Import Quotas for New Auto Companies Opened

Asim Ayaz, General Manager Policy at Pakistan’s Engineering Development Board (EDB), announced on Saturday that quotas for 7 new auto companies had been opened. This is because the agreement with these companies has legal precedence over Statutory Regulatory Orders (SROs), which are the laws governing them.

However, the EDB official said that quotas will also be opened for established auto companies soon but it will only be till December, and OEMs (car companies) and parts manufacturers will have to sit down and have to chalk out a concrete plan. Ayaz was speaking at a symposium on ‘The Future Drive: innovations, exports, trends, and the way forward for auto parts manufacturers’, which was held on the second day of the Pakistan Auto Show on Saturday at the Karachi Expo Center.

The government did not renew manufacturing certificates for car companies on their expiry because they failed to achieve the export target, which they mutually agreed with the government in 2021. Ayaz said that the government reluctantly took the decision to not renew licenses as “we did not see a serious response from OEM”. He went on to add:

“The government is even now open to incentivizing exports.”

Meanwhile, explaining the reason behind the new entrants getting the green signal, he said the government entered into an investment agreement in 2020, and the SRO came in 2021. The question was if the law was superior then the agreement, and the ‘comments’ (by legal experts) suggested the investment agreement was superior and therefore, they should honor it.

He added that the period ended in June for the sector to achieve and show its export target of 2% (of their total imports). However, the government waited another three months but still, the companies did not provide a concrete plan and hence, the government reluctantly took the decision to stop their shipments.

“Government doesn’t think stopping shipments benefits anyone,” Asim said, adding that less than three years are left for the new entrants too. “After that, they will also have to localize as well.”

Source: Business Recorder