KARACHI: Auto industry pins hope with new auto policy due in 2021 to reduce taxes resulting in lower car prices and relief to customers.

“Stakeholders have been assured by MoI that consultation on new policy will begin shortly as the government is committed to finalize the policy in March 2021,” said CEO IMC Ali Asghar Jamali.

“Government is diligently working to uplift the economy and has a realization that the auto sector can be the biggest contributor to it. We are the largest manufacturing sector, highest tax payer and employing 3 million people directly and indirectly,” he added.

It is pertinent to mention that last auto policy, expiring next year, has helped attract new players and huge investment in the auto sector.

“We have been advocating the significance of predictable, long term and transparent policy and we have all witnessed the impact of AIDP 16-21,” he reasoned.

He emphasized that industry has suggested that much trumpeted Electric Vehicle Policy should focus Make in Pakistan as very few parts need concession while rest of the vehicle parts are already being made in Pakistan.

He informed that with one vehicle manufactured in the country the industry creates at least 6 jobs at different levels from manufacturing to logistics, after sales and dealership as well as secondary market.

It is pertinent to mention that the auto sector is the biggest taxed sector in Pakistan with taxes comprising 40 percent of vehicle prices on an average. This has made the cars unaffordable for a large section of society especially with increasing inflation and depreciating rupee.

“Being the largest manufacturing industry, the whole auto sector plunged into a deep crisis during the nationwide lockdown by dint of Covid-19,” he pointed out.

He said that all auto manufacturers incurred huge losses and from April to June this year almost not a single vehicle was produced by all three OEMs.

“However, not a single employee was laid off and we even provided interest free loans to our dealers and vendors to be committed to our core value of promoting the local engineering base in Pakistan,” he added.

He added that the momentum started picking up since July and due to overwhelming demand, the company went for double-shift production from September.

Double shifts will help meet the demand and lead time will be reduced. IMC has been striving to meet the expectations of its customers and one of them is the earliest delivery to them. We are happy that double-shift production will fulfill our commitment to them and the menace of on-money will also vanish from the market, he urged the customers to be patient and wait for deliveries instead of paying premiums.

He said that the industry has advised the Government to impose a transfer tax on new vehicles if sold within six months of delivery; this will also discourage the On-Money business.

He added that despite such a crisis the company did not compromise on its quality production and its commitment to enhance the engineering base of Pakistan.

“The company has around 1 percent contribution to the national exchequer through trading parts (by procuring local parts worth over Rs200 million every working day) while it employs over 3,000 people to cater to second highest market share by dint of 75,000 units of annual production capacity,” said Jamali.

“And this all is being done in spite of various challenges to the industry including rupee devaluation, imposition of Federal Excise Duty, and Additional Custom Duty,” said Jamali.

He said that we will keep advocating ‘Make in Pakistan’ to help the government in achieving macroeconomic goals of employment generation, GDP increase and boost exports.

Copyright Business Recorder, 2020

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