KARACHI: Import of used cars dropped sharply year-on-year in 2013-14, but local assemblers who had been lobbying against the arrival of second-hand vehicles have failed to take advantage of the situation as their sales remained subdued.

Data shows that import of used vehicles (from 660cc to above 3,000cc including 4x4 jeeps) plunged to 22,185 units in 2013-2014 compared to 44,767 in 2012-13.

The government netted around Rs9 billion in customs duty collection in 2013-14 from used vehicle import compared to Rs18bn in 2012-13. Used cars arrived under transfer of residence, personal baggage and gift schemes.

Around 16,193 units of up to 1,000cc cars were imported compared to 26,525 units in 2012-13. The customs duty collections consequently fell to Rs 3.46bn from Rs4.2bn. From 1,001-1,300cc, only 37 cars were imported as compared to 2,193 units.

According to All Pakistan Motor Dealers Association (APMDA), imports of 1,301 to 1,500cc cars stood at 2,646 units compared to 12,255. Only two units were arrived in category of 1,501cc to 1,600cc in 2013-14 compared to 48 units in 2012-13.

Total imports in 1,601-1,800cc stood at 2,364 units compared to 2,427 units, while in 1,801cc- 3,000cc segment, only 35 units came from abroad compared to 61.

Only 18 units of above 3,000cc vehicles were imported during 2013-14. The number was 82 in 2012-13. In jeeps (4x4), around 890 units came compared to 1,176.

APMDA Chairman H.M. Shahzad said local car assemblers failed to raise their sales amid persistent decline in imports of used cars. Year-on-year sales of locally produced cars remained flat in 2013-14.

Cut in age limit of used cars to three from five years coupled with reduction in depreciation to two years’ limit has depressed the import of used cars and government’s revenue collection, he said.

In budget 2014-15, the government increased the import duties on used cars. Besides, changes in withholding tax would also affect the retail price of used cars. “People may now find it harder to afford a car,” said Shahzad.

In a letter to Finance Minister Ishaq Dar, APMDA chairman said the government must realise that in the absence of any decent public transport system, car is a necessity and not a luxury.

“Pakistanis have become the highest taxed people in the world as everything is taxed directly or indirectly,” he said.

Published in Dawn, July 15h, 2014