‘Car imports under special regime cause loss of Rs10b’

Published: April 7, 2012

More than 35,000 used cars have arrived at the port and hit the roads in the past 12 months.

LAHORE: 

Allowing used car imports under the special regime – a scheme that does not require custom duties payment – has resulted in a loss of Rs10 billion in six months, according to Pakistan Association of Automotive Parts & Accessories Manufacturers.

More than 35,000 used cars have arrived at the port and hit the roads in the past 12 months.

The automobile parts industry has lost an estimated Rs25 to 27 billion in sales, as local auto industry remained under pressure and sales were hindered by the arrival of used cars, said Chairman Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) Nabeel Hashmi.

Hashmi, in a meeting on Friday to discuss repercussions of used cars in the country, said that local production of cars and LCV’s have registered a massive reduction of 22,000 to 25,000 units owing to the import of used cars.

However, data released by another automobile body contradicts this statement as car sales grew by 17% to 98,252 units during July 2011 to March 2012, according to the Pakistan Automotive Manufacturers Association.

“Giving customs department discretion to further reduce applicable duties up to 60% depreciation has literally allowed imports of used cars for free,” said Hashmi.

Now precious foreign exchange will have to be wasted on import of spare parts for these used vehicles, which will also cause a loss to the exchequer to the tune of $50 million only in one year, he estimated. “Hundreds of components such as rims, tyres, batteries, radiators, steering wheels, air conditioners and other parts, which are produced by local vendors, will now be imported,” he said. Vendors were directly providing jobs to almost 200,000 skilled workers along with over two million indirect workforce, who fear layoffs if imports of used vehicles continued in high numbers, Hashmi added.

Published in The Express Tribune, April 7th, 2012.

Reader Comments (5)

  • Iqbal
    Apr 7, 2012 - 1:40PM

    Government should allow 100,000 cars to be imported. That is the only way these car assemblers will understand. now they have monoply on the prices & are dictating

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  • Big Rizvi
    Apr 7, 2012 - 3:09PM

    @Iqbal: On the stop, mate! I myself am sick and tired of these used Japanese cars. Let’s give Ford, GM and Chrysler a test drive.

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  • Apr 7, 2012 - 3:45PM

    agreed,kia,hyundai,daeewo and ford are producing good cars,why not give them chance too.

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  • Farhan
    Apr 7, 2012 - 5:14PM

    Import only small cars, there is no need to import 1300cc cars as rich can afford to buy new honda toyota etc.

    Why is that used cars are as expensive as new cars? I dont understand this point.

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  • akhroot
    Apr 21, 2012 - 5:11AM

    Cars in Pakistan are more expensive than even the first world countries. Heaven sakes let the monopoly end and allow duty free import of foreign cars.

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