Car import business to stall after ECC decision, say importers

Reduction in allowed age of imported cars to limit supply, raise duties.


Farhan Zaheer November 22, 2012

KARACHI:


Reacting to the government’s decision to reduce the age of imported cars from five years to three years, car importers said on Thursday that the decision is tantamount to forcing the discontinuation of imports of used cars in the country.


“The decision will result in the complete shutdown of the used car import business as it will sharply increase the import duty,” All Pakistan Motor Dealers Association (APMDA) Chairman HM Shahzad told The Express Tribune.

“Now consumers will be forced to buy local cars instead of have a choice between imported and local automobiles,” he added.

Car importers say their businesses will be hurt due to two reasons: fewer cars will be imported into the country, and the import duty on cars will also rise.

“If the import duty on a car is Rs200,000, it will increase to Rs375,000 with this new policy,” Shahzad said. He said he has no doubt that the decision will result in a decline in the import and sales of used cars in the country.

APMDA has written to the president and prime minster, urging them to consider their point of view before implementing the Economic Coordination Committee (ECC)’s decision.

Automobile analysts say that used car imports have significantly dented sales of locally-assembled cars over the last few years.

The share of used cars in total car sales in the country has increased phenomenally: 26 out of every 100 cars sold in 2011-12 had been imported, according to data compiled by The Express Tribune.

The share of imported cars has phenomenally increased, as more than 55,000 cars reached the country in 2011-12, up 162% from the 21,000 cars imported in 2010-11. At the same time, sales of locally assembled cars surged by 23% to 157,325 units compared with the preceding year’s 127,944 units. However, since the start of fiscal 2013, local car sales have remained low, which has mainly been blamed on the import of used cars.

Published in The Express Tribune, November 23rd, 2012.

COMMENTS (2)

arsh | 9 years ago | Reply

I agree people buy imported cars coz of better built quality. Atleast they have another option to smaller cars. Unfortunately Pak consumers wont see smaller cars. And these assemblers will not bring in 660cc cars either. Because they have created a monopolist environment. Suzuki makes 1000cc or less and Toyota popular with 1300cc and now they have brought 1600cc so they may not compete with Honda in 1800cc category. All three have joined forces to rob the consumer and earn maximum profits. Since they are not competing with each other.

Paki | 9 years ago | Reply

such a dumb decission. people dont buy imported car because they are cheaper. they buy them because they are better. perhaps instead of hiding behind inefficient barriers such as import duties, the local manufacturers should attempt to introduce something special into the market. none of the local manufacturers are servicing to the fuel efficient sector of cars which these imported cars provide. even the new mehran has very poor fuel efficiency (as high as a 1300cc corolla) and any owner of a coure would now how much fuel it consumes. this is contrasted with cars such as the imported mire which offers milage as high as 18 kpl

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