ISLAMABAD: The Competition Commission of Pakistan (CCP) has endorsed open import of used cars, as well as the notion to increase the age limit of imported vehicles from the existing three years to five years in an effort to break the monopoly of local car assemblers.
In a recent study, CCP found that there is no fair competition in the local industry and the policies of the government are there to protect the big three local automakers at the expense of consumers.
The CCP has also suggested the government to withdraw the three controversial Statutory Regulatory Orders (SROs) that protect the existing players by restricting new automakers to enter the industry. Such as the SRO 639 of 2006 which imposes several conditions such as the new entrant should localize the parts within three years of operations and pay high duties for their CKDs and other parts.
The draft of the study was made public by CCP at a time when the government is in the process of making the new auto policy.
It is also mentioned in the study how the three core players in the industry do not maintain quality and safety standards of the vehicles as compared to the same models internationally, while charging exorbitant prices.
The study also emphasizes that with the end of monopoly in the local market, many foreign investors would show interest in the auto sector of the country, as with the current policies, the foreign investors are least bothered, the result being less choices for the consumers. This is also necessary to bring new technology in a country as the current technology used is at least 20 years old.
You can download and read the full report from CCP by clicking here.