KARACHI, Sept 7: Around 99 per cent of used cars are coming into Pakistan under various schemes mainly from Japan, where only 8,000-10,000 Pakistani citizens are living, which suggested that used car dealers were misusing these schemes.
Auto part makers of locally assembled cars informed the Ministry of Industries on Friday that it is impossible that each and every Pakistani resident based in Japan either has the financial resources, or has chosen to come back to Pakistan or then has become so generous as to gift a car back home.
Imports of used cars are allowed under gift, baggage and transfer of residence schemes. These schemes specially disallow commercial import of used cars and are meant only to facilitate overseas Pakistanis to bring used cars under various schemes.
Used car dealers are heavily misusing these schemes by effectively indulging in commercial import activity by using local Pakistan passport copies to import vehicles.
Chairman Pakistan Association of Automotive Parts and Accessories (PAAPAM) Syed Nabeel Hashmi said that instead of discouraging the import of used cars, the Ministry of Industries has invited All Pakistan Motor Dealers Association (APMDA) to meet on Sept 13 to discuss issues pertaining on the import of used cars.
Representatives of PAAPAM and Pakistan Automotive Manufacturers Association (PAMA) are also invited.
In a letter to Secretary Ministry of Industry Shafqat Naghmi, the Association’s chairman said the responsibility of the Ministry is to promote local industry but instead it is engaging APMDA which is an interest group of traders of used vehicles even more damage to the local auto sector.
Hashmi said the used car dealers are selling five year old cars by pocketing a profit of Rs 150,000-200,000 per vehicle and as a result the price of old cars is the same or even higher than brand new vehicles being locally produced.
He urged the government to restrict the age limit of used cars to three years besides reducing the depreciation allowance to 36 per cent.
Import of cars (mostly used cars) surged to $371 million in 2011-2012 as compared to $151.3 million in 2010-2011.
He said this is not the time to hit the local car makers and their vendors seriously when local contents in locally produced cars are very high. In case of cars it is up to 70 per cent, while the local contents in bikes, three wheelers and tractors is over 90 per cent.