Last year Pakistanis imported no less than 80,000 cars into the country, which is evident enough to make a statement that Pakistan’s used car import business is thriving.
While talking to a local media outlet, Dawn, the Chairman of Car Exporter Association of Pakistan (CEAFP) Arshad Mehmood Awan said that despite 200 to 300 duties and other taxes on used cars still the sector is thriving and progressing. He told that we imported 80,000 vehicles in 2017 for local consumers, but still there was a shortfall of vehicles in the market, which we could have eradicated if the government had made import friendly rules and regulations.
It is to be noted here that the perception that due to importing cars the local market is in disarray, which is totally wrong. For the last seven years, the local manufacturers have increased their production by 107 percent with shipping 285248 units annually. However, there is still a big gap in demand, and that is 450000 units per year, and we are filling this gap as best as we can, he further asserted. IMC Toyota said that it will further enhance its production of vehicles in the near future, which is indeed a positive step.
The Chairman said that Earnings per share and growth of local manufactures also rose up, which shows that there is no negative impact of import of used cars on the local automobile industry, on the contrary, it brings diversity to local industry and as well as competitiveness. For the sake of argument, a few days back, Pak Suzuki posted its profits, and there is an increase of 38% on year on year basis.
It would be worth mentioning here that according to the stats of Federal Board of Revenue (FBR) used car import business is the second largest contributor in GDP. It has contributed PKR 121.7 billion in the last two years. Additionally, it is pertinent to mention here that the used car import business contributed PKR 63 billion last year in GDP.
CEAFP was very critical of SRO 1067(1), it even went to court against it. While responding to the question about Hundi or Hawala being used in the used car business, he said that if the allegations are true, then the government should immediately do something about it and also there is a misconception that the schemes which government has introduced for overseas Pakistanis are being misused by the local dealers.
Pakistan is primarily a used car market because local car manufacturers despite putting full efforts are unable to meet the needs of local consumers. Another reason is the long delivery time, which is not acceptable by the people, as they can not wait for months to get their hands on cars. Furthermore, people also import used cars from other countries to quench the thirst of the car with good features.
To add to our reader’s knowledge, CEAFP is an organisation that represents importers, used car traders and clearing agents etc.