The Auto Industry Development Committee (AIDC) has approved the localization plan for manufacture of Subuk Raftar Shinery Mini Van, 996cc Power Steering, Subuk Raftar Shinery Mini Truck, 996cc Power Steering and Gru Diesel Truck, 2200cc submitted by M/s New Allied Motors subject to clarifications of certain reservations by PAMA.
According to details DGM Tariff EDB briefed the house about background of the application submitted by M/s New Allied Motors to EDB. He informed that M/s New Allied Motors applied for the manufacturing certificate of following variants at M/s Adam Motors, Karachi and Sunder Industrial Estate, Lahore, simultaneously.
i. Mini Van, 996cc, 7 Seater
ii. Mini Truck/ Pick up, 996cc, GVW less than 5 tons
iii. Single Cabin Diesel Engine, 2200cc, 4-cylinders, water cooling truck
The installation of requisite facilities in Lahore was under process at that time whereas the company intended to carry out contract manufacturing at the plant of M/s Adam Motors in the first stage. Meanwhile, AIDC also reviewed the localization plan submitted by the company and certain shortcomings were highlighted from time to time and the firm was asked to fulfill the requirements. The plant of M/s Adam Motor had the requisite facilities and therefore the approval of two variants i.e. Mini Van, 996cc Subuk Raftar Shinery and Mini Truck, 996cc Subuk Raftar Shinery were granted to the company upon completion of all pre-requisites for manufacturing the aforesaid models in Karachi. EDB issued list of importable components and manufacturing certificate under the contract assembly agreement with M/s Adam Motors on 4th March 2014 to M/s Allied Motors. The house was appraised by EDB and as well as representative of the firm that the manufacturing could not start at M/s Adam Motors after the lapse of more than six months of the approval due to some commercial issues between the two parties.
In the 20th AIDC Meeting, the agenda for approval of power steering versions of the above mentioned approved vehicles at Lahore was requested in addition to light diesel truck as under.
i. Subuk Raftar Shinery Mini Van, 996cc Power Steering
ii. Subuk Raftar Shinery Mini Truck, 996cc Power Steering
iii. Gru Diesel Truck, 2200cc.
Considering the request of the firm, EDB’s Technical Team visited the manufacturing facilities of M/s New Allied Motors twice at Lahore and after finding it satisfactory placed the matter before 20th AIDC meeting.
In the meantime, M/s New Allied Motors also approached EDB that M/s Adam Motor Company changed some conditions of contract assembly agreement which is still under negotiation. Therefore, EDB was informed by M/s Allied Motors that assembly/ manufacturing could not be started at Karachi plant. The cancellation of manufacturing certificate issued to the firm for the Karachi plant was discussed in detail. The representative of Ministry of Commerce was apprehensive that M/s Adam Motors can approach the court of law in case of cancelation which may create legal issues. It was clarified by the representative of M/s Allied Motors that his company has already discussed the matter at length and as such they are also willing to sort out the issue at the earliest.
The committee deliberated on the issue and it was highlighted that at the time of submission of application, the company applied for approval of manufacturing simultaneously at Karachi and Lahore. It was agreed that both the approvals may be considered separately. The participants suggested that CKD Kit imported for the Karachi Plant may be treated as per law.
On a query by the chair, DGM (Tariff) EDB appraised the house that M/s Adam Motors has written a letter to EDB with regard to their willingness to continue working with M/s Allied Motors for contract manufacturing of two variants for which the assembly facilities of M/s Adam Motor were approved. General Manager (Policy) informed the participants that M/s Adam Motors was also invited to attend the meeting with a view to clarify their position but owner of the company was not in a position to attend the meeting due to his foreign visit.
The representative of Ministry of Commerce raised the point whether already imported CKD can be used for assembly of new versions with power steering. It was clarified by EDB that the power steering version of the vehicles Subuk Raftar Shinery Mini Van, 996cc and Subuk Raftar Shinery Mini Truck, 996cc are being considered for manufacturing at Lahore plant the CKD of which is similar except power steering. It was further clarified that manufacturing process of the vehicles is exactly the same; the approval for power steering version should not be an issue as it will be imported in CKD. However, in Lahore plant, the manufacturing of diesel truck is also under consideration. In reply to a question, DGM (Tariff) EDB informed the house that EDB has already approved the facilities of the company to manufacture all the three vehicles as per requirement of SRO 656.
Member Planning Commission of Pakistan emphasized that Vision 2025 envisages enhanced investment to boost the economy and as such the Government should try to facilitate the investors especially in view of the current business environment in the country. He appreciated M/s Allied Motors on making investment in automotive sector of Pakistan and advised that the criteria for investment should be made as simple as possible. He suggested that the committees like AIDC should facilitate and ensure expeditious investments and private sector growth/investment be promoted.
After detailed deliberation, the chair advised M/s Allied Motors to resolve the issue with M/s Adam Motors amicably and recommended that the house may consider granting approval to the manufacturing plant of M/s Allied Motors at Lahore exclusively whereas the withdrawal of contract manufacturing at Karachi may not be considered at this stage till settlement of the issue between M/s Adam Motors and M/s Allied Motors.
The chair advised that both M/s Allied and M/s Adam Motors should forward a joint letter to EDB within two months time highlighting amicable solution to enable withdrawal of manufacturing status for contract manufacturing at Adam Motors.
The representative of Ministry of Commerce highlighted that Ministry of Commerce and FBR should be made part of the approval committee/ technical committee. It was informed that FBR is already a member in the technical committee whereas Ministry of Commerce is the member of AIDC, the forum which grants final approval to such cases.
-Published on pages#-20-21 October 2014 edition of MOBILE WORLD Magazine