KARACHI – Several importers have placed orders to import cars following the government’s decision to allow import of up to five years old second hand cars, sources told Pakistan Today on Thursday. Sources have learnt that approximately 6,000 second hand cars are being imported by different parties, investors and individuals.
However, the decision to import up to five years old cars has embarrassed the government as auto manufacturers in the country, seeking its reversal, have taken this issue with the prime minister, said sources.
The prime minister had expressed surprise over this decision, notified by the Ministry of Commerce, with a view that it would damage the local industry. Prime Minister Syed Yusuf Raza Gillani has hinted reversal of this relaxation, but prior to any further change in the status of the used cars import, several parties have booked import orders to buy foreign assembled cars of their choice, said sources.
They said that the import orders placed before the date of further change in the age of second hand importable cars would be honoured by the customs authorities.
Sources claimed that the increasing import of used cars would pressurise foreign exchange reserves, enhance imports bill and could possibly affect the dollar-rupee exchange rate.
The first five months of this fiscal year has seen import of vehicles augment by 20 percent. The country has spent $508 million on the vehicles import from July-Nov 2010, compared to $422 million spent in July-Nov 2009.
Import of completely knocked down/semi-knocked down cars has increased by 34 percent as it reached $272 million in five months of FY2010-11. However, completely built units import has dwindled by 11 percent in this fiscal and has squeezed to $37 million from July-Nov period.
The country would lose more than $50 million worth foreign exchange in case the government continues to allow import of five year old cars, said sources. Sources, however, maintained that the Federal Board of Revenue would generate a significant amount of tax revenue from the enhanced import of second hand cars in case the government continued to allow import of up to five years old cars.
Sources felt that the government was pursuing Chinese manufacturers to assemble their cars in Pakistan, while contrarily the decision to increase the age-limit of used importable cars would undermine government’s efforts to attract foreign manufacturers.
