KARACHI: All Pakistan Motor Dealers Association (APMDA) has written a letter to Federal Finance Minister Ishaq Dar on Thursday in which it complained that the government has favoured local car assemblers over the importers in the 2015 budget.
APMDA Chairman H M Shahzad, in his letter, said that it was surprising to see the government taking back the 10% Federal Excise Duty (FED) from locally assembled vehicles above 1,800cc, which had been originally simultaneously imposed on both locally assembled and imported vehicles.
“For the sake of providing a level-playing field, the government should have withdrawn this duty from both locally assembled and imported vehicles,” he said.
These government measures have disappointed people who are engaged in the business of used cars, the letter said.
He also mentioned that the proposed measure in 2015 budget to cut import duty from 30% to 25% for the completely knocked down (CKD) and semi knocked down (SKD) units will also support the local car assembling industry.
Importers of used cars fear that the government is also considering a proposal of increasing import duty by 10% on all used imported cars of up to 1,800cc engine. They believe that such a move will completely shatter the market of used imported cars.
“It seems that all our efforts and expectations have gone down the drain. The above adverse measures, if implemented, will kill this industry for good – an industry that can yield more than Rs50 billion in revenues per year,” the letter said.
Used car imports in the country are showing a continuous downward trend. The total car imports during the first 10 months (Jul-Apr) of current fiscal year remained 17,984 units, down 57% from 41,800 units in the same period of the previous fiscal year.
In fiscal year 2013, car imports declined to 45,378 units, down 17.5% compared to 55,000 units in fiscal year 2012.
In fiscal year 2012, imports of used cars hit the peak when they jumped phenomenally by 162% from just 21,000 units a year earlier, sparking worries among domestic assemblers who believed imported cars were directly hurting their sales.
Published in The Express Tribune, June 6th, 2014.
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