Pakistan Economy Watch urges government to abolish protections for smashing powerful lobby of auto industry

Islamabad, July 30, 2012 (PPI-OT): 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 lobby of auto industry which was so powerful that even government appeared unable to make 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 need to rationalise 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.

For more information, contact:
Dr. Murtaza Mughal
President
Pakistan Economy Watch
402, 4th Floor, Gulistan Khan House, Fazal-e-Haq Road,
82-East, Blue Area, Islamabad
Tel: +9251 251 0375
Fax: +9251 280 2449
Cell: +92321 515 7671
Email: president@pakistaneconomywatch.com
Web: www.pakistaneconomywatch.com