Used Cars import to affect local industry

Relaxations in used vehicles’ import will result in total closure of local auto makers with a job loss of more than 2 million workers in auto and allied engineering industry. This was stated by a spokesman for Pakistan Automotive Manufacturers Association in a statement. The spokesman said that allowing import of five year old cars is already causing embarrassment to the government which allowed the same to make cheaper cars available to consumers but most of them are priced at the rates of new locally made cars.
He was of the view that the tax evading trader mafia has mustered the courage to further this embarrassment by demanding relaxation on commercial import of used cars up to 10 years old which is suicidal for our already precarious economy.
PAMA spokesman said the auto industry has been deeply perturbed by this ridiculous demand of a lobby which does not contribute in job provision or technology transfer and evades taxes on a large scale besides under invoicing and fleecing the customers.
He said that the trader lobby has not only asked the Federal Minister of Commerce to further relax the age limit of used imported cars from five years to 10 years but also to allow the commercial imports of the same. “This will destroy the local industry and would make Pakistan a junkyard,” he said warning that the resultant job losses could create serious repercussions for the government.
He said car dealers successfully tricked the government into believing that the domestic car industry was producing expensive cars and resultantly government relaxed the import of used cars up to five years.
He further added that now the local market is flooded with used imported cars but their rates are extremely high compared to their age. A used imported four-five year old Suzuki Alto with an engine of 650 cc and depending on condition is being sold in the local market at Rs700,000 to Rs750,000 where as customer could buy brand new locally made alto with 1000 cc engine for this much money.
Similarly, he said that another most imported brand Vitz cost a little over Rs1.1 million while its parallel version Suzuki Swift is marketed by local manufacturer at the same price. Furthermore, he added that mostly luxury cars are being imported which is depriving the government of precious foreign exchange. The spokesman said that the government definitely has all the information in this regard and should have reprimanded the dealers that assured that the rates of used cars would be much lower to benefit the consumers.
He said that now the importers lobby has come up with the idea of bringing in 10-year-old used cars that are considered junk the world over. These cars would burden the consumers in the long run due to non-availability of spare parts and local capacity for after sales service.
“Allowing import of used vehicles commercially will not only be unfair to the poor consumers but a death warrant for the local industry which has invested billions of rupees over past decade and provided jobs to millions of people”, he said. “Even if restricted import under change of residence is allowed, the duty rates are so high and environmental conditions are so stringent that import of used cars becomes unviable for true owners as well,” he added. He said that the government after observing the prices of used imported cars should have reviewed its decision to allow their import. Instead, he regretted that state is encouraging unscrupulous elements to fleece the consumers.