Institute discourages used car imports

Says import facility being misused by commercial importers.

LAHORE: The Pakistan Institute of Trade and Development (Pitad), in a recent study, has discouraged the import of used vehicles and laid stress on long-term policies for the stability and growth of domestic automobile industry.

The auto sector could not be in a position to compete with international players without institutionalising a strong industry-focused policy as import of used cars in an auto-manufacturing country would cause huge damage to the domestic industry, said Pitad, which focuses on policy research.

“This leads to lack of investment in industrial infrastructure and hampers the creation of employment opportunities, economic growth and generation of tax revenues,” it said.

“The government has not allowed import of used cars for commercial purposes. However, the facility that was meant for expatriate Pakistanis is being misused and commercial import of used vehicles is being made by the importers.”

After an analysis of the used car import policies applied by regional economies, the study suggested that states in the region were using non-tariff barriers along with tariff curbs, but Pakistan had no standards or technical barriers, which must be applied across the board.

Similarly, an assessment of the auto industry’s tariff structure indicates that the protection given to the sector has been weakening over time.

“The absence of an auto-quality policy provides room for lack of implementation of 27 safety and quality standards. This is encouraging the use of vehicles which are old and are not fit to use and these have become a health and environmental hazard.”

In the study, Pitad recommended to the Ministry of Commerce that the maximum age of used cars, vans, mini-vans, sport utility vehicles, 4x4 vehicles and light commercial vehicles should be restricted to three years and a uniform system of customs valuation be adopted regardless of whether the vehicles were below or above 1,800cc engine capacity.

Published in The Express Tribune, April 25^th, 2015.

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