In the absence of quality and price check mechanism, the used cars traders are duping Pakistani consumers by offering them imported used cars with no warranty or spare parts availability while denying even the benefit of appreciation of Pakistani rupee this year, PAMADA chairman Iqbal Shah stated this on Saturday.
These used vehicles’ prices were compared with new locally made cars which were superior in quality but have a tag “Made in Pakistan” which unfortunately had not been promoted even by our own government, Iqbal Shah said.
“There is no regulator to keep price and quality of used imported cars in check, while the much cheaper and superior quality “Made in Pakistan” vehicles, despite meeting all the quality standards in the country, were scrutinised for price and quality by many government organisations and some of them even have no jurisdiction to do so.
It can be verified through a small survey of the market that used car dealers are fleecing the consumer by increasing prices of the used cars after every few months, and the government pays no attention to this injustice so the traders are free to exploit the consumer, he said.
The used car dealers not only hoodwink the customers on condition of cars but increase prices also quite frequently. For example, the average price of Prius ranged between Rs 1.7m to 1.85m during December 2013 to February 2014 but it has increased to Rs 2.1m to Rs 2.45m in September/October 2014 whereas the US dollar was standing at 108 in December 2013 and it touched as low as 98 this year.
The average price of Mira during Dec-13 to Feb-14 was Rs 8,00,000 to 9,00,000 but the price increased in past few months and it is now available in Rs 1m to 1.1m even when there is no value addition.
Moreover, the price of Vitz during Dec-13 to Feb-14 was Rs 1.2m to Rs 1.27m but in Sep/Oct this year the price increased to Rs 1.4m. The average price of Passo was ranging from Rs 9,00,000 to Rs 1 million during the Dec-13 to Feb-14 but it increased to the average price of Rs 1.2m in Sep/Oct 2014. Alto’s average price of Rs 9,00,000 to Rs 9,50,000 during Dec-13 to Feb-14 has now increased to Rs 1m – Rs 1.1m in Sep/Oct 2014.
Iqbal Shah said it was worth adding here that the above mentioned vehicles had more than 55% share in total used car imports throughout the year.
Even after increase of the duty rates on import of used cars only by 10pc, the government is still losing $1,950 to $3,781 on import of each used car. During FY 2013-14, the GOP has lost more than US$68 million which could have helped in narrowing down the fiscal deficit.
Another anomaly in SRO-499 compels the OEMs to charge full 17pc GST on their retail sales of Hybrid vehicles from their customers whereas used car importers pay only half of it and enjoys high level of depreciation in duty at import stage as well, he said.
Besides, he added, the OEMs reduced vehicle prices in response to drastic decrease in US dollar that came down to 99 Pakistani rupees from Rs 108 level in the first quarter of 2014. ‘The OEMs reduced Rs 10,000 on Cultus, Rs 30,000 to 40,000 on Civic, and up to Rs 75,000 on Corolla, but used car dealers/importers did not pass on this benefit of reduction in exchange rate to the customers even on stocked vehicle,’ Iqbal said.
