ISLAMABAD, April 1: The government intends to allow import of “company reconditioned cars” with certain duty reductions in the budget 2002-03 if the local industry failed to double its production by May 10, 2002 deadline.
Commerce Minister Razzak Dawood has summoned all the car manufacturers here on Tuesday to forewarn them about the government move following president Gen Pervez Musharraf’s displeasure over high prices and artificial market shortage, official sources told Dawn here on Monday.
These sources said that the president was given presentations by some businessmen, including Pakistani entrepreneurs, during his recent visit to Japan about the performance of reconditioned cars and prices of brand new cars in that country.
The president was surprised to know that new car prices in Tokyo were in some cases half of the same make in Pakistan. Notwithstanding high tax rates in Pakistan, a major reason for high car prices here was reported to be low, artificially-depressed production.
The ministries of finance and commerce had asked all the manufacturers to double the production by May this year and if not possible the government would make necessary provisions in the finance bill 2002-03 for the import of second-hand and reconditioned cars.
The delegation of Pakistan Automotive Manufacturers Association (PAMA) comprising heads of Honda Atlas, Toyota, Suzuki and Dewan Farooq would be asked to commit firm targets to be met by May 10, these sources said.
Car prices in the local market had been on the rise as the dealers were charging premium prices ranging from Rs10,000 to 150,000 per unit due to delayed deliveries by the companies.
The commerce ministry officials said that PAMA had smelled the situation and announced last week to increase their production but the government now wanted firm targets without further leniency.
The government, in some cases, has provided relaxation under the deletion programme that is to expire in 2006 but the local industry has not responded in the same coin and exploited the consumers, the sources said.
The commerce ministry statistics suggest that car production during the first six months (July-December) of the current fiscal stood at 21,618 units as against 21,351 cars produced last year, despite big market appetite.
The local manufacturers’ lobby has successfully foiled attempts by the equally powerful lobby of importers to import second-hand cars for almost a decade, on pleas of threat to local industry, foreign exchange loss and environmental concerns.
