The latest Auto Development Policy (ADP) has paved the way for several new companies to enter the Pakistani auto market. Companies like Regal Motors, KIA, Hyundai, Proton, and Changan entered the market following the ADP.
During the 34th meeting of the Auto Industry Development Committee (AIDC), the Pakistan Automotive Manufacturer Association (PAMA) expressed concerns that the federal government favours one specific car manufacturer, a fresh entrant in Pakistan.
A PAMA official said, “There is a new entrant in the market, selling and booking vehicles without establishing a production plant in the country. Under ADP 2016-2021, the new entrants can import only 100 complete built-up (CBU) units at 50% duty for marketing and production purposes. Meanwhile, the companies have to pay complete duty on the 101st vehicle.”
According to media reports, PAMA members have asked the Engineering Development Board (EDB) in a letter that “when will the benefits for new entrants will end?”
PAMA further said in the letter: “Under the ADP, the new entrants are allowed a concession period of 3 to 5 years; depending on each unique case, starting from the production date.”
PAMA finds it problematic that the new entrants are reported, submitting revised business plans; even those who have already started commercial production.
These revised plans may circumvent the incentive period that could be more than three or five years.
It is pertinent to note that the statement comes at a time when businessman Javed Afridi, who has brought MG to Pakistan, alleges that “As new entrants bring in exciting new models at far lower prices, instead of competition, we expect maligning campaigns and baseless rumours. While we know that competition is an unfamiliar phenomenon in Pakistan’s automobile industry, we invite everyone to join in a fair competition to serve Pakistani consumers with a bigger and better variety of vehicles at lower prices.”
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