Pakistan Auto Policy 2016-21 attracts world's top Automobile makers
ISLAMABAD (APP): Government of Pakistan is going to support both existing foreign car assemblers and new German, French and South Korean auto assemblers in addition to the Pakistan Auto Policy 2016-21 which it had announced last year.
According to the report by Khaleej Times, the incentives offered in the policy included several tariff and tax concessions while some of these were meant to provide additional relief to three current foreign assemblers in the country, including Toyota, Suzuki and Honda.
The policy offered several more tax concessions to attract new foreign automakers as demand for new models and luxury models is constantly going up. This comes on the back of an increase in personal incomes, especially for those engaged in big business, industry and large farmers.
The government has indicated that discussions are ongoing with Renault of France, Volkswagen of Germany, Faw of China, Kia of South Korea and Chinese auto assemblers and manufacturers.
There has been a big spurt in demand for cars as a result of bank interest rates dipping to a record low of 5.75 per cent – the cheapest in the last 43 years.
Auto financing by commercial banks rose 32 per cent to Rs 30.7 billion in financial year 2015-16 as compared to 2014-15 and its share in consumer financing grew as well, State Bank of Pakistan, the central bank, reported last week.
Ghulam Murtaza Khan Jatoi, Minister for Industries and Production, assured the auto sector that the government would support Pakistan-based auto assemblers and auto part manufacturers to increase their exports and help them capture international markets.
Jatoi said this while inaugurating the three-day annual Pakistan Auto Show at Karachi last week. The show was arranged by 2,000-member Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam).
Paapam members are already exporting auto parts worth several billion rupees to car assemblers in Germany, France and China, besides catering to the Pakistan-based foreign car assemblers such as Toyota, Suzuki and Honda.
A good deal of their parts go to foreign and Pakistani assemblers of cars, motor cycles, light commercial vehicles and tractors. The demand for these products is growing rapidly, with an increase in personal incomes and bigger demand from the farm, commercial and industrial sectors.
The minister said that as a result of the Pakistan auto policy announced in 2016, many international automotive companies have decided to set up assembly plants in Pakistan.