Minister calls for end to ‘clean money’ threat to cars


Local auto assemblers have refunded Rs 4 billion to customers due to late delivery of vehicles under the Automotive Industry Development and Export Plan 2021-26.

Late delivery of cars is a common practice among local car assemblers in Pakistan.

The Pakistan Muslim League-Nawaz (PML-N) government in 2016 introduced a policy aimed at breaking car assembler cartels by offering incentives to new entrants.

This resulted in the establishment of several new car manufacturing plants all over Pakistan, but the practice of late delivery of cars by all manufacturers continues to this day.

Meanwhile, the Pakistani government Tehreek-e-Insaf (PTI) has also offered tax incentives to existing car manufacturers under the Automotive Industry Development and Export Plan 2021-26 (AIDEP 2021-26) .

These incentives were intended to reduce local car prices, but the companies not only took advantage of the tax offer, but also repeatedly increased car rates to inflate profits and increase customer revenue.

The PTI government proposed to set up a price regulation council to set car prices, but the idea failed to materialize.

During a meeting held on Friday, the CEO of the Engineering Development Board (EDB) informed the Federal Minister of Industry and Production, Makhdoom Syed Murtaza Mahmud, that eight licenses had been issued to manufacturers of original equipment (OEM) electric vehicles for the production of two and three wheelers. In Pakistan.

He noted that payments amounting to Rs 4 billion had been refunded to consumers for late delivery of vehicles under the consumer protection clause of AIDEP 2021-26. He said that despite the outbreak of the pandemic, 215,776 units of cars including jeeps, SUVs and LCVs were locally manufactured last year and a target of 300,000 locally produced cars would be reached this year.

Mahmud held a briefing on the auto industry on Friday.

The CEO of EDB provided an overview of Pakistan’s automotive sector vis-à-vis two broad-spectrum policies, namely the Automotive Development Policy 2016-2021 (ADP 2016-21) and the recently launched policy , namely the Automotive Industry Development and Export Policy (AIDEP). 2021-2026.

The Minister was informed that ADP 2016-21 incentivizes seven new automotive players to enter the market while AIDEP 2021-26 focuses on adding value in automotive manufacturing by 30%, the update biannual report of SRO 693 and automotive export targets. parts as well as CBUs.

In addition, he added that it aims to promote the adoption of safety rules through legislation and to promote electric vehicles and new technologies in the automotive industry. The minister noted that the new policy will accelerate the growth and development of the auto industry as well as the quality and indigenization of the industry.

He also ordered the EDB to come up with a plan to curb the clean money problem so that consumers can get vehicles in a timely manner at justified prices.

Published in The Express Tribune, April 23rd2022.

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