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Pakistan Autos_Auto Policy'21 Fresh incentives announced (AKD Daily, Dec 23, 2021)

AKD Daily

Pakistan Autos: Auto Policy’21 Fresh incentives announced

 

  • While much of the policies have already been incorporated and made effective through FY22 budget, the cabinet this week approved fresh incentives for the local auto industry.
  • The fresh incentives include reduction in the duty structure for the new model launches (concessional CD of 15% and 30% on non-localized and localized parts, respectively). The said incentives will be applicable for the period of 3-yrs after the new model launch.
  • Similar incentives have been approved for the newer models of tractors (15% CD vs existing 35%) and motorcycles & rickshaws (30% CD vs existing 46%).
  • The overall capex of AKD auto universe has swelled 117%YoY in 9MCY21, among which the highest increase has been witnessed by PSMC (+470%YoY) suggesting the launch of 4th generation Swift in CY22 which may trigger a rally in stock in near future (TP: PkR277/sh). On the other hand, INDU (TP: PkR1,607/sh) is investing US$100mn to launch local HEVs in the country, thereby putting themselves ahead of their peers.

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