Govt’s New Auto Policy to End Monopoly of Big Automakers

[Morpheus]

Govt’s New Auto Policy to End Monopoly of Big Automakers

Posted 17 hours ago by Waleed Shah

As per the reports, the government is planning to formulate a new auto policy to end the monopoly of certain car companies in the local automotive market.

It also highlighted that the Auto Development Policy (ADP) 2016-21 will expire by 30 June, and that the Ministry of Industries and Production has stated that the new policy will allow for the import of cars.

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The policy provided numerous concessions and benefits to the automakers seeking to enter the Pakistani market. Moreover, owing to the current ADP, numerous carmakers had either entered or made their comebacks to a warm reception by Pakistani consumers.

The report further states that the new policy will revoke the concessions given to entrants and that the rates of the taxes on the import of cars will be reduced. Additional concessions will be considered to encourage the import of cars.

A few days ago, the federal government had directed the Ministry of Industries and Production (MoIP) to begin an investigation of the automotive firms to determine the details of their inability to increase production capacity.

The automakers’ inability to meet the demands of the local market has given rise to the illegal premium culture whereby certain dealerships add an additional amount over a car’s MSRP.

The introduction of the new policy for the auto industry is definitely a logical step forward. However, encouraging imports instead of country-based manufacturing is a questionable move as it goes against Prime Minister Imran Khan’s vision for a self-reliant and stable auto sector of Pakistan.

Govt's New Auto Policy to End Monopoly of Big Automakers

As per the reports, the government is planning to formulate a new auto policy to end the monopoly of certain

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[Baz2020]

Here is the news that you will hear next.

Car mafia removed thousands of cars from the market. Public is protesting against the government...

 

[Morpheus]

New Auto Policy to Support Newcomers and More Affordable Cars

Posted 2 hours ago by Haroon Hayder

Engineering Development Board (EDP) and Ministry of Industries and Production have started working on the new Automotive Industry Development and Export Plan (AIDEP) 2021-26 as the existing Auto Development Policy (ADP) 2016-21) is set to expire in June this year.

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According to reports, the AIDEP 2021-26 will focus on facilitating the manufacturing of affordable cars, which will lead to cost reduction, price stability, and employment generation in the country.

AIDEP 2021-26 is also expected to significantly reduce customs duty, additional customs duty, and federal excise duty for the entire auto sector.
However, in return, the government will negotiate with car manufacturers for a reduction in car prices, increase in localization, and concerted efforts to increase exports.

Note that around 45% of the price of a vehicle that a consumer pays goes to the government in duties and taxes.

It includes customs duty on import of localized parts is 45% while 30% on non-localized parts and a 7% additional customs duty on import of all parts. There is also up to 7.5% federal excise duty on different engine capacities. In addition to this, there is a 17% sales tax on the sale of a car.

An industry source said that the government can significantly reduce car prices by slashing taxes and duties.

For instance, if automakers are to bring the price of a modern hatchback down to Rs. 1 million from Rs. 1.5 million, the government must reduce exorbitant duties and taxes, the source added.

New Auto Policy to Support Newcomers and More Affordable Cars

Engineering Development Board (EDP) and Ministry of Industries and Production have started working on the new Automotive Industry Development and

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