Ministry deliberates on car import policy

ISLAMABAD – The ministry of commerce has initiated the framing of a comprehensive policy for the import of used cars by considering demand and the recommendations of all stakeholders. “We have to strike a balance between imports and local car production to normalise the prices and ensure that the end consumer stands to gains,” a top official of the ministry has said.
It may be recalled that the Economic Coordination Committee (ECC) had earlier given a green signal to the importation of five year old cars on December 8 in place of earlier regulations which permitted the importing of three year old automobiles.
The decision to increase the model age-limit for the import of used cars up to five years was taken after the issuance of a number of warnings to car assemblers in the country to slash prices of their manufactured products with an aim to facilitate the Pakistani consumer. However, the ministry of commerce on December 30 suspended its earlier notification of December 8, which had allowed the import of cars not older than five years could be imported under the Personal Baggage, Gift and Transfer of Residence Scheme. Apparently the import of used cars was not well received by car manufacturers who claimed that the decision would result in national output plunging.
The official at the ministry of commerce was of the view that car manufacturers of the country have formed a virtual monopoly and were involved in boosting car prices at will and opined that ‘the value of a car is less than its price tag.’ However, he was of the view that the issue of monopoly should have been addressed by the Competition Commission of Pakistan (CCP) which is the competent authority to check anti-competitive business and collusive market practices in the country. “The CCP should have probed the case and formed a check to the cartelisation being witnessed; this could have helped reduce car prices in the country,” he remarked. He was also of the view that the government doe have another card up its sleeve to normalise car prices, saying that encouraging new investment in the car manufacturing sector and allowing eased import of used cars could help rationalise prices in the market.
It was also revealed that all these issues are under discussion in the ministry and in the due course of time, appropriate measures including car price reduction, safeguarding local industry, encouraging competition and providing relief to the end consumer will be implemented. For local car manufacturers, the import of used cars would risk their interests whereas the ban on imports would affect importing traders while the automobile spare part manufacturers are well placed in the situation to benefit in both the cases, the official noted.