Age of the imported car: 5 years or 3 years?

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The debate about the age of the imported cars have been continuing for the last one year where the OEM’s are pushing the government to reduce the age of the car from  5 to 3 years whereas importers want the government to stick with the current policy. Both the stake holders have their own point of view and arguments to support their cause. Let us review the point of view of both the parties and suggest some solution to the problem in which both the parties should come out with a win-win situation.

OEM’s manufacturing cars in Pakistan are working since 1982 when first Suzuki rolled out of the production line. Since then, Pak Suzuki has produced more than one million vehicles. Toyota and Honda followed Pak Suzuki and set up manufacturing facilities in 1990 & 1992 respectively. All these 3 companies have contributed significantly in developing local vendor base which has resulted in development of manufacturing industry of Pakistan.  It is estimated that the total number of auto-parts manufacturers has exceeded one thousand and providing jobs directly or indirectly to over 200,000 persons. The auto parts manufacturers have contributed significantly to indigenization of the locally assembled vehicles as well as in development of the engineering/industrial capabilities. Massy Ferguson and Fiat Tractors have been indigenized to 87%, various models of Suzuki vehicles from 30% to 65%, Hino & Nissan trucks 40%, Mazda trucks 35%, Honda and Toyota cars 28%, Honda and Yamaha motorcycles 80%. (Source: PAMA)

During all the years the industry was protected by the government by not allowing imported vehicles. This resulted in monopoly of local manufacturers and the people were forced to buy locally made cars with poor quality at exorbitant prices. Even the customers were made to wait for 2 months after depositing advance payments to these companies. The situation changed after Pakistan became signatory to WTO which requires level playing field for all the players. Subsequently duties were reduced and import of vehicles was allowed with age limit of 5 years in 2003-4 under three different schemes. The arrival of imported vehicles raised the customers’ expectations since features like power windows, power steering, ABS brakes, air bags they all come as standard in imported cars. The same situation is prevailing right now. The local manufacturer’s especially Pak Suzuki does not seem to be willing to introduce new models with new features; instead they are again trying to sell their obsolete models by restricting the imported car’s age to 3 years.

In my opinion the government should adopt a balanced policy by creating the level playing field for both players keeping in view the interest of consumers as well. The age of the car can be reduced to 4 years or the import duty can be increased a little bit without changing the car limit. This will help our local industry to become competitive in price, in comparison to imported cars which are currently selling at lesser price than local cars, hence ensuring job retention for thousands of workers.

On the other hand if the government reduces the age limit to 3 years the imported cars will become expensive and the local manufacturers will again get a chance to sell their obsolete models with advance money at premium prices. So a healthy competition should remain there, otherwise quality of locally produced cars will not improve and the consumer will not get maximum value for their money.

P.S. A company like Honda with a brand like Civic has been forced into design change only after 20 months of its launch. Reason: Tough Competition from competitors like Hyundai Elantra, Chevrolet Cruze, Ford Focus etc.

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  1. Usman Raza says

    instead blackmailing government they should improve the quality of their vehicles. They need to understand that things like Air Bags and ABS brakes are not luxuries… they r essentials of every vehicle now a days… IF they can provide better quality vehicles with all those features found in JDM cars…. then people will definitely go for their vehicles instead of used/refurbished JDM vehicles..

    One more thing , they also need to lower down their profit margin on cars and government should also cut down the tax rate on these vehicles.

    and for "NA-PAK Suzuki motors" guys stop producing a piece of shit(Suzuki Mehran)… u blood sucking vampires dnt even give carpet with that new "TEEN Ka DABBA" u call as Mehran…. consumer has to buy it separately… :@

  2. Sufyan Khan says

    5 years actually the should make it 10 years.

  3. Hammad Siddiqui says

    It should be 10 year instead of 3 or 5

  4. Alamzeb Khan Swati says

    At least 10 years. But here in pakista

  5. Faisal Qamar says

    and its been done 3 years import allowed now.

  6. Ali Salman says

    frog shaped suzuki swift for 1.4 million rupees… wonderful local manufacturers.

  7. Farha Qazi says

    Mmmm u r right

  8. Omaima Khan says

    should be 10 years why keep an ugly cow if you get pure milk in a can.

  9. Ovais Ahmed says

    The age limit should remain 5 years as if you further extend to 10 years then you will have again obsoleted models like you see 70 and 80's model still running on our roads, if we want to get rid of those vintage models, the age limit should remain 5 years but duty rate should be as it was before July 2012. But unfortunately Govt has already given a decision and no one is challenging them in Supreme Court I think maximum petitions should be filed in the court for reversion of policy as both parties Govt and local car manufacturer are bribing each other.

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