Earlier this month, a meeting was held by the Engineering Development Board (EDB) on the proposal to allow the commercial import of used cars in Pakistan. The meeting was held with automobile dealers who showed their inclination towards commercial import of used cars. Previously, EDB had vehemently opposed concessions given to the importers of used cars.
According to the EDB, the commercial import of used cars can lead to detrimental effects on local automobile manufacturers, spare parts manufacturers and the new entrants under the Automotive Development Policy (ADP) 2016-2021. Based on this rationale, the Ministry of Industries and Production has turned down the proposal favouring the commercial import of used cars.
Analysis
The Automotive Development Policy (ADP) 2016-2021 has attracted a huge amount of foreign direct investment in Pakistan. This would lead to an increased degree of competition in the auto sector and will also be conducive for job creation in the sector. Moreover, a few new entrants have also decided to exports automobiles from Pakistan. In an era of increasing imports and decreasing exports, this will be a positive step forward.
Allowing the commercial import of used cars will put the hard work of Automotive Development Policy (ADP) 2016-2021 in jeopardy. It will also go against the basic premise on which the policy was launched, which was to strengthen the local auto sector and boost its production. Furthermore, existing automobile manufacturers are increasing their production capacity to cater to increasing market demand. If that demand is met with imported vehicles, it will serve as a deterrent for future investors seeking to invest in Pakistani auto sector.
However, the importers of used cars are still rallying to ask for concessions from the government as the 2019-2020 budget is about to be presented.
Tell us what you think about the rejection of this proposal in the comments section below.
Once again corrupt government and it’s institutions side with the local teen-dabba assemblers. No free market mechanism. No consumer rights protection and no accountability on the low-quality and unsafe vehicles being produced by local assemblers.
GoImranGo
Insane, u can charge heavy duties but can not ban the imports. Devise a system for the imports rather than gift and baggage scheme, let these assemblers know that they have to offer quality because user knows what quality is..
Mafiya jeeta geya………….😥😥😥
Used car import will destroy our automobile industry not only this but present industry will not go for expansion and new investors will not come which will result in jobs creation proble.m technology transfer and FDI all will bear the negative effects. Used car imports will will give benefit to FBR and custom officials who benefits personally and thus increase corroption and black money. There is no other use Govvt cannot take benefit of even accumulating taxes becoz that money mostly goes to custom inspectors pockets and not to FBR.
Tricky question, I believe it’s important to make local industry competitive which means increasing efficiencies in current production capacity, however value addition which import vehicles offer also needs to be checked
Import of used cars was there (using gift/baggage schemes) when the ADP16-21 was being formulated, when benefits to be extended to new entrants were being decided, when its implementation started and it has now been 3 years since then. How is it that it has become more of a threat to local assemblers during last two remaining years of the ADP? Perhaps its more of pockets being filled to push an agenda rather than any real threat to mere entrenched monopoly assemblers. Min you, there are no true manufacturers here. They are all assemblers.
Further, lets not forget that ADP benefits were supposed to be exclusively for new entrants bringing in fresh investment and for closed units. It was not intended for entrenched monopolies like Pak Suzuki, Toyota Indus and Honda Atlas who are likely lining pockets of government bureaucrats to get undue favors at the cost of consumers as has been happening since many decades now
The assemblers are unable to meet market demand despite demand decreasing rapidly due to excessively predatory increase in pricing of cars. Clearly, there is a space in the market for cheaper, safer and better featured cars.
The local car manufacturers including Toyota n Honda are providing sub standard cars devoid of safety. Recently in Australia Toyota recalled Toyota Corolla 2011 onwards for replacement of defective air bags.Ever heard in last 25 years any recall or provision by these Pak manufacturers. Even don’t bother to take any responsibility on del of new cars like a scratch on by or lights.The used cars mostly have all systems working and these run better than local produced junk.
This step can only be said as “nice” if the Local Car Industry had more than 3 Choices and they were providing Quality Built Vehicles & weren’t taking advantage of limited choice that we’ve.
The main bargaining chip that they’re using is the Industry they’re running locally & the jobs they’ve given, but they’ve no plan of bringing the prices down or increasing the quality.
& What Kia lucky motors done at first or lately?? launched a 4Million PKR car?? & people were crying out for Rio, do we see it until now??
& Now they’ve come to stop the Imports??
The reasons given are quite lame and Totally Unreasonable, current local producers have taken tooo Much Time Already, all they launched are BLOODY EXPENSIVE Vehicles, Haven’t got their range broaden, increased quality or decreased the price.
This step had simply made them more Stronger & More Confident than Ever to continously continue their Monopoly, Provide Low Quality vehicles & charge insanely high prices of their choice.