The Ministry of Industries held 30th meeting of Auto Industry Development Committee (AIDC) chaired by Abdul Razak Dawood Industries and Production Adviser. The meeting has finalized discussion on the local manufacturing of Electric vehicles and has nominated the EDB (Engineering Development Board) as the key department for formulating the electric vehicle policy. EDB is directed to submit the draft proposal of policy by next month.
The matter is being strictly opposed by the auto sector since they feel that several other government departments including the Ministry of science and Technology as well as environment agencies were also being involved in developing the EV policy. The query about the matter has been expressed by the representatives of PAMA (Pakistan Automotive Manufacturers Association) and PAAPAM (Pakistan Association of Auto Parts and Accessories Manufacturers).
Mr. Dawood has decided that EDP should be the focal department since the Electric Vehicle policy falls under the domain of Ministry of Industries and Production as per the rules of business. That is why he has authorized the EDB to formulate the policy and prepare the first draft within one month. The meeting discussed various tariff and non – tariff proposals. Stakeholders have asked for a time frame of 15 – 20 days for submitting the concrete recommendations about the local manufacture of electric vehicles.
Mr. Raza Abbas Chairman Engineering Development Board advised the auto industry that the time line for submitting proposal should be respected so that the board may be able to finalize the first draft before February end.
The meeting decided that the investment in electric vehicles should be under the ADP 2016-2021 (Auto Development Policy)
The said investment will include investment plans, equipment standardization, localization promotion, long run export of parts & components, generation of employment and positive impacts on national economy.
Mr Dawood has stressed that “Make in Pakistan” policy is priority and each policy developed including the policy for EV manufacturing should support the same. While making the policies it should also be in mind to follow the government’s policy about discouraging imports and create jobs in the country.
EDB chairman has also held a meeting with the representatives of local tractor industry to respond to their concerns about the policy. The stakeholders from the tractor industry expressed that there should be a long term policy and there should be a single point of contact for dealing with various government departments.
PAAPAM representatives and tractor manufactures have informed the Chief of EDB about the extremely price sensitive situation of the farmers and that the increase in price has resulted in a decrease of 40% in sales in July – December 2019. They mentioned that the price increase is mainly due to the dollar – rupee parity and the imposition of taxes and duties in the previous budget.
Tractor Industry demanded mark up reduction on tractor financing
They have also proposed reduction in the mark up on tractor financing for the farmers to a single digit. Also general sales tax on imported parts should be declined to 5% from 17 %. They also demanded that the sales tax refunds should be assured to release on timely basis for improve the cash flows of importers.
On behalf of the government, Mr. Abbas has assured the auto industry about solving the problems. He has requested PAAPAM as well as the tractor manufacturers for suggesting a line of action that can facilitate the long term growth of the sector.