KARACHI (December 02 2007): Prices of second-hand imported cars have started coming down because of non-availability of spare parts and lack of expertise with local mechanics to carry out repairs, according to locally assembled cars dealers.
Contrary to this view, H M Shahzad, Chairman of All Pakistan Motor Dealers Association, said on Saturday that this impression about second-hand cars' prices was being created by vested interest to protect their businesses. He said that import of used cars has lowered black money on delivery of new cars from ready stock and its graduated black money charges on time specific deliveries.
Other car dealers in the used cars business said that these cars have almost eliminated black-marketing of new cars and has stabilised the prices.
They said that old cars were affordable and meet the need of each pocket. They added that repairs of cars not being assembled in Pakistan was not a problem. "Our mechanics are skilled enough to do the needful," they said. However, they said, import of used cars should be liberalised and made easy so that the assemblers who have failed to meet the export target are forced to find market abroad.
They said that the deletion programme was still halfway and there was no hope that Pakistan's automobile industry would be able to achieve it "hundred percent".
Bankers are of the view that leasing and car financing had slowed down because of bank charges and mark-up. "Our branches, which have processed more than 10 to 15 applications for car financing in the past, now process one or two applications in a month."
They said that high mark-up, delayed delivery and 'on money' on different makes had made the business difficult. Some banks, because of defaults committed by a few people, have stopped financing of used cars.
"The price valuation of used cars is a problem. Over-priced cars and default in payment leave the bank in a lurch and, in case of default, the bank gets only the over-valued car, which sells at much below the assessed price. This results in default." They said that banks were now thinking to review their policy of financing used cars.