KARACHI - The auto assemblers have strongly criticised Federal Government contemplation to allow import of used cars into the country which are 5-year-old with 2 per cent depreciation benefit. Car makers warned if the said proposal is implemented by the Government to teach them a lesson then they would be justified to hold on their further investments and expansion plan. Sources in auto industry told The Nation that the Federal Government on the recommendation of Ministry of Industries and Production is expected to announce this measure in upcoming Trade Policy 2010-11, scheduled to be unveiled soon. According to the sources, the government plans to comply with the suggestion of the Ministry of Industries by ensuring the ratio of imported cars to locally produced cars from 10 per cent to 15 per cent, relaxing the age from 3 to 5 years on used imported cars and reintroduce depreciation of 2 per cent instead of current 1 per cent. Sources further said the vested interest lobby is playing the role of double-edged sword as in this way it will damage the genuine interest of the indigenous auto industry as well as the revenue collection by the government. The vested interest lobby does not want the local auto industry to grow as the sustainable growth of the industry will bring an end to pilferages and other illegitimate means of earning to the ultimate peril of the industry. The sources in auto sector believe that the auto makers by readjusting their investment and expansion plans would survive this lesson but the revenue loss to the Govt will make it realise late that the decision has had negative impact on the country and only few will benefit that too on short term basis. The impact of foreign exchange loss on imported vehicles will be augmented when the spare parts for 5-year-old cars would come in demand and since the imports will be in an unregulated manner the parts thus would have to be imported. Industry experts are of the view that the government must consider giving overall rebate to local manufactures if it is at all interested in slashing the car prices. If the government is willing to rebate the imported car on the ill-advice of the Ministry of Industries, why is it not considering giving the same rebate to zero-meter Pakistani assembled cars? A fact must be realised that every used car imported into the country will replace a new locally manufactured car which being a strictly documented sector is bound to pay duties and levies up to 34 per cent of total price, while the imported used car compared to local car will give the Govt 50 per cent less duties even if the pilferages are not taken into the account. The sources believe that such actions will not only wipe out the vendor industry and job cuts at OEMs but will also affect governments own efforts to attract foreign investment.