CPEC facilitates the import of automobile parts from China

0
35
CPEC

ISLAMABAD: CPEC facilitates import of automobile parts, kits from China at reasonable prices, WealthPK reported on Wednesday.
Appropriate engineering policy steps taken by the previous government have been stimulating Pakistan’s automobile industry over the last several years.
Thanks to years of policy implementation, the industry welcomed new car models, new auto players, and new approaches for doing the automobile business.
Automobile industry is one of the growing industries in Pakistan, increasing by 171% between the years 2014 and 2018. The sector employs a workforce of about 3.5 million people and accounts for 3% of the GDP. Its contribution to the national exchequer is approximately Rs50 billion (US$310 million).
On 19 March 2016, Pakistan approved “Auto Policy 2016-21” which offers tax incentives to new automakers to establish manufacturing plants. In response, various car manufacturers (Renault, Nissan, Kia, Ssang Yong, Hyundai, and Volkswagen) have shown their interest in entering the market.
MG JW Automobile Pakistan has signed a Memorandum of Understanding (MoU) with Morris Garages (MG) Motor UK Limited to bring electric vehicles to Pakistan. NLC signed an agreement with Mercedes Benz for manufacturing Mercedes Actros trucks in Pakistan. Jolla Electric launched the production of electric motorcycles on 8th July 2021, WealthPK reported.
The country’s policymakers consider the success of previous policy as a benchmark for taking a few steps forward. In July 2021, the Government of Pakistan announced a five-year policy [2021-26] to increase the production capacity of automobiles in Pakistan.
Successive measures in new policy include reduction in the prices of vehicles, generation of 3,75,000 jobs, massive decrease in the import duties of EVs, and decrease in import duties on electric vehicles from 25% to 10% for one year.
In actuality, the policy encourages localization and value addition of parts used in car manufacturing and promotes exports.
The policy also portrayed that if a car manufacturer delays the car delivery for over two months (60 days), the company will pay +3% KIBOR (Karachi Interbank Offered Rate) to the customer.
Pakistan is also planning to increase the annual production of automobiles from 250,000 units to about 600,000-800,000 units during the next five years, as stated by Pakistan’s Ambassador to China Moin ul Haque while addressing a seminar in China on October 20, 2021.
Haque also said numerous Chinese companies were already in the automobile manufacturing sector of Pakistan, while approximately 10 new companies had also shown interest in developing joint ventures with the Pakistani local partners in the private sector.
The China-Pakistan Economic Corridor (CPEC) has provided a great opportunity for importing automobile parts and kits from China at reasonable prices. Considering the CPEC initiatives, it is anticipated that the demand will increase manifolds. – INP