Import of used cars damaging local auto industry

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The import of used cars in the country is largely damaging the local auto industry known as “mother of industries”, said Indus Motor Company Limited (IMC) Chairman Ali S Habib.

Talking about challenges faced by the industry, he said, “Constant policy is vital for growth of auto industry which is one of the most documented sectors of the economy and amongst the highest taxpayers in the country.”

While ensuring level playing field, the government should also come up with a comprehensive auto policy for at least 15 years and minimise sales tax rate at rational level, he said.

“Many countries have stabilised their economies by strengthening their manufacturing and auto sectors, while taking measures including restrictions on import of used cars and have used tariff and non-tariff barriers to ensure domestic production is not damaged irretrievably. No auto manufacturing country permits liberal imports of used cars as Pakistan and here our government would do well to tighten this policy if the industry is to flourish.”

Automotive manufacturing is a high profile industry that generates enormous revenue, employs millions of people and is proxy for a nation’s manufacturing prowess and economic influence, and therefore regarded as the ‘Mother of all Industries’ due to the value chain it creates.

In USA, five percent of the employed population is involved in automotive and allied industries, while in Japan and South Korea about every eighth person is connected to this industry. Pakistan is set to become the 4th largest populated country by 2030 of 240 million and this presents a huge potential for growth of mobility in the country and equally the opportunity of providing employment and skilled jobs for the growing youth.

“We are fortunate to have Toyota, the number one automaker globally to be our joint venture partner. Over the years this partnership has transformed Indus Motor to become a formidable player in the domestic auto industry creating thousands of jobs, enabling transfer of technology like pioneering robotics and high tech parts manufacturing and above all the human skills development through application of Toyota Production System and exposure of hundreds of our people to Toyota plants overseas,” he added.

Shedding light on completing 25 years of IMC, he said, “From a humble beginning in 1989 with production capacity of 20 cars a day and a workforce of 500 employees, we have today grown into a company of over 2,700 employees and production capacity of 230 cars a day. Our daily sourcing of parts from local manufacturers exceeds Rs 110 million and the contribution to exchequer since inception exceeds Rs 224 billion.”

As per available data net of taxes, the local Corolla is amongst the most competitively priced in the world. The chairman emphasised that this competitiveness level has been achieved on account of the level of localisation undertaken over all these years.

“Over 60 leading journalists from across the country toured the manufacturing facilities and enjoyed hands on driving experience of Toyota Corolla, Hilux Vigo and Fortuner SUV vehicles on the purpose built test track and off road environment. Our businesses partners representing dealership and parts suppliers also graced the occasion.”

 

3 COMMENTS

  1. Instead of improving their car quality they want govt to allow them poor standards that they have now. This is not acceptable. Improve quality or find some other product for production.

  2. No auto manufacturing country permits liberal imports – Wrong! most manufacturing countries allows car import regardless of age and with far less import duties than Pakistan as long as the car is upto specification. UK manufacture not just assemble but allows car to be imported freely by paying VAT (20%) regardless of age if the car is according to UK specifications.
    There is not a single car manufacturer in Pakistan as they only import kits and assemble it to far inferior specifications. If your new cars cant compete with used cars, there must be some reasons behind it quality of these "new" cars based on 30 years old tech in some cases.

    Allow more car manufacturers to enter the market, encourage only transfer of technology by creating local brand that will not have to pay back royalty and profits back to home country. That will create jobs and local vendors.

  3. as usual its the other guys fault. excuse me. produce a better product at a compatative and people will buy, product a lousey product and they will look else where.bits simple as that.

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