ISLAMABAD: Senators at a house committee meeting on Friday raised concerns about meeting the 7% export target set for the automotive industry, citing the potential failure of locally-made vehicles to meet international standards.
The Senate Standing Committee on Industries and Production, chaired by Aon Abbas, established a three-member sub-committee led by Saifullah Sarwar Khan Nyazee to review the country’s electric vehicle (EV) policy.
Officials reported that following the government’s export target of 7% for 2024-25, companies obtained a court stay order, claiming they could not meet the target. Senator Saleem Mandviwalla expressed regret over the subpar quality of domestic vehicles, noting the difficulty in finding suitable export markets.
Senator Nyazee emphasized that manufacturers should adhere to WP-29 regulations, questioning accountability for any loss of life resulting from non-compliant vehicles. The committee also reviewed the EV policy aimed at addressing climate change and diversifying the automobile sector.
Under the policy, customs duties on EV parts are set at 1%, compared to 30% for traditional vehicles, and tariffs for EVs are between 5-10% versus 25-30% for conventional vehicles. Mandviwalla highlighted the need for EV-friendly infrastructure to ensure the sector’s sustainability.
Senator Abbas raised the issue of compensation for delays in vehicle delivery, revealing that eight manufacturers, including Honda Atlas Cars and Pak Suzuki, had paid around Rs5.32 billion in compensation. The committee directed that detailed breakdowns of compensation payments be provided to assess whether they justified the delays and recommended a universal mechanism for real-time checks on car manufacturers.
The committee learned that 13 automobile companies operate in Pakistan with an annual production capacity of 500,000 units across more than 40 models and 100 variants, contributing 4% to GDP, paying Rs300 billion in taxes, and generating over 2 million jobs.
Additionally, the committee discussed including cold storage in the industrial sector and affordable electricity rates. Officials indicated that the Economic Coordination Committee (ECC) had approved the matter and forwarded it to the cabinet for approval to classify “cold storage” as an industrial sector.
