Auto industry denounces rise in used car imports

IMC says imports at time of low forex reserves beyond comprehension

LAHORE:

Used car imports have risen and crossed production numbers of some original equipment manufacturers (OEMs) in Pakistan and this situation at a time of import control measures is beyond comprehension, remarked a top official of Indus Motor Company (IMC).

“Day-by-day increase in imports of used cars has been severely impacting the already affected local auto industry,” Chief Executive Officer Ali Asghar Jamali said, adding that more than 6,000 used cars were imported in financial year 2022-23.

Of those, more than 1,200 units were brought in May and June this year.

Talking to a group of journalists on Wednesday, the IMC CEO said that continuous imports of used cars were nullifying the localisation target achieved by Pakistan’s auto industry.

Read Auto industry struggles to meet annual production targets

“In the presence of a minimum foreign exchange reserves, the government should refrain from permitting imports of used cars and instead support local policy for the auto industry, which is producing cars locally,” stressed Jamali.

He was of the view that growth of the auto industry was essentially linked with a properly designed import policy and it could never be achieved in the presence of imports.

The CEO added that despite uncertainty about supply-side recovery, IMC did not opt for any layoffs, which “shows its commitment to the country and wellbeing of its employees”.

Turning to curbs on opening Letters of Credit, Jamali pointed out that the auto industry had been facing the issue for quite some time, making it difficult to maintain sales.

Owing to the restrictions, IMC faced a 58% decline in its sales volume from January to June 2023.

Talking about hybrid electric vehicles (HEVs), the CEO called Pakistan one of the worst victims of climate change as according to the Global Carbon Budget 2022 annual CO2 emissions in Pakistan stood at 229.51 million tons in 2021, which was 9% higher than 210.38 million tons in 2020.

“HEVs are the most sustainable solution to economic problems as they will help achieve macroeconomic goals, generate employment, boost exports and reduce imports,” he emphasised.

“Toyota has made an investment of $100 million to produce HEVs in Pakistan and Corolla Cross, Pakistan’s first locally manufactured HEV SUV, will be launched soon.”

Published in The Express Tribune, September 7^th, 2023.

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