This was the second consecutive year when the country saw a decline in the import of cars. Pakistan imported just 22,220 units in FY14 compared to 45,378 units in FY13.
Imports hit their peak in FY12, when they touched a massive 55,000 units, but have continued to plummet since then.
However, the local car industry must be feeling unlucky as it completely failed to take any advantage of the declining car imports – its direct rival.
Local car sales, after a promising start with high initial sales, managed to see an uptick of just 1% in the outgoing FY14 as its total volumetric sales stood at 136,888 units compared to 135,507 units in FY13.
“The government’s policies regarding imports have contributed to the massive decline in car imports this year,” said the All Pakistan Motor Dealers Association (APMDA) Chairman H M Shahzad.
“The government should look in to the reason why despite a huge decline in imported, local sales failed to gather any momentum in the last 12 months. I believe it is clear that the local car industry is not providing what customers want, which is reliable and affordable cars.”
The biggest dent for the imports was caused by the decision of the previous government to reduce the age limit of used cars imports from five to three years in December 2012.
Moreover, car importers are feeling dejected as this government has slapped new taxes on the registration and transfer of used vehicles, which will further reduce the sale and purchase of used imported cars.
“Customers are waiting for the local car companies to launch new car models, especially in the case of the new Toyota Corolla, which dented local car sales,” JS Global Capital Analyst Atif Zafar told The Express Tribune.
“Another reason why the sales of local and imported cars are stagnant or on a decline is that the purchasing power of customers has not improved in the last few years.” Local car companies have also failed in launching smaller, more affordable cars in the last two years owing to which the imported used car, especially smaller ones, have increased in market share.
Out of the three carmakers, two introduced new models in the outgoing year. Atlas Honda Motors introduced Honda City Aspire and Honda CR-Z while Pak Suzuki introduced Suzuki Wagon R.
Analysts say that after Pak Suzuki has launched Wagon R in April 2014 and Indus Motors have launched Toyota Corolla in July 2014, local car sales will see better results in the ongoing fiscal year.
Published in The Express Tribune, July 22nd, 2014.
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I totally support the view that local industry should be developed however the way Pakistan's auto industry is operating is pathetic.
Just look:
Paksuzuki is selling obsolete vehicles such as the Mehran, Liana, Cultus, Bolan, Ravi which have zero safety features and have been out of production for ages in all other countries.
Local automobile offer zero safety features - even at extra cost most local cars do not have any option for airbags.
Technology transfer has been very poor.
they are in no way like they claim and the government claims manufacturing modern vehicles their products are obsolete cars which have
NO exports. Of course no country if foolish enough to import vehicles with zero safety features and no crash testing.
Sure the government should protect local industry but only after forcing them to give safety features to consumers (these are potential life savers) and replacing models in line with the international market (restricts should be put so they cannot sell obsolete models or the same model for more than 5-6 years)
@ghost: Spot on brother, you were spot on.
@Usman: Same should be done for the Sugar, cement, and fertilizer industries. For example, Pakistan is not a viable country for the production of sugar. Sugarcane requires too much irrigation, and we are a country with scarce water resources.
Awam is burdened by sky rocketing inflation and buying cars albeit new ones is a dream for most now. Also thanks to new absurd taxes on car registration.
Toyota Passo was on retail for Rs. 650000 only 2 years back !!! and here we are with a Mehran for 700000 !!
@ghost: Completely agree with ghost here. They successfully stopped the imports so they could themselves take advantage of their own incompetency, and then were so incompetent that they couldn't even take the advantage! Imports should be allowed without barriers, and local manufacturers should either pick up their game or face the music.
Congratulations to the local car 'manufacturers' mafia/cartel/oligopoly. The bribes to government officials paid off.