LAHORE - As the new auto policy is facing a long delay the imports of used cars have doubled in the first four months of the current financial year in comparison with the same period last year, eating up hundreds of vending jobs and putting immense pressure on local manufacturers.
The imports in the first fourth months of 2015-16 have jumped to 14106 units, with 4041 imported in the month of October. The imports were just 7982 units with 1886 in October in the first four months of 2014-15.
The share of hybrid vehicles has also increased with the import of 3200 units in the said four months, making it 23% of the total imports. In October 850 hybrid units were imported. The import of hybrids was 1347 units with 350 in October and has share of 17% in the four initial months of 2014-15.
According to the details of the used car imports of the first four months of 2015-16, the import of up to 800cc segment stands at 2302 units with 714 units imported in October, while the above 800cc to 1290cc segment witnessed the import of 3968 units with 1027 imported in October.
The import of 1300cc to 1800cc segment was 1714 units with 519 in October while in the van, pickup, minivan segment (up to 800cc) the imports were 3310 units with 984 only in October. The import of SUV segment was 2342 units with 625 units in October.
Similarly, the luxury segment (above 1800cc) imports were 144 units with 39 in October, while the import of busses and trucks segment stood at 326 units with 133 in October. ‘The reason behind the increasing imports of hybrids is that the importers are taking advantage of lower duty on hybrids over and above the normal 1 percent waiver for each month on used cars,’ said an industry official.
Also, there is alarming increase in the import of luxury cars which shows the policy makers are in fact facilitating the richest segment of the society in acquiring used cars at concessional duties.
“Though the import of used cars was allowed by the policy makers to facilitate the consumers in buying cheaper cars, this purpose has been defeated as all the used cars being imported in the country are retailed at much higher price than their equivalent local variant,” added the official.
For example, he added, all 1300 and 1600 variants which are three years old are sold at higher prices than the local equivalent cars like three years old Vitz is more expensive than brand new Suzuki Swift produced in Pakistan.
“It is this lower duty that results in the loss of billions of rupees to the government every year. The local auto industry therefore has been requesting the government to increase the fixed duty on used imported vehicles as per the new vehicle prices worldwide,” reasoned an expert.
He added that lower duty entice importers/customers due to which vehicles are being imported in huge quantities despite the fact that local industry is fully capable to meet local demands.
“Approximately over 2 times more Forex is wasted on importing a used car as compared to importing a CKD. This puts Pakistani rupee under pressure which continues to devalue,” he added.
He added no country with domestic auto industry allows for used car imports, in fact they discourage it by using all sorts of tariff and non-tariff barriers. “Japan and South Korea are two big auto producing nations that have almost negligible imports. All industrialized nations like Korea, India, and Thailand protect their local industries by discouraging imports,” added the source.
On the other hand, statistics available on the portal of Pakistan Automotive Manufacturers Association (PAMA) regarding production of locally produced vehicle reflect that in last four months from July 2015 till October 2015 around 60,748 units of passenger cars were produced. Breaking into, 12,994 units in July; 16,802 in August; 15,337 in September and in October total 15,615 units of passenger cars were produced locally.