According to recent media reports, the Minister for Finance and Revenue Shaukat Tarin has directed the relevant authorities to expedite a detailed policy brief on the promised “Meri Gari” car financing scheme.
According to profit, this issue came under discussion in a recent meeting held to discuss the finalization of the upcoming Auto Industry Development and Export Policy (AIDEP) 2021-26 as the government has planned to finalize the policy and present it to parliament in the ongoing month.
Reportedly, the Ministry of Industries and Production (MoIP) has been asked to quickly prepare a consolidated policy for car financing in the country. The government is working with the banks to offer car loans at a lower rate of five to six percent to facilitate buying of cars by the middle and lower classes of Pakistan.
Reportedly, the secretary for Industries and Production informed the participants about the salient features of the current AIDEP draft.
The vision of AIDEP shall be to make Pakistan a hub for competitive manufacturing of auto parts and vehicles for local markets as well as for export, as it has been claimed by many representatives of the MoI&P and Aliya Malik have claimed.
According to Profit, the finance minister stated that the proposed AIDEP aims at the expansion of the auto industry in Pakistan by increasing the production of cars, motorcycles, tractors, etc. The topmost priority is to ensure consumer welfare through the availability of cars at affordable rates for the middle and lower-income groups, he said.
The finance minister also reportedly emphasized the importance of Electric Vehicles (EVs) and affirmed to provide incentives for developing the EV market in Pakistan including charging infrastructure.
He said the promotion of EVs will reduce dependence on oil import bills and promote environment-friendly options.
Present in the meeting, Minister for Industries and Production, Hammad Azhar also said that new entrants may be encouraged in the auto sector particularly for EVs. “This, in turn, would encourage auto companies to invest in related infrastructure in Pakistan,” he added.
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Auto Financing breaks records
Car Financing in Pakistan sees a historic high as the number reached Rs308 billion for the month of June. The lower cost of borrowing and the increased buying options for the local people are arguably the two most important factors in this regard.
According to the recently released State Bank of Pakistan (SBP) data, the car financing for the consumers has increased 46 per cent from Rs211 billion worth of borrowing in June of the preceding year. Compared to the latest pre-pandemic period of FY19, car financing saw an increase of 43 per cent in June 2021.
The industry experts have predicted that car sales would increase further due to the incentives offered by the government in the recent budget and the upcoming auto policy 2021-26.
EV production to hit off
On Thursday, while addressing a consultative workshop on ‘scaling up electric mobility in Pakistan’, organized jointly by the National Energy Efficiency and Conservation Authority (NEECA) and UNDP, the Minister for Energy Hammad Azhar expressed hope that the Electric Vehicle (EV) production in the country would begin this year.
He said that the government had introduced a comprehensive EV policy last year giving incentives to promote the adoption of electric vehicles in the recent budget as well.
The minister however commented that the sector faces certain challenges that need to be met in order to promote this policy. “First, we have to provide a reliable supply of power to charge these EVs and this would require upgrading the grid and distribution network”, he said.
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The minister said that a “regulatory framework” is needed to streamline the development of EV charging stations across the country. According to Tribune, he urged the NEECA and other relevant entities to expedite work on regulation, standardization, and licensing policy for the development of charging infrastructure.