[DETAILS] New Auto Development Policy (2022-2026) likely to reduce the prices of small cars

The new ADP (2022-2026) will take over the current ADP from the 1st of July 2021.

The government is taking steps to formulate new Auto Development Policy.

Experts suggest that 2022 is going to be a striking year for the Pakistani automotive industry. They explained:

One of the many reasons for this notable change is that the current Auto Development Policy (ADP) of Pakistan (2016-2021) expires in June 2021. Hence, the Government of Pakistan has started formulating a new auto policy for the next five years, i.e., from 2022 to 2026. 

The old Auto Development Policy.

The Government plans to draft of the new Automotive Development Policy (ADP) by March 2021. According to reports, the new policy might reduce the prices of small cars. Sources state that the government is also taking steps to promote the exports of vehicles.

What did the current ADP do for Pakistani auto industry?

What does the Current ADP (2016-2021) state?

The first Auto Development Policy (ADP) of Pakistan was introduced in 2016. The policy introduced the following advantages for the Pakistani auto industry:

  • Gave many international auto manufacturers the Greenfield status
  • Established their production capacity in Pakistan
  • Facilitated the entering of several world-class auto manufacturing companies in the local market, including Hyundai-Nishat, United Motors, Kia Motors, and DFSK

The last date of the current ADP (2016-2021) is the 30th of June 2021.

Speculations about the new Auto Development Policy.

What MIGHT the New ADP (2022-2026) contain?

The new ADP (2022-2026) will take over the current ADP from the 1st of July 2021.

The Ministry of Industry and Production Pakistan (MoIP) states: 

The new ADP might introduce a substantial reduction in the prices of small cars. The plan is to make it possible for every middle class Pakistani to buy a car. For that, the government is considering setting a maximum limit of Rs. 10 lacs for all small cars in the country. And if that happens, the public will get a relief of 4-5 lacs in small cars’ cost. 

MoIP continued to state:

Another motive of the new ADP is to discourage the dominance of local auto manufacturers. Currently, we have 30-40% taxes and duties on imported vehicles. So, the government plans to cut back the taxes and duties for imported cars and reduce taxes for imported CBU units. 

However, all of these speculations will only be confirmed when the new ADP is introduced.

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