ISLAMABAD, Jul 7 (APP): Federal Minister for Industries and Production, Makhdum Khusro Bakhtyar on Wednesday said the government has taken measures to promote automobile industry by boosting its production up to 0.5 million units by 2025.
Addressing a press conference flanked with Federal Minister for Information and Broadcasting, Fawad Chaudhry, he said production would be increased to 0.3 million during the current fiscal year and to 0.5 million by 2025.
Terming the automobile as a potential job creation sector, the minister said that each car produced in the country created employment opportunity for at least five people.
He said, incentives have been provided for localization of affordable small cars in (Meri Ghari Scheme), to make small cars financially affordable for the middle class.
To make the buying of cars affordable for middle class families, the minister said the government through budghet 2021-22 had removed Federal Excise Duty (FED) and Additional Customs Duty (ACD) on locally manufactured cars up to 1000cc.
“This government’s intervention will significantly reduce the prices of all cars, the manufacturer have promised to pass on the impact of reduced tax regime to customers immediately,” he added.
Khusro said prices of cars were expected to be reduced by Rs 104,458 – Rs 142,388 approximately for cars below 850 cc, Rs 112,118- Rs 186,375 for cars from 1001-1500 cc, Rs 169,958 for 1800 cc category, Rs 229,458 for cars of 2000 cc.
He said the government also reduced sales tax on locally manufactured cars while it reduced duties and taxes on import of small car (CBUs) to bridge the demand supply gap that would also result in price reduction.
Khusro said automotive sector was one of the major industrial sector of the country, having potential to drive the entire economy of the country, saying it’s share in Large Scale Manufacturing (LSM) was around 7.81 per cent.
He said the government intended to promote localization of auto parts in the country, the purpose is to create employment, promote downstream industry and save foreign exchange.
“The condition of 30 per cent value addition has been introduced on imported raw materials and components to be used for manufacturing of vehicles in the country, to ensure rapid localization, government shall update the localized manufacturing of auto parts every six months,” he added.
The minister said the government has introduced measures to reduce the issue of “On Money”, adding that the government would charge from Rs. 50,000 to Rs. 200,000 tax where the first registration is not in the name of the person who booked the vehicle while it would impose compulsory payment of KIBOR+3 per cent mark up by manufacturers on delivery beyond 60 days.
In addition, maximum upfront payment on booking would not exceed 20 per cent of the invoice value at the time of booking.
He said to improve and ensure road safety, international safety measures like brakes, steering, tyres, lightening, safety belts, airbags and collision would be met.
He further said 17 such shortlisted regulations would be implemented in phased manner over a period of three years.
Khusro said the exports targets for the manufacturers would be up to 10 per cent of the import value by the end of five years of this proposed policy.
He said Higher number of EVs in the local market would encourage auto companies to invest in related infrastructure in Pakistan to facilitate EVs.