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Automotive Monitor Worldwide
July 14, 2017 Friday
537 words
Four auto companies allowed to set up assembly plants

The four companies which have been granted permission are likely to enter into separate agreements with the Ministry of Industries and Production by July 17 as to ensure compliance conditions of the Automotive Development Policy 2016-21, relevant SROs and various timelines for completion of the projects for availing incentives under this policy.

These companies will bring investment of around $3 billion for setting up new assembly/manufacturing plants which will not only help in breaking the existing cartel of three Japanese car assemblers, bringing down prices, good quality but also help boost in jobs opportunities and overall industrial sector, a senior official in the Board of Investment (BoI) told this scribe.

Since, the new auto development policy 2016-21 has been operational; various auto players had approached the government for having permission to set up their plants.

Nine companies had seriously initiated their process of getting permission, of which four have been granted Greenfield investment status which include Hyundai Nishat Motors (pvt) limited, Lahore; Kia Luncky Motors Pakistan Ltd. Karachi; Regal Automobiles Industries Ltd. Karachi and United Motors (pvt) Ltd. Lahore.

The official further said the remaining five companies are also under process and the two of them will be granted permission in a week time as their documents and official clearances have been approved by the government.

The remaining three are also under process but their clearances and granting of permission will take a little more time. It is worth mentioning that the existing three Japanese car assemblers i.e. Toyota, Honda and Suzuki are sharing around 0.3 million car market of the country and at the same time blaming low volume as major obstacle in indigenization of critical car parts production and efforts to give price relief to consumers, while in reality buyers despite paying full amount and premiums have to wait for three to six months for their cars.

This phenomenon forced the government to encourage new entrants in the automobile sector as to create competition in favour of the consumers. It was the main reason that the influx of imported used cars have been there while giving little importance to the local assembled cars.

Once the new companies enter into market, it will create a healthy competition and will definitely bring down the prices and improve the quality and innovation and also increase car market to more than half a million units.

Secretary Ministry of Industries and Production said that companies awarded with Greenfield investment would be required to separately enter into an agreements with Ministry of Industries and Production to ensure compliance conditions of the Automotive Development Policy 2016-21, relevant SROs and various timelines for completion of the projects for availing incentives under this policy.

He added that the agreement would be available for signing of all concerned by July 17. The engineering development board (EDB) will issue manufacturing certificate and list of importable components to new investors after verifying that the manufacturing facilities established by the firm are adequate to produce roadworthy vehicles. 2017 Global Data Point.
July 15, 2017
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