Lahore: Pakistan’s largest Japanese car maker chief said that government should implement its policies step wise in a bid to promote new technologies in auto sector.
In the world, Hybrid technology is cheaper than Electric Vehicle, however in Pakistan government intends to give all incentives to EV. “Incentives for hybrid cars should also be included in the policy as it is the first step towards electrification of vehicles and globally hybrids are part of EV’s”, said CEO Indus Motor Company Ali Asghar Jamali.
While talking with a group of journalists, Jamali said that for EV vehicles, government is giving concessions up to 25% with almost zero percent duties. “Pakistan may miss the train by only giving incentives to EV technology as this technology will take years, whereas ignoring hybrid technology may have led the country to keep running the vehicles on gasoline or diesel”, he said.
He added that government should give incentives to auto industry for technology upgradation and we should move like the world is moving ahead in this particular sector.
Jamali also lauded government’s transfer tax initiative to counter menace of on money, a suggestion being given by industry for long will be beneficial for industry, consumers and government as well.
Talking about local vendor industry, he said that OEMs have helped the local industry with transfer of technology while developing the local engineering base. IMC alone has done above 45 technical assistance agreements with local vendors.
With expansion of the vendor base, the OEMs have also invested heavily to increase their capacity; however, surge in demand creates room for investors to earn on-money on new models.
It is a market phenomenon and the responsibility to counter it weighs on both OEMs and the government as no single action could result in eliminating this phenomenon completely, he said.
He added that the government has promulgated an ordinance and limit second sale of vehicles within 90 days of invoice and one who does this will be charged a fine based on engine category.
“The apparent reason to introduce this amendment is to discourage own money/premium practice in the market. The step is very encouraging not only to existing players but new entrants also. This policy should be applied to imported vehicles as well.” said Jamali.
He added that industry wide production capacity has now doubled from 275K units to 500K units while production variety is also increasing.
“The premium is an ogre issue being faced by the local auto industry that promotes flow of black money within the economy and capsizes taxable income to non-taxable,” he added.
“IMC remains the only OEM that has done a lot to educate all its stakeholders on this phenomenon. We have also proposed WHT of up to Rs2,00,000 which should work as deterrence for customers who purchase vehicles at premium from non-authorized dealers which the government has adopted and SRO is expected soon,” said Jamali.
He added that the government should also announce incentives for vendors to encourage manufacturing of spare parts locally. This, according to him, would boost localization of the auto industry.