AIP draft marred by delays


KARACHI, Nov 28: The finalisation of the Auto Industry Plan (AIP) draft has been delayed despite holding of two meetings between the auto industry stakeholders and the government. The Economic Coordination Committee (ECC) in its October 2 meeting had set up a committee tasking it to finalise the AIP draft within 45 days, however more than 55 days had passed.

Two meetings were held on October 28 and November 13 with senior government officials on the AIP issue but failed to deliver any results. All auto-sector related bodies had submitted their pro-posals to the government prior to the meetings.

Talking to Dawn, Chairman Association of Pakistan Motorcycle Assemblers (Apma) Mohammad Sabir Shaikh said the delay in the preparation of the final draft was due to the Rawalpindi Ashura incident, illness of Federal Finance Minister Ishaq Dar, Muharram and busy schedule of Committee Convener Khawaja Asif, the new defence minister.

Shaikh said that so far the stakeholders have failed to meet Asif but were able to hold meetings with deputy convener and Board of Investment chairman Muhammad Zubair and Secretary Ministry of Industries and Production ShafgatHussain Naghmi.

Before the AIP draft finalisation and submission to the ECC for approval, the car assemblers/vendors and used car dealers have started spitting venom on each other.

Chairman All Pakistan Motor Dealers Association (APMDA) H.M. Shahzad said that that car makers and vendors had stepped up their campaign against his association to distract policy makers from making a realistic AIP.

He said the assemblers of Suzuki, Toyota and Honda had been in business for the last 20-30 years and were allowed huge concessions to incentivise indigenisation.

`They have been given continuous relaxation in the deletion program by the government until they were successful to completely shelve the deletion program in the garb of Tariff Based System (TBS),` he said.

Shahzad said huge amount of foreign exchange is being spent on import of completely knocked down (CKD) kits as there is practically no import substitu-tion even after 30 years. `Even the vendors are importing parts of their products,` he said.

He said there should have been more localisation especially in one of the leading Japanese cars which is more than 20 years old. In 2013, car assemblers had raised the prices by at least four times.

Meanwhile, Director General Pakistan Automotive Manufacturers Association (Pama) Abdul Waheed Khan and Chairman Pakistan Association of Automotive Parts Accessories Manufacturers (PAAPAM) Usman Malik, in a joint statement, alleged that used car importers were involved in illegal activities as they forge documents to import used cars, evade taxes, sell old junk cars at prices equal to locally produced new cars.

They said the used car dealers also did not pay full import duty as the law allows depreciation allowance of up to 50 per cent, a concession which makes these luxury vehicles affordable for ruling elites and landlords of this country who are usually the buyers


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