KARACHI: The used auto parts market at Shershah seems to have lost its hustle bustle in the last two years owing to high prices of parts, engines and accessories triggered by huge duties and taxes and vulnerable exchange rate.
Said to be one of the biggest scrapyards in Asia, Shershah Kabari Market is also facing a stiff competition from many other auto parts markets that have emerged in the last few years in the city.
Traders and importers of auto parts at Shershah interviewed by Dawn, proudly claim that ‘unlike other markets in the city where smuggled goods are sold, all parts and engines in the decades-old market are duty and taxes paid’.
Getting to the Kabari Market, located at the junction of Lyari, is a daunting task – bumpy ride awaits one on the dilapidated road that touches Shershah Bridge.
Besides 4,000 shops in Shershah market which deal in toys, electronic items, gym machines as well as auto parts, there are a number of godowns and mills located in the vicinity where importers park their consignments after releasing them from the port for onward sales.
Talking to Dawn, traders termed the Musharraf era as the best in terms of thriving business as compared to the democratic terms of the Pakistan Peoples Party, Pakistan Muslim League-N and the ruling Pakistan Tehreek-e-Insaf (PTI).
An auto parts dealer, Mohammad Ayub said, “Traders were busy in the Musharraf era. I have been sitting idle from the morning waiting for the buyers to turn up. Our sales have gone down at least 50 per cent in the last two years.”
High duties and taxes on imported used parts and engines coupled with shrinking buying power has taken away the buyers from the market, he said.
Sharing details, Mr Ayub said, “A Daihatsu Mira 2010-11 model engine is now priced at Rs22,000 as compared to Rs14,000 while Toyota Vitz engine now costs Rs40,000-45,000 as compared to Rs22,000 some 2.5 years back. Toyota XLI 2007 engines sell at Rs60,000-70,000 as compared to Rs26,000-30,000.” He went on to add that duty paid parts and engines are 20pc costlier than smuggled items.
He said complete suspension of Daihatsu Mira and Toyota Vits is available at Rs26,000-30,000 which was priced at Rs10,000-15,000 two years back.
Another importer and trader Mohammad Ibrahim also concurred, “Traders in the market made money in the Musharraf era.”
High taxes and duties on parts have shrunk the business to only 25pc only, he said adding that importers are paying Rs40,000-45,000 as customs duty on four-cylinder engine of cars as compared to Rs15,000 some 2.5 years back while six-cylinder engine vehicle duty is charged at Rs115,000 versus Rs30,000-35,000.
A cumulative expense on a 40ft container now comes to four million rupees while a container arriving from informal channels costs Rs1m, he said.
“Shershah market is free of smuggled parts and engines,” Ibrahim claimed adding that smuggled items sell at auto parts markets at Yousuf Goth, Mawach Goth and Sohrab Goth.
Talking to Dawn, President Anjuman Welfare Shershah Kabari Market Malik Zahid Dehalvi said parts and engines have become costlier by 50pc due to an almost equal hike in duties and taxes in the last two years aimed at curbing imports.
Car owners, already struggling to cope with soaring food inflation and utility bills, are avoiding replacing parts and engines, urging mechanics and suspension makers to first repair the parts and engines due to cash crunch.
“Our sales are down by 40-45pc in the last two years due to costly accessories,” Mr Dehalvi said.
He claimed that four to five shopkeepers had closed down their shops in Shershah in the last three months after facing cash problems due to low sales.
Mr Dehalvi said Toyota Xli engine assembly for 2004-2008 model is now priced at Rs60,000 as compared to Rs25,000-30,000 two years back. Daihatsu Mira 2004 engine is now available at Rs30,000 as compared to Rs10,000-12,000 while new Mira engine costs Rs40,000-50,000 as compared to Rs20,000-25,000. Engine assembly of Toyota Vitz is priced at Rs50,000-55,000 as compared to Rs28,000.
“Bad road conditions and lack of parking space also do not allow buyers to easily reach Shershah,” Mr Dehalvi said adding that Shershah auto parts market at least provides solace to customers as they know that they will find genuine parts irrespective of high prices.
During a visit to various mills in the area, Mohammad Burhan at Kernal Godown told Dawn that the cost of 40ft containers carrying used auto parts has swelled by 33pc in the last two years due to rupee-dollar parity and high duties.
He said imports of used parts have been restricted to only 33pc as many importers are unable to pay the rent of their offices and godowns.
“The government should curb food items’ imports rather than imports of machineries, auto parts and accessories which also provide help to the local industries and vehicles’ owners,” Mr Burhan said.
Owner of a go down at Ghani Mill near Ghani Chowrangi, Fazal Subhan said Japan holds the major share in imports of used auto parts and engines as compared to arrival from the United Kingdom, Dubai, Malaysia etc. “The cost of import has risen by 60pc in the last 2.5 years,” he said. “There are zero smuggled parts and engines at the godowns in Shershah Market,” he claimed.
Higher duties have led to declining trend in imports of engines and parts, he said, adding that there Rs1.87m duties and taxes on 22 tonnes of used auto parts. Mr Subhan said import of truck engines and parts are facing severe downfall while business of car parts and engines is going normally despite huge drop in arrival of imported used cars in the last two years.
Another importer at Ghani Mill, Mr Jahanzeb said the cumulative expenses of duties, taxes, exchange rate and other heads on one container has swelled by 50-60pc on import of used parts and engines. “Our imports as well as local business have come down by 40pc,” he said.
The engine of Toyota Vitz 2005 is priced at Rs75,000 now as compared to Rs40,000 while the Toyota Corolla XLI 1,300-1,500cc now costs over Rs100,000 as compared to Rs80,000, he added.
Published in Dawn, March 7th, 2021