The government gives a thumb down to Suzuki and Audi investment plans
Since the introduction of Auto Policy 2016 in Pakistan, the existing auto manufacturer’s mafia has constantly been making some serious efforts, trying hard to demoralise it for their individual gains. Nevertheless, the Board of Investments (BOI) has stood its ground and hasn’t backed down an inch.
Earlier this year, Suzuki made an official offer to invest $460 million in Pakistan only if the modification of Auto Policy 2016 was brought under consideration, so they would be able to enjoy the incentives that were exclusively held in reserve for the fresh competitors joining the automobile industry.
This Tuesday, BOI spokesman Shah Jahan Shah clearly stated that the government is in no mood of modifying the auto policy, as it is supposed to bring forward new vendors and improved automobiles into the market.
Won’t back down in any kind of pressure
Shah also brought to light that authorities have persistently been pressurised but haven’t given into it as it would severely distress the status and international standing of the country.
“We faced a lot of pressure while framing the auto policy. We promise to give some incentives to attract new entrants; however, no incentives are for the old players who have been working for more than 20 years in the country.”
In proportion to the new automobile policy, Greenfield and Brownfield investments are intended for the pre-existing auto manufacturing companies, with no inducements that the new participants can avail as part of introducing their operations in Pakistan. In contrast, new companies like Renault, Ghandhara Nissan, Nishat Group, Kia and Hyundai are contacting the government and applying for incentives.
The government has showed strictness and rigidity in regards to companies that are applying for incentives and falling under a grey area. Dewan Motors and Faw China, currently, got enlisted in this category due to some previous dealings with the government.
Shah added that the incentive was solely proposed for the new companies as they face a lot more risk setting up their manufacturing company in Pakistan. He further added:
“Pakistan has already been criticized for an inconsistent policy, therefore, the government is not in a mood to amend the policy under any pressure to accommodate some auto players.”
BOI declines Audi’s investment plan
Earlier in November of 2016, Audi was interested in starting a manufacturing plant in Pakistan.
Although, Audi’s efforts have fallen flat on their face as BOI declined their existing investment plan. Moreover, they have been informed to submit a fresh proposal instead.
“Audi representatives visited Pakistan and wanted to invest in MKD (medium knocked down) model with only vehicle assembly in Pakistan. However, that proposal did not meet the criteria for incentives as laid down in the auto policy for new entrants.”