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Monday, July 15, 2024

Government taking steps to eradicate own-money in auto sector

In an attempt to combat the overarching “own money” problem that the Pakistani auto industry is facing for a long time, and in turn, decrease the cost of cars for the people of Pakistan government has decided to penalize late deliveries.

According to the reports circulating in the media, the Pakistani government has decided to penalize auto manufacturers who fail to deliver cars to customers later than two months of booking.

This was told in the meeting held under the chairmanship of Sajid Hussain Turi by the additional secretary, Ministry of Industries and Production while briefing the National Assembly Standing Committee on Industries and Production on 1st June.

The national media reports that the decision would be finalized in the upcoming 2021 budget via the addition of a new clause, which would then be applicable from July 2021 onwards, when the budget is activated.

In an attempt to combat the overarching “own money” problem that the Pakistani auto industry is facing for a long time, and in turn, decrease the cost of cars for the people of Pakistan such decisions are being made.

It is worth mentioning that own money exploitation is an illegal practice by the car dealers in Pakistan, and while automotive companies like Toyota Indus have taken steps to ensure the curbing of the practice, it is still happening in Pakistan on a large scale.

Car dealers earn an additional Rs0.15-Rs0.25 million via own money exploitation from each vehicle they sell, along with the manufacturers’ profit margin. On expensive cars, this exploitation can lead to Rs1 million, which is a huge deterrent to buying vehicles for the majority of Pakistanis.

Read More: Aliya Malik shares a snapshot of Pakistan’s upcoming Auto Policy 2021-26

The members of the meeting were also informed by the Engineering Development Board (EDB) officials that as per the policy, it has been decided to impose a fine of three percent plus Kibor on car companies delaying deliveries, usually caused by the own money exploitation.

Pakistan’s EV sector

During the NA committee meeting, Engineering Development Board officials said that to keep the environment clean, the government has also introduced electric vehicles and hybrid vehicles policies, under which by 2030, around 30 percent of the vehicles will be converted to environment-friendly fuels.

This statement is in line with the recent statement by the Special Assistant to Prime Minister on Climate Change Malik Amin Aslam, who said that introducing modern and environmental-friendly transport system through electric vehicles (EVs) in the country is of unprecedented importance to the efforts for coping with Pakistan’s air pollution woes and making cities clean and green under incumbent government’s green agenda.

Last week, this was said during a high-level meeting of the Inter-Ministerial Oversight Committee on National Electric Vehicles (EV) Policy. The SAPM also said, “Introducing EVs in the country’s ailing transport system is pivotal for modernizing it and reduce the carbon emissions that contribute to climate change and smog, improving public health and reducing ecological damage.”

Read More: Pakistan entering the era of EVs with the upcoming auto policy

The recent introduction of Tesla Industries’ State of the art EVX ultra-fast charger to Foreign Minister Shah Mehmood Qureshi is also doing rounds on social media. It is an EVX 120 KW. Founded before American fandom by Elon Musk, Pakistan’s Tesla Industries is a large-scale manufacturer of solar panels, power regulation equipment, inverters, and other equipment.


According to Tesla Industries, their fast charger fully charge an EV within thirty minutes. The announcement was made on 30th April when the company announced that they had charged the E-Tron in the fastest time yet, ie, in just 35 minutes.

In May, Pakistani company Dynamic Engineering and Automation (DEA) signed an MoU with China’s one of the biggest EV charger manufacturers and distributors. We can hope that DEA and RNL Tech will be coming out with a charger of their own for the local market.

Read More: China-Pak Companies join hands in Pakistan’s auto market

Thus, as the new Auto Policy is less than a month away, significant improvements and developments are being made in the sector by both public and private sectors.