Licenses of 3 Auto Companies Suspended in Pakistan

Engineering Development Board (EDB) which comes under the Ministry of Industries & Production (MoIP), has reportedly suspended the manufacturing licenses of three major automobile companies.

These include the biggest names in the local automobile landscape of Pakistan namely, Pak Suzuki Motor Company, Honda Atlas Cars Pakistan, and Indus Motor Company Limited (Toyota). As per sources, these companies have reportedly violated a number of conditions of the Auto Policy due to which their licenses have been suspended.

The manufacturers are not fulfilling localization conditions as they have not increased local production of vehicles under the auto policy, says EDB. According to the Auto Policy, automakers are bound to produce automobiles as well as spare parts locally. Moreover, they are bound to export 2% of vehicles in 2023, 4% in 2024, 7% in 2025, and 10% by 2026.

Not only these companies are not producing spare parts, but they have also not fulfilled the 2% export requirement. Sources said that there may be some relaxation if car manufacturers provide written assurances of auto policy enforcement.

However, a senior EDB official on the condition of anonymity said that the EDB cannot suspend the current licenses for long. Companies have already applied for the renewal of their licenses and the process will be completed in two to three days upon provision of written assurances.

Source: Profit

New Update on 27th October

The Ministry of Industries and Production has contradicted reports of the cancellation of import licenses of three leading automobile manufacturers – Suzuki, Toyota, and Honda. Officials have now clarified that the actual issue was just the revalidation of the import quota of automobile manufacturers and not the cancellation of licenses.

As per the media reports, the officials said that the government desired the implementation of the Auto Policy in letter and spirit which required automobile manufacturers to do localization and export a certain portion of products.

The Ministry of Industries and Production has been directed by the Special Investment Facilitation Council (SIFC) to review, extend, and revalidate the import quota of automobile manufacturers for up to 90 days. The ministry has also been directed to cooperate with the manufacturers to ensure adherence to the localization and export obligations.

Source: Pakistan Observer