KARACHI, June 6: The government on Monday reduced import duties on CBU cars, giving a new direction to auto assemblers to further boost up their distribution and marketing business by importing costly cars.

The decision to cut import duties on new 1,500-1,600cc cars to 50 from 70 per cent, on 1,600-1,800cc to 65 from 80 per cent, and on 1,800cc and above to 75 from 100 per cent in the budget for 2005-06 is only aimed at benefiting car makers who have already made plans to introduce luxurious cars in Pakistan.

Indus Motor Company and Dewan Farooqui Motors have already introduced costly cars in Pakistan of higher engine capacities like Toyota Camry and Mitsubishi Lancer, while Pak Suzuki Motor Company Limited has also planned to import CBU vehicles in the next three months. World Auto has brought in imported Nissan Sunny.

“The government should have cut import duties on small cars ranging between 800 and 1,300cc in which majority of buyers show interests,” All Karachi Motor Dealers Association (AKMDA) Chairman H.M. Shahzad says, adding that the demand and supply gap of cars still exist at 40,000 units in which a larger portion is shared by small cars.

“It seems that the government has finally succumbed to the pressure of car makers who have demanded not to touch the duty slab on small cars. What is the benefit of cutting import duties on big vehicles when a very small segment of society can afford such costly cars as against over 82 per cent small cars used by the people belonging to various walks of life,” he said.

He said the government had ignored the AKDMA proposal for cutting the import duty on small cars.