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“Auto Industry Investment Policy” annoying the Auto Sector – Alfalah Securities Limited

Karachi: According to the new “Auto Industry Investment Policy” issued by the Ministry of Industries (MoI), auto mobile entrants having a production capacity of 100,000 units/year of cars, 25000 trucks and buses and 5000 agriculture tractors would be allowed to import 100% Completely Knocked Down (CKD) kits at a levied customs duty for 3 years for the start of assembling or manufacturing of automobiles.

According to the conditions set by the government for new entrants, they should intend to develop parts locally and should also identify the destinations in their agreement with the partners for export of vehicles and manufactured parts etc. The automobile manufacturers have expressed serious concerns over the issue of 100% import of CKD kits at 32.5% customs duty and 20% on light commercial vehicle as they have made huge investments for the manufacturing of spare parts.

Market Outlook:

Positive.

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