Used cars import hurts local industry

OUR STAFF REPORTER LAHORE - Any further relaxation in used vehicles’ import will result in total closure of local auto makers with a job loss of more than 2 million workers in auto and allied engineering industry. This was stated by a spokesman for Pakistan Automotive Manufacturers Association in a statement issued here. The spokesman said that allowing import of five years old cars is already causing embarrassment to the government which allowed the same to make cheaper cars available to consumers but most of them are priced at the rates of new locally made cars. The tax evading trader mafia has mustered the courage to further this embarrassment by demanding relaxation on commercial import of used cars up-to 10-year-old which is suicidal for our already precarious economy. PAMA Spokesman said the auto industry has been deeply perturbed by this new ridiculous demand of a lobby which does not contribute in job provision or technology transfer and evades taxes on large scale besides under invoicing and fleecing the customers. He said that the trader lobby has not only asked the Federal Minister of Commerce to further relax the age limit of used imported cars from five years to 10 years but also to allow the commercial imports of the same. “This will destroy the local industry and would make Pakistan a junkyard,” he said warning that the resultant job losses could create serious social situation for the GOP. He pointed out that the government was deceived by this lobby to believe that the rates of locally produced cars are very high. He said the car assemblers provided the government with authentic data to prove that the vehicle rates in Pakistan are in fact lower than many countries including India and Thailand but the car dealers successfully tricked the government and resultantly GOP relaxed the import of used cars up to five years. He further added that now the local market is flooded with used imported cars but their rates are extremely high compared with their age. A used imported four-five years old Suzuki Alto with an engine of 650 cc and depending on condition is being sold in the local market at Rs. 700,000 to Rs. 750,000 where as customer could buy brand new locally made alto with 1000 cc engine for this much money. Similarly, he said that another most imported brand Vitz costs a little over Rs.1.1 million while its parallel version Suzuki Swift is marketed by local manufacturer at the same price. Furthermore, he added that mostly luxury cars are being imported which is depriving GOP of precious foreign exchange. The spokesman said the government definitely has all the information in this regard and should have reprimanded the dealers that assured that the rates of used cars would be much lower to benefit the consumers. He said that now the importers’ lobby have come up with the idea of bringing in 10-year-old used cars that are considered junk the world over. These cars would increase pollution levels in the country and would burden the consumers in long run due to non-availability of spare parts and local capacity for after sales service.

Source: http://nation.com.pk