Government rejects incentives for Pak Suzuki; refuses to cave into Pressure

government reject Pak Suzuki proposal of investment

Pak Suzuki fails to entice government with $660 million Investment in Pakistan as the government would not to change the Auto Policy 2016.

The Board of Investment (BOI) has announced that it would not respond to any pressure from the existing auto manufacturers in Pakistan and would not any amendments in the auto policy.

BOI spokesman Shah Jahan Shah, while talking to journalists on Tuesday asserted that changing the policy under the someone’s influence would have a negative impact on the country’s reputation and name globally. He said:

“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.”

The statement came in response to Pak Suzuki’s efforts to gain the same advantages as new players would get under the Auto Policy 2016. In February 2017, Suzuki Motor Corporation (SMC) of Japan wrote a letter to Finance Minister Ishaq Dar that read:

“If the same two years (of) incentives and benefits are given, then Suzuki is committed to investment in setting up a state-of-the-art new greenfield plant and it would introduce new and advanced models.”

The Automotive Development Policy (ADP) 2016-21 offers various incentives for new entrants to manufacture their vehicles in Pakistan. Whereas, two-year incentives have been allowed for the companies whose production plants were closed down before June 2013.

Shah said that the government faced a lot of pressure while framing the auto policy. He further explained: “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.”

Many major international brands are now making their way to Pakistani industry. Shah reveals that  Renault, Ghandhara Nissan, Nishat Group, Kia, and Hyundai had contacted and applied for incentives.

Dewan Motors and Faw China have also applied for the incentives, but their case is still under consideration owing to a few gray areas. Dewan Motors didn’t fall into categories that can receive incentives as it imported kits and sold them in the market after June 2013.

BOI has also rejected Audi’s investment plan, Shah said:

“Audi representatives visited Pakistan and wanted to invest in MKD (medium knocked down) model with only vehicle assembly in Pakistan. It is against the auto policy.”

He further added; “We want Audi to further strengthen the vendor base and the dealer network, besides creating employment.”
Comments
  1. How ironic this is and how ignorant these big 3 players are they are doing everything they can to stop others into automobile industry in Pakistan. Honda, Suzuki, Toyota good bye we’ll never buy your old designs anymore. we need better vehicles with better safety features.

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