private Limited, the authorized importer of Audi vehicles in Pakistan, to set up a manufacturing or assembly plant for its Amarok and T6 vehicles.

France’s Renault, South Korea’s Hyunadi and Kia motors have already finalized deals with local companies to assemble vehicles in Pakistan.

Some of the investors are at advanced stages of their project execution and some vehicles are expected to be launched in the market by the end of 2017.

  • I can’t think of a single logical reason why this delay is happening… It would ONLY create jobs, bring in FDI, offer better products to consumers, make the market more competitive and above all.. Project Pakistan in a positive light as an emerging market.. Why this isn’t a priority is beyond my comprehension.

    • big fat “japani car” mafia will not let anyone new enter in the market, unless they get something out of it. Gov. comes and goes mafia stays

    • same old reason probably.. some ‘aaficer’ in EDB is holding on to the file until he is fed his haram ki kamai…

    • This is a priority that’s why we are seeing new entrants. Bureaucracy and technical board delays these are, good that someone is listening and addressing.

    • just hustling for bigger bribes from the existing players. once they give in and offer bigger bribes the imported machinery will never be given approval and it will rust away at the port. this has happened before when the law ministry took 3 years to decide on a case of power generation machinery import. the machines rusted away at karachi port and the chinese company that imported them suffered huge losses and had to pull out.

      • And country is made up those shittyy people, it’s the same thing dumbasss. Keep your patriotism to yourself.

        • you go to hell with your selflessness! we are with the patriotism and you stay in self created word,

          • @waheed_dubai:disqus Ahmed is just showing the mirror in a blunt manner. Showing the mirror in considered selfishness in this Pure country. Patriotism is a disease as Self-Catharsis stops because you do not want to listen to any criticism.

            Kindly come out of your own cocoon to understand that Pakistan do have huge problems and we have to address these problems. We are top in corruption and nepotism. Our society is decaying at a rapid pace as well.

        • I agree with you Ahmed. If you visit any Government dept. in this pure Islamic country then everyone will always tell you “Bhai File ko Pehyay ( wheels) to lagain”. In order words you have to give a lot of Bribe to make things work in Pakistan.
          This is a fact. Overly patriotic or blind patriotic people are not ready to face the truth that corruption is rife in this country.

  • If you have special SRO then all machinery would be Zero rated Custom Duty :
    Sales Tax Zero Rated
    Income tax zero rated (after approval of sindh minister)
    Rahi Bat Spare Parts Ki Us Pae EDB Wale Planning Pe 5% Duty Allow Kar Dete hai 35% Duty Ko

  • Major investment decisions will be put on hold until elections. The next govt will completely revamp economic policies as per their wisdom, so no one ants to take the risk

  • Renault, KIA and Hyundai…?
    Yar koi Bugatti shugatti, Ferrari sharrari laou…!

  • Looks like the case of involved officials being bribed to cause delays. At least, that is what happens in this country.

    BTW, I was thinking what happened to those dth services providers.. they won/purchased licenses still no sign of any marketing etc from any of them. Are they even working on bringing DTH?

  • Aik company ko to masla nahi ho ga baqion ka koi pata nahi, that is hyundai which is being launched by mian mansha, nishat group that is very close to shareefs !

  • Last Year alone Toyota Indus Motors Ltd made nearly 1 Billion US dollars in Revenue on the Sales of Toyota Corolla alone… What do you think that they cant bribe a few EDB high ups to keep profiteering from a virtual monopoly that they already have in the market.
    Pakistani buyers end up using low quality products with half as many features as the same cars being sold in Middle East and Europe yet the prices are 15 to 20% higher than those in ME and European Markets.

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