EDB prepares AIDP to double contribution to auto industry
By Asad Cheema

ISLAMABAD—Engineering Development Board (EDB) has prepared a comprehensive Auto Industry Development Programme (AIDP) aiming at doubling the contribution of the industry to GDP and its turnover to Rs.600 million in next five years and reaching to an export level of US $ 350 million for components mostly to the international after market to the Original Equipment manufacturing (OEMs).
According to EDB sources, the board has prepared Auto Industry Development Programme (AIDP) envisaging a detailed incentive regime, workable mechanism, procedure and relevant rules on productive asset investments, technology acquisitions, research & development, human resource development, auto cluster and auto industry development committee.
The sources said that the board has also has released the draft of AIDPhere on Wednesday for stakeholders’ comments and to incorporate their suggestions in the draft AIDP.
They said that AIDP also envisages a production turnover of Auto Industryto reach Rs.600 billion by 2011, the contribution of Auto sector to GDP to reach 5.6 percent and the share of the industry in the manufacturing sector to reach 5.6 percent.
Likewise, they said that the employment level to increase form 192,000 to250,000 as direct jobs and from around 1 million jobs to 2.5 million as indirectjobs in the service sector such as retail, repair and maintenance, petrol stations, car wash, logistics,insurance ,publication and advertisement services..
They added that the motorcycles, tractors and cars are expected to identify markets for themselves ,thus raising the export potentials to US $ 300 million by the year 2011-12. They said that the Auto Industry in Pakistan does not produce criticalcomponents such as engine parts, transmission and gearing , as the volume of cars in less then what actually needed for such manufacturing.
However, they said that the vendors are supplying forgings and castings ,certain machinized parts ,sheet metal, plastic and rubber parts,chassis assembly ,fuel tanks and certain electrical components. According to the drafts AIDP, it has also proposed certain solutions to the government on used vehicle imports, auto exports, emission controls, strengthening of safety, standards and accreditation, registration and licensing system, road network programme and motor vehicle examination system.
It also contained formation of an auto industry development committee with equal composition of public and private stakeholders, which would be responsible for steering the development of auto industry and to examine, certify and recommend the entitlement of proposed incentives for an assembler or a vendor.
AIDP also includes Auto industry Investment policy, commonly referred as new entrant policy which provides eligibility criteria, benefits and terms and conditions for new assemblers of cars / LCVs. It may be recalled that EDB has drafted the Programme after consultationswith the stakeholders’ starting with a workshop in March 2006.
Its basic objective is to develop the industry on sustainable basis throughmproposing pre-announced five years tariff structure on CKD, CBU and auto parts for all categories of vehicles.
The Programme will safely steer the industry through to the transitional phase after the introduction of Tariff Based System (TBS).
The stakeholders have been invited by EDB to offer their comments ataidp@edb.gov.pk by 4th December 2006. The full text of the program is also available on its website (www.engineeringpakistan.com). EDB subsequently, aims to arrange a workshop of stakeholders to finalize the document before submission to the government.