High price of local auto makers: panel to assess likely impact of opening import of old cars

The ministry of industries has constituted a panel to assess the likely impact of open import of used vehicles on the high price of locally manufactured vehicles, official sources told Business Recorder.
According to a notification issued by the Ministry of Industries, in pursuance of the meeting on tariff rationalisation on July 6, 2011, headed by the Deputy Chairman Planning Commission, a subcommittee led by the ministry of industries was constituted to recommend comprehensive proposals for lowering tariffs in auto sector.
The subcommittee, led by Additional Secretary Ministry of Industries, comprising CEO, EDB, GM (tariff) EDB, GM (budget) EDB, GM (policy), a representative from the FBR, not below the rank of chief, a representative from ministry of commerce not below BS-20, a representative from NTC not below BS-20, a representative from PAMA and a representative from PAAPAM.
The subcommittee on auto sector, led by Additional Secretary Industries, has finalised its Terms of Reference (ToRs) which are as follows: (i) Present tax and tariff environment for the auto industry, price structure and the protection available to the auto industry vis-à-vis other regional countries; (ii) likely impact of reduction in duties and introducing uniform lower tariff rates for all (including trader importers) on consumers as well as on the profitability of OEMs; (iii) impact of increase in age limit of used vehicles under Trade Policy; (iv) likely impact of commercial import of used vehicles; (v) current status of indigenization and present installed capacities and supply situation in auto sector; and (vi) present technical barriers to trade and the reasons for low level of new investment in auto sector, particularly four wheelers.
Secretary Industries Aziz Ahmad Bilour at a recent meeting with the Original Equipment Manufacturers (OEMs) in Karachi warned that if the local assemblers failed to rationalise prices, the government will have no other option but to withdraw all the incentives.
The ECC, in one of its recent meetings expressed concern over the monitoring role of the EDB, given that it had concerned industrialists on its Board, who could effectively control tariff determination policies of the government. After detailed discussion on the summary of commerce ministry and the presentation made by the Deputy Chairman Planning Commission, the following general proposals were agreed:
(a) Non-tariff measurers including import licensing will not be used to control imports and exports; (b) specific duties will not be used; (c) import tariffs would be low and uniform; (d) the government will aim to further bring all tariffs down; (e) tariff on individual products would be the same for all importers and trader importers; and (f) openness will be the defining principle and works would be transparent. The ECC took serious notice of limited progress by the four subcommittees and directed their heads to speed up their work.