ISLAMABAD: Senators attending a house committee meeting on Friday cautioned that the 7pc export target set for automakers could not be achieved if locally-made vehicles failed to meet international standards.

The Senate Standing Committee on Industries and Production, which met with Aon Abbas in the chair, formed a three-member sub-committee under Saifullah Sarwar Khan Nyazee to analyse the country’s electric vehicle policy.

Officials informed the meeting that after the government had set the export target at 7pc for 2024-25, the companies obtained a stay order from a court, saying they would not be able to meet the target.

Senator Saleem Mandviwalla regretted that cars produced in the country were not of international standards, adding that it is impossible to find suitable export markets for these vehicles.

Senate committee discusses vehicle policy

Senator Nyazee stated that no manufacturer should be allowed to produce cars that do not follow the WP-29 regulations, questioning who would be responsible for the lives lost because of such vehicles.

The committee also discussed the country’s EV policy.

Officials of the Ministry of Industries and Production said the government had introduced the EV policy to combat the climate crisis and diversify the automobile sector.

Under the policy, there is 1pc customs duty on parts of EV vehicles compared to 30pc on traditional vehicles.

Besides, the tariff for EV vehicles is around 5-10pc compared to 25-30pc for traditional vehicles. These steps were taken to attract global EV manufacturers. Mr Mandviwalla stressed the need for building an EV-friendly infrastructure and said that in its absence the EV sector would not sustain itself.

Senator Abbas highlighted the issue of reimbursement by auto manufacturers to customers in case of the delivery of vehicles beyond a delay of 60 days.

He stated that eight car manufacturers, including Honda Atlas Cars, Indus Motor, Pak Suzuki, Hyundai Nishat Motors and Kia Lucky Motors, had paid around Rs5.32 billion in compensation to customers.

Officials informed the committee that the Competition Commission of Pakistan is the relevant forum for checking malpractices by car manufacturers.

Mr Abbas directed that a bifurcation of the amounts paid along with the models of cars and extra days for which the amount had been paid be provided to determine if the compensation justified the delay. The committee recommended that a universal mechanism be devised so that consumers and the departments concerned could conduct real-time checks on car manufacturers.

The committee was informed that 13 automobile companies were currently operating in the country. These companies have installed a production capacity of 500,000 units annually in more than 40 models with over 100 variants. They contribute 4pc to GDP, pay Rs300bn in taxes, and generate over 2m jobs in the country.

The committee also deliberated on the inclusion of cold storage in the industrial sector and the provision of affordable electricity rates.

Officials said the ECC had approved the matter and forwarded it to the cabinet for its approval to declare “cold storage” an industrial sector.

Published in Dawn, August 24th, 2024



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