After the launch of new automotive policy, Pakistan is actively persuading the European car manufacturers to enter the local market in order to meet the country’s constant demand for new cars.
The latest development in this regard happened when Finance Minister Ishaq Dar met the representatives of two top European automobile companies — Renault and Peugeot and briefed them on country’s plans to expand vehicular market during his recent visit to France.
Mr. Dar, during meeting with companies representatives, apprised them of the opportunities that Pakistan offered them. He also referred to the country’s latest automotive policy what aims to attract new car makers by offering them incentives like less taxes on import of parts for assembly.
“Pakistan automobiles industry is dominated by Japanese car makers”
Under new automotive policy, one-off duty-free import of plant and machinery for setting up an assembly and manufacturing facility is allowed. It permits the import of 100 vehicles of the same variants in the form of completely built units (CBUs) at 50% of the prevailing duty for test marketing after the groundbreaking of the project.
A major incentive for the new investors is the reduced 10% customs duty on non-localised parts for five years against the prevailing 32.5%. For existing investors, the duty will be slashed by 2.5% to 30% from the new fiscal year 2016-17.
Similarly, localised parts can be imported by the new entrants at 25% duty compared to the current 50% for five years. For existing players, the duty on import of localised parts will be brought down to 45% from the new fiscal year, beginning July.
Ishaq Dar also mentioned that Pakistan’s economy is booming after the law & order situation has improved in last couple of years. The minister indicates microeconomic stability, sustained gross domestic product growth, stable exchange rate and high consumer purchase power.
Renault and Peugeot were also communicated about the country’s increasing demand for new cars which presents a huge opportunity for the new car manufacturers. Dar asked them to join the Pakistan automobiles market to enhance the consumer welfare and boost competition among the new and old players.
The representatives of both leading French automobiles acknowledged Pakistan’s efforts to bring the sustainability in economic growth and showed their keen interest in working together.
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