Imported used cars demand enhanced during last four months

Despite higher productions and sales of local cars, the demand of the imported used cars is continuously rising in the local markets throughout the country owing to its safety bag and other built-in safety functions.

The new auto policy is still under consideration by the trade minister or Economic Coordination Committee (ECC) for the last three months. It (policy) could be delayed more because of pressure of auto manufacturers on federal government to give them more benefit or time to capture the markets.

Recently, a discussion regarding auto industry was held in the National Assembly and Senate, in which the ministry of trade and industry was directed to force the local car manufacturers to provide all safety features in locally produced cars.

These safety features are installed in all imported used cars including the new navigation system at much lower price compared to the locally manufacturered cars.

“The car manufacturers are demanding extra amount of Rs 2,70,000 for these safety features in fully loaded cars,” the dealers said, otherwise the locally produced car would have no safety features including automatic door locks system etc.

According to All Pakistan Motor Dealers Associations (APMDA), HM Shahzad said: “The dealers have so far imported 5,000 to 5,500 units from Japan and Korea in last four months and most of them are 1,000 CC cars and its cost is around Rs 1.3 to 1.4 million with fully loaded safety features.”

He said the demand of the fully loaded Vitz car was coming from every part of the country as it was more comfortable and strong compared to locally manufactured 1,000 CC cars in Pakistan, he said. Last year, the dealers imported 24,000 units in 2014-15 down from 65,000 units imported in 2013-14.

A local manufacturer (Suzuki) launched a new car ‘Swift’ of 1,000 CC about two-year ago in Pakistan, but its demand could not increase in the country like its other models ‘Cultus’ and ‘Mehran’ as there was no safety features in these cars, a dealer of a showroom at Jamshed Road said.

The on-money on the purchase of new Toyota car is around Rs 1,50,000 to Rs 3,00,000 depending on car’s features. The dealers are earning thousands of rupees on a car with the help of other investors while the customers have to wait three-four months for their cars.

On-money on Suzuki is around Rs 50,000 to 1,00,000 on Mehran and its other brands, and its delivery period is three month. The dealers said the delivery period of all models of Suzuki was around two-three months.

The demand of the fuel efficient Hybrid cars was also increasing in the country, Mr Shahzad said. “This vehicle is not being produced in Pakistan. The dealers have imported around 800-1000 units of Hybrid cars from Japan in last four months.”

The main objective of the import of used cars was to provide cheap vehicles to the customers.

An official of the Toyota Company said: “We give safety feature in all brands if the customer demands but it costs a little higher price.” He said the company sales have gone up to 20,227 units in last four months compared to 14,287 units in the same period last year. In October it sold 5,460 units.”

He said thousands of vendors were earning their livelihood directly or indirectly from this auto industry and if the government gave any further exemption in duties on private importers, the local auto industry would hurt badly.

Mr Shahzad said the government was thinking to give more incentives to the private car dealers to create a competition for local car manufacturers. He said influence on the government was the main hurdle announcing the auto policy for the next five year.