Govt cuts age-limit of import of cars to three years

  Govt cuts age-limit of import of cars to three years

In what appears to be a game of electioneering the government has decided to reduce the age-limit of second-hand imported cars to three years from the existing five years – a decision reportedly taken on behest of automobile lobby. It has also withdrawn the decision of fixing petroleum products’ prices on a weekly basis. The decision to this effect was taken here on Thursday in a hurriedly called meeting of the Economic Coordination Committee (ECC) of the Cabinet, headed by Finance Minister Dr Abdul Hafeez Shaikh. The ECC meeting was scheduled for Monday, but the government moved it up, even though most of the ministers were not able to attend, according to the sources in the Cabinet division. The decision on reduction in the age limit for imports will be effective from December 15, 2012 in order to facilitate the already in process orders of imports. “The decision will help the local assemblers which are facing adverse business conditions due to influx of imports,” said the finance ministry. Previously, the government had raised the age limit while arguing that local manufacturers were fleecing the buyers. The Ministry of Industries pleaded that due to the previous decision on relaxation in age, brands like Suzuki Swift, Suzuki Mehran, Suzuki Cultus, Honda City, and Toyota Corollas were at risk of being wiped out of the market. Most of these brands are not locally manufactured but assembled in Pakistan as the sector has failed to implement the deletion plan, protection given by the government to local industry, according to industry experts. The industrial ministry said that surge in influx of imports had resulted in idle production capacity in the domestic industry, and may affect 200,000 jobs.

Car import business to stall after ECC decision, say importers 

Reacting to the government’s decision to reduce the age of imported cars from five years to three years, car importers said on Thursday that the decision is tantamount to forcing the discontinuation of imports of used cars in the country. “The decision will result in the complete shutdown of the used car import business as it will sharply increase the import duty,” All Pakistan Motor Dealers Association (APMDA)
Chairman HM Shahzad told The Express Tribune. “Now consumers will be forced to buy local cars instead of have a choice between imported and local automobiles,” he added. Car importers say their businesses will be hurt due to two reasons: fewer cars will be imported into the country, and the import duty on cars will also rise. “If the import duty on a car is Rs200,000, it will increase to Rs375,000 with this new policy,”
Shahzad said. He said he has no doubt that the decision will result in a decline in the import and sales of used cars in the country.
APMDA has written to the president and prime minster, urging them to consider their point of view before implementing the Economic Coordination Committee (ECC)’s decision. Automobile analysts say that used car imports have significantly dented sales of locallyassembled cars over the last few years. The share of used cars in total car sales in the country has increased phenomenally: 26 out of every 100 cars sold in 2011-12 had been imported, according to data compiled by The Express Tribune. The share of imported cars has phenomenally increased, as more than 55,000 cars reached the country in 2011-12, up 162% from the 21,000 cars imported in 2010-11. At the same time, sales of locally assembled cars surged by 23% to 157,325 units compared with the preceding year’s 127,944 units. However, since the start of fiscal 2013, local car sales have remained low, which has mainly been blamed on the import of used cars.