In a bid to save the local auto sector and its growth, the auto manufacturers have clearly warned the government not to allow any relaxation in the used car imports policy.
According to the details, a meeting regarding a new scheme for car imports is set to be held on 26th August 2019. The Adviser will chair this meeting to PM, Dr. Abdul Hafeez Sheikh. In this meeting, several issues related to the import of cars will be discussed and the possibility to introduce a new scheme that allows the commercial importers to import vehicles with the imposition of certain Quantitative Restrictions (QR’s). However, the Director-General of Pakistan Automotive Manufacturers Association (PAMA) Abdul Waheed Khan expressed his discontent as they were not invited to the meeting. According to him, it’s incredibly surprising not to involve them in such an important meeting related to the future of the automobile industry. Even the new investors who are working to establish new car production plants in the country have not been involved. The association is also of the view that the Federal Board of Revenue (FBR) has approached the government for expanding the circle of car import to the commercial importers just to enhance the revenue of the department.
Furthermore, the auto industry is also quite disappointed by FBR’s amendment suggestion on the used car imports policy. The auto sector is already going through a crisis period ever since the previous government imposed a ban on the purchase of new vehicles by non-filers. For the last year or so, it has been a roller coaster ride for the automobile industry as the policies continued to change frequently. The government further derailed the auto sector by imposing additional taxes and duties on the automobiles. The economy of the country has deteriorated significantly as the US dollar appreciated massively against the Pakistani rupee thus raising the car prices incredibly. Perhaps, everything seems to be on the rise except the growth and sales of the automobiles.
Under this economic contraction period, offering any relaxation in the car imports may lead to the closure of the local auto sector, which already at the verge of collapse. On the other hand, PAMA appreciated the stance of Commerce Division who stood by its view of not altering the car imports policy regardless of all the pressure it has been facing from outside. The government has been continuously reminded of the investments being made by the existing auto manufacturers for enhancing the localization process in the country. A few have also invested in expanding their production capacity to meet the demand in the market. All these efforts shall be kept in mind by the government before allowing the commercial importers to misuse the import policy once again. Any leverage in the policy would result in the complete shutdown of the local auto industry which is already struggling to stand on its feet at the moment.
It is pertinent to mention here that the Finance Division was of the view that the import policy may be kept intact but its circle to be expanded under several Quantitative Restrictions (QR’s) so that no unfair means of import be used by the commercial importers. According to them, it would bring competition in the auto sector and fill the demand and supply gap. Otherwise, the local automakers are making abnormal profits by raising the prices of their cars extraordinarily. The Commerce Division believes that the importers have been misusing the import policy, which resulted in money laundering and illegal outflow of foreign exchange from the country. Eventually, it’s up to the government to keep a policy that neither harms the local auto sector nor allow any misuse which causes a loss to the country’s economy.
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the automanufacturers want imports to be stopped so that they can continue to black market their cars