Cabinet Division rejects cut in age limit for import of used cars

Says industries ministry summary violates rules of business.

KARACHI: The Cabinet Division has rejected a summary suggesting that the age limit set for import of used cars be reduced from five years to three years, show documents available with The Express Tribune.

The summary was sent by the Ministry of Industries to the Economic Coordination Committee (ECC) of the cabinet, but the Cabinet Division declared that it was in violation of the rules of business.

The summary supported the stance taken by local car assemblers, who insisted that the increase in used car imports was creating difficulties for them. According to the summary, the increase in the age limit of used cars from three to five years has caused an extraordinary increase in the import of used cars, which has become equal to 37% of domestic production.

The summary stressed that there was very insignificant difference between prices of locally produced cars and imported used cars and thus the objective of providing people cars at economical rates could not be realised.

The summary pointed out that Pak Suzuki Motor Company is working at 61% of capacity, Honda at 25% and Indus Motor at 80%. Indus has 3,000 vehicles lying unsold and Honda has 2,080 unsold cars.

In response, the Cabinet Division, in a memorandum, reminded that recommendations for amendments in the import policy for used cars were beyond the jurisdiction of the Ministry of Industries, saying the matter was dealt with by the Ministry of Trade and Commerce, which had issued the previous notification for increase in the age limit.

The Cabinet Division was of the view that after the bifurcation of Ministry of Industries and Production into two separate ministries, the subject of production of cars had been assigned to the Ministry of Production.

Published in The Express Tribune, October 17^th, 2012.