Hurting the locals: Weak car sales blamed on import of used vehicles

Inconsistent policies, economic slowdown have also dented demand: industry.

LAHORE: The automobile industry players have said that sales of locally assembled cars have slowed down this year, blaming sluggish economic activities in the country and continuous import of used cars.

They cite “unimpressive” sales figures for passenger cars for 10 months (January-October) of the current year during which sales dropped 4% to 96,782 units compared to 100,692 units sold in the corresponding period of last year.

Sales of different variants of passenger cars, including all major brands, did not pick up and recorded lower sales compared to last year.



They lashed out at some car dealers, who in spite of the reduction in age limit for the import of used cars from five years to three years, continued to bring second-hand vehicles, albeit in smaller quantities.

In a statement on Friday, Pakistan Association of Automotive Parts and Accessories Manufacturers Chairman Usman Malik was of the view that the automotive industry and auto part manufacturers were still reeling from the aftershocks of inconsistent import policies, heavy import of used cars and amnesty schemes of the previous government.

He said sales of cars assembled in the country, including light commercial vehicles, vans and jeeps, fell 11% to 9,955 units in October compared to September, leading to a sharp decline in demand for auto parts.

This, he said, was primarily because of economic slowdown in the country and unchecked import of used cars.

Though the dealers claimed that import of used cars had plunged after the cut in the age limit, it was still damaging sales of locally-made cars as an average of 2,000 used cars were being imported every month, Malik claimed.

He listed major factors that were driving down demand for cars which included
persistent inflationary pressure, further fuelled by a higher general sales tax
that kept buyers at bay, depreciation of the rupee against the dollar and stiff competition with imported used vehicles.

He remarked that the present import policy continued to pose a threat to the domestic auto industry because, except for used cars, other vehicles such as vans, SUVs and 4x4 vehicles up to five years old could be imported.

Published in The Express Tribune, December 7^th, 2013.

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