Senate panel asks automobile companies to brief on quality standards, price ranges, tax matters

ISLAMABAD: Senate Standing Committee on Industry and Production has shown displeasure over the briefing of Advisor to Prime Minister on Commerce, Textile, industry and Board of Investment Abdul Razak Dawood and has directed three automobile companies to furnish details in the next meeting on quality standards adopted by the companies in relation to regional practices, the price ranges with plausible reasons, the percentage of parts manufactured locally and those imported from other countries as well as the export potential of cars and the tax paid by the companies measured against their income and profits.

The meeting chaired by Senator Ahmed Khan on Thursday discussed the total number of vehicles sold, the amount of tax paid, details of spare parts produced locally and imported from abroad and fulfilment of corporate social responsibility role by Toyota, Honda and Suzuki motors.

Abdul Razak Dawood while briefing to committee members told that the incumbent Pakistan Tehreek-e-Insaf (PTI) government would continue the previous government’s auto-policy and will not make any amendments.

“Pakistan is a big country but we are far behind in car production from other countries,” he informed the committee. He further added that the incumbent government would increase the production within the automobile industry in the coming years.

He apprised the committee that around 55 to 70 per cent spare parts are produced domestically, apart from these, the production of tractor and motorcycle in the domestic market is 96 per cent and 85 per cent, respectively.

Meanwhile, Engineering Development Board (EDB) officials told the committee that total investment in the auto sector has been recorded at $1.16 billion so far, while negotiations with other companies are in progress to increase total investment.

Representatives from Suzuki informed the committee that Suzuki while establishing a new plant will make a $450 million investment within the Pakistani auto industry.

Committee Chairman Senator Ahmed Khan called upon the ministry and automobile companies to make use of the new technologies that are being used worldwide and also make the automobile industry environment-friendly to reduce the adverse impacts resulting in severe climatic change.

Abdul Razak Dawood expressed his concern over not being able to satisfy the Committee and suggested calling the companies before the Committee as well as visiting the manufacturing plants of the automobile industry.

Documents stated that Pak Suzuki Company Ltd in the last two years produced 213,280 cars/LCVs and 40,202 motorcycles and it paid Rs1793 million in 2017 and Rs1097 million tax for the first three quarters of 2018.

Similarly, the production of Indus Motor Company was recorded at 122,785 units in 2016-17 and 2017-18 and paid Rs13.3 billion tax in the last two years.

Besides this, Atlas Honda Limited has produced 90,657 cars/LCVs and 2,110,451 motorcycles whereas it has paid Rs2.9 billion in taxes.

While giving a reply on a public petition regarding the price increase, the ministry officials stated that prices of vehicles increased due to the devaluation of Pakistani rupee against the US dollar. The car manufacturers operate on three to four days inventory and impact of rupee-dollar parity is transferred immediately, they stated in the documents.