Pakistan Automotive Manufacturers Association (PAMA) Director General Abdul Waheed has said that the Competition Commission of Pakistan’s (CCP) mandate is to create a level-playing field in the best interest of consumers and economic growth, however, in auto industry’s case the commission has seemingly lost its purpose.
Automobile manufacturers are aligned with the development of local industry and new players so that consumers have more choice. The CCP was to ensure competition among Pakistani manufacturers but not to make the automobile market a battleground for local and imported used vehicles.
The commission is actually trying to reverse all the developments and progress of the local auto industry by suggesting adversary measures like allowing commercial import of used cars. However, current used car imports scheme under the ‘gift and personal and baggage schemes’ adds to transactional costs in the form of extralegal formalities in addition to high import duties. The PAMA has been continuously presenting its case to FBR that government is losing millions of dollar on import of used car every year due to SRO 577(I)/2005. Even after duty revision in budget 2014-15, the government is losing USD 1950 to USD 3780 on import of each three year old used car. ‘This is not their mandate, discussions on extent of illegal imports in used car industry and CCP’s interest in it would be another debate’ said the PAMA DG.
As regards to bench marking their industry with India and Thailand, Pakistan auto import policy is most liberal in world where all types of new vehicles are easily importable without any condition, whereas locally produced vehicles have to meet local safety and emission standards. He explained that there was always a misconception in minds of policy makers that automobile industry in Pakistan was highly protected without realisation of the facts the actual protection to Pakistan auto industry ranges from 17.5pc to 42.5pc whereas the Indian automobile industry enjoys 70pc to 90pc protection. Similarly, Thailand Auto Industry protection benefit was 50pc, he added.
