The government is in a fix as the powerful auto industry is exerting full pressure on the government to get maximum benefits from the upcoming auto policy 2015, whereas local stakeholders are demanding international-standard cars at reasonable rates.

In this regard, the visit of a high-level Japanese delegation to the country is considered one of the most significant. Japanese Vice Minister for Economy, Trade, and Industry Tuneo Kitamura and his officials held a number of meetings with different officials. The delegation also met with Minister for Industries and Production Ghulam Murtaza Khan Jatoi at his home on Tuesday. The Ambassador of Japan to Pakistan, Hiroshi Inomata, was also present at the meeting.
According to sources, during the meeting, visiting delegates insisted on more concessions for the Japanese assemblers in the country. The officials were careful not to reveal any further details of the meeting.
Kitamura looked forward to the new auto policy and hoped that the Pakistani government would give incentives to existing investors as well, according to an official handout from the Ministry of Industries. The carefully written press release further mentioned that some of the assurances were given by Jatoi to his Japanese guests.
The minister assured that he would try to extend as much support as he can to new and existing stakeholders in the automobile industry and will ensure that a competitive environment prevails, the release said.
Sources claimed that the Japanese delegation insisted that the government should not press Japanese assemblers to follow international standards for safety and security features.
The guests also requested that Japanese car assemblers increase their prices, which are already very high compared to neighboring countries.
Since 1980, Japanese car assemblers have sold the same technology at the same price as the latest equipped cars. These local cars lack basic security features. They even cannot pass a basic crash test, a basic requirement for all automobile manufacturers in developed countries.
Many years ago, the government announced it would formulate a new policy where all the assemblers would be bound to follow standards, charge rational prices, and break the monopoly of a few assemblers in the market.
Prime Minister Nawaz Sharif, after coming into power in 2013, announced that he would formulate a five-year auto policy that would provide a level playing field for all the auto manufacturers in the country, but it has yet to be announced.
According to a Ministry of Industries official, the delay was due to pressure from industry, as top auto assemblers have not only deputed their representatives with huge budgets to lobby the architects of the new plan but also the Engineering Development Board (EDB) and Ministry of Finance.
Stakeholders have been pointing out that in every part of the world, car manufacturers provide a certificate of crash test, which tells that in case of any crash, passengers would be safe or not, but in Pakistan, no car assembler, including Toyota, Suzuki, or Honda, is providing the crash test report for any vehicle assembled in the country.
It is pertinent to mention that, according to sources, the powerful auto mafia never let the government make any crash test facility operational.
In the absence of any standards, car manufacturers are making cars thinner and lighter every year to make them more fuel efficient, making them more vulnerable to fatal accidents.
According to officials, the technology of Mehran and Cultus is from the 1980s, and every year the companies make smaller changes and market them as new models.
Toyota uses the same body (Shell) for most of its models, but there is a great disparity in the prices. Honda was no different.
In addition to quality standards, pricing is another major subject that was promised to be regulated in the new policy. The prices of Toyota and Suzuki are almost double in the Pakistani market compared to neighboring India.
Officials claimed that the final document will be drafted in such a way that it will allow major Japanese assemblers, including Toyota and Suzuki, to continue selling the same obsolete technology at the same exorbitant prices, or even more.
Pakistan and Japan agree to increase
bilateral trade, investment
Meanwhile, Pakistan and Japan acknowledged on Tuesday the potential to increase the volume of bilateral trade and investment exponentially in light of their traditionally friendly relations and the size of their economies.
Tsuneo Kitamura, Parliamentary Vice-Minister of Economy, Trade, and Industry, and a 57-member Japanese business delegation visited Pakistan and participated in the 5th Pakistan-Japan Government Business Joint Dialogue. The Pakistani side was represented by Mohammad Zubair, Chairman, Privatization Commission; Muhammad Shahzad Arbab, Secretary Commerce; Sohail P. Ahmed, President, Pakistan Japan Business Forum; and an accompanying Pakistani business delegation.
Both sides exchanged their views on a wide range of issues concerning the economic relationship between the two countries, including trade and investment.

The Pakistani side elaborated that Japan is a promising market for their textile products. But Pakistan is in a disadvantageous position because of differential market access as compared to regional competitors like India, Bangladesh, and ASEAN countries. They are enjoying duty-free access to the Japanese market, either because of bilateral or regional trading arrangements or because they have LDC status. Although Pakistan has GSP status and is getting on average 1.4 percent less duty than developed countries, the tariff imposed on Pakistan's exports is 5.36 percent (on average) more than India, Bangladesh, and ASEAN countries. Last year, Japan imported textile products amounting to $38 billion, whereas Pakistan's share was only $123 million, or 0.33 percent. The Pakistani side explained the contents of the "Early Harvest Program" (EHP) to the Japanese side and expressed a desire to discuss EHP, which initially covers specific tariff lines for textiles. It was agreed that, as a way forward, the Ministry of Commerce of Pakistan would get a feasibility study done.
JICA (Japan International Cooperation Agency) expressed its desire to start a technical cooperation project to support the Pakistani textile industry in 2016 in order to produce further high-value-added products and strengthen its international competitiveness.
The Pakistani side pointed out that the Olympics 2020 are opening new doors for the temporary movement of natural persons. Pakistan, with 180 million people and a majority of English-speaking young skilled manpower, expressed its willingness to cooperate with Japan for a successful Olympics in 2020. The Pakistani side requested that Pakistani manpower (skilled and unskilled) be provided substantive opportunities towards this end.
The Pakistani side requested the issuance of longer-term, multiple-entry visas to Pakistani businessmen.
Both sides agreed to cooperate for trade expansion in other private sectors of both countries as well. In this regard, the Pakistani side stated that they will set up a "Consultation Service for Pakistani Companies" at the Embassy of Pakistan in Japan in order to facilitate Pakistani companies business with Japanese companies.
Both sides agreed that the development of special economic zones is important for attracting investment. The Pakistani side shared with the Japanese side the view that investor-friendly amendments to the SEZ Act 2012 are in the advanced stage of approval and would be promulgated by January 2016. The Pakistani side requested Japanese assistance in the establishment of the SEZ Secretariat and the provision of hardware and related infrastructure.
Both sides agreed that the automotive industry should be facilitated as a leading industry and a driving force of Pakistan's economy over the next decades as it creates jobs, explores new innovation, and realizes social prosperity. In this regard, the Pakistani side expressed its intention to issue the new Automotive Development Plan (ADP) as soon as it is finalized, since it is a core policy for the automotive industry.
Both sides agreed to develop infrastructure in Pakistan, such as energy and transport, for further economic growth. Both sides stated that the shortage of electricity in Pakistan is an issue being effectively handled by the current government, and Japanese cutting-edge technologies such as highly efficient coal-fired power plants will contribute to the mutual benefits and prosperity of both countries.
In addition, both sides recognized that the Japanese Official Development Assistance (ODA) loan for the energy sector has been significantly useful for policy reforms. The Pakistani side expressed their gratitude and commitment for their continuous efforts in accelerating these reforms.