Chinese automakers want the government to include tax and other incentives in the upcoming Auto Industry Development and Export Program (AIDEP) 2021-2026, which is expected to be announced in the coming months, to encourage investors to ‘localize’ hi-tech EV components.
The unnamed MG JW executive reported that his company was requesting additional incentives for importing SKD kits and building new manufacturing facilities for localizing hi-tech parts only in segments including public transportation vehicles, buses, pickup trucks, D-SUV, D-SD, and other vehicles where localization is currently low or non-existent.
“Pre-existing passenger car investments will be unaffected by this decision. He said, “We believe this is a once-in-a-lifetime opportunity for Pakistan to localize high-tech components.” He argued that it was past time for Pakistan to channel new auto investments into local manufacturing of high-tech electric vehicle and automobile components, abandoning the previous deletion strategy that prioritized low-tech parts.
In order to qualify for the lucrative tax cuts provided to new entrants in the industry under the existing AIDP 2016-21, MG JW is currently building a $100 million assembly plant in Lahore, with plans to begin production in May. MG JW plans to release more variants by 2023, with the Chinese firm owning the majority of the JV shares (51 percent). Once the plant is operational, the company plans to bring its electric vehicle models to the Pakistani market.