PAMADA opposes policy to import used cars

General Karachi

Karachi: Import of any manufactured item is detrimental to the local industry and consumers let alone a car and that too used for five years. Government and legislatures should realize that promoting import of used cars will not only devastate the local industry but will hurt its reputation as well, Iqbal Hussain Shah, Vice Chairman PAMADA said in a statement Saturday.

Pakistan Automobile Manufacturer Assembler Dealer Association PAMADA has questioned the statements and data given by different quarters regarding shortfall in tax collection in case the used car policy is reverted to 3 years.

PAMADA said these quarters cannot prove the misleading figures as the government knows how damaging the imported used cars are for the national economy. PAMADA said the used car business is providing employment to only few out of 4,000dealers nationwide which has non technical labour and cannot be compared with the highly trained and technical staff contributing to GDP through taxes and remittances.

In fact, PAMADA adds, it is local auto industry that has employment of over 2.2 million people. Similarly, local auto industry saves more foreign exchange as it spends on average $4600 to import one CKD unit against the $9800 spent on one used car unit and that too transmitted through illegal means, which means the government is losing $5000 in terms of foreign exchange on one imported car.

Moreover, it is not only the age but the ITPs set in 2005 after which international car prices have been jacked up due to currency depreciation and huge 40% depreciation allowance that eases down imported cars’ prices, if the same rebate is given to local car industry the consumers will have cheaper brand new Made in Pakistan cars.

PAMADA further said that it is quite obvious that only local auto industry creates real economic activity asauto parts worth over Rs. 60 billion manufactured locally every year, while in the used car import segmentthere is no local manufacturing.

More importantly, PAMADA said, local auto industry pays more taxes to the government as ove Rs. 65billion tax contribution was made by the entire local auto industry annually, but imported used cars pay less than Rs. 21billion in this regard.