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Government rejects Audi venture plan in Pakistan

Faryal Nadeem Mar 29, 2017
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The Board of Investment has recently refused and rejected the Audi investment plan in Pakistan. This is due to the pressure because of the auto manufacturers who are already present in Pakistan. This means that no amendments would be made in the Auto policy 2016 which is designed mainly to improve the quality of the vehicle, bring new players and ensure to provide swift delivery.

The spokesperson of BOI Shah Jahan told the media that government is not willing to revise the auto policy. Revision in the auto policy will bring the bad name of the country globally.

He also added that “Pakistan is criticized for having inconsistent policy and government cannot bear such condition by amending the policy under any pressure.”

However, Pak Suzuki Motor Company also reviewed its investment plan, which is worth $460 million. He also pointed out that new auto brands like Nissan, Nishat Group, Hyundai, Kia, and Renault have contacted and have applied for incentives. Faw China and Dewan Motors also have sought the incentives, but their related cases are still under consideration.

Dewan Motors also have imported kits and was available in the market for selling purposes after June 2013. However, Faw was successful in its plan and initiated the project and also have expanded the base without applying for any incentives. The company does not fulfill any policy concessions.

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The industrial units of the automobile company whose production plants are closed before June 2013 are allowed to have incentives for only two years. While the Ministry of Industries as well as the Production powers to determine that which incentives will be offered to the automobile brands in the market.

Pak Suzuki Motors is operating in Pakistan for many years and have achieved a Greenfield category tag because of its reliability and high demand, but still, the market rate does not allow it to incentives. The auto policy is designed for brownfield and Greenfield investments with no incentives just because of the existing industry players. The sector of the automobile has grown 25% during the last two years. He mentioned that “we have faced an enormous pressure while finalizing the auto policy.”

He also clearly stated the policy incentives for the new automobile brands who have to face greater risks while launching the products in Pakistan. He promised to propose some incentive to the new brands while there would be no incentives for the old automobile companies who are contributing their services from the last 20 years.

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Similarly, BOI has rejected Audi investment plan and suggested to offer a new, fresh and innovative program. The Audi representatives have visited Pakistan and planned to invest money in the medium knocked down model, which allows the vehicles to assemble in Pakistan. While the proposal is against the auto policy.

We want Audi to strengthen the vendor and the dealer network instead of creating employment opportunities. The primary rationale behind the policy is to discourage the car booking against delivery and full payment from six to one year. The price of the car is also higher in the region while the fuel consumption and emission standards are absent. Shah said that “Auto companies needs to introduce new models in Pakistan at a reasonable cost because the policy reflects quality improvement, welfare, and the enhancement of the safety standards. It will help to promote fair competition for the recent and the new players in market”.

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