Auto industry protections to be abolished: PEW


While expressing deep concerns over rising prices of locally made vehicles, the Pakistan Economy Watch (PEW) has urged the government to abolish protections for smashing powerful lobby of auto industry in a bid to reduce prices of vehicles.
In a statement issued here on Monday, President Pakistan Economy Watch Dr.Murtaza Mughal expressed dismay over government’s slow move to abolish protections extended to the auto industry in order to bring down the prices of locally made vehicles.
He said the abolishment of protections extended to the auto industry was essential for smashing the lobby of auto industry which was so powerful that even the government appeared unable to make a policy against their vested interests.
“Government should gradually reduce protection given to the auto industry by reducing the tariff on Completely Built Units (CBU) to ensure availability of imported substitutes for consumers at affordable prices,” he said, adding that there was also a need to rationalize tariffs applicable on Completely Knocked Down (CKD) units.
He said the Engineering Development Board (EDB) has proposed a reduction in the tariff on cars up to 1,000cc engine size, from the current 55 per cent to 40 per cent for the next five years; from 60 per cent, to 50 per cent for 1,001cc to 1,500cc cars; and a 5 per cent increase in the tariff of 1,501cc to 2,000cc cars from the current 75 per cent.
He said the EDB has also proposed withdrawal of the 50 per cent regulatory duty on cars exceeding 1,800cc; which it believes is an impediment to the growth of this segment. NNI