The Pakistani auto industry is urgently appealing to the government to revise the current policies on used car imports, highlighting significant economic losses and detrimental effects on local car manufacturers. This plea comes as the import of used cars has surged dramatically, causing considerable financial strain.
Dramatic Increase in Used Car Imports
Data reveals a staggering 641 percent increase in used car imports, with numbers soaring from 3,386 units last year to 25,000 units in the first eight months of the current fiscal year alone. This influx has resulted in over Rs. 50 billion in losses to the local economy, according to industry representatives.
Local auto industry representatives, speaking to ProPakistani, expressed concerns over the government’s failure to protect domestic manufacturers. Despite substantial foreign investments and employment for over 5 million workers, the sector struggles under the weight of current import policies. The allowance for used car imports, initially intended for overseas Pakistanis, has been manipulated through corrupt practices. Vehicles are often imported under the guise of personal use but are instead sold for profit, undermining local businesses.
Economic Impact and Job Losses
The document outlines how favorable taxation and duty policies for used car imports have crippled the local assembling industry. This has led to decreased demand for domestically assembled automobiles, inefficient production facilities, job losses, and a general lack of motivation to enhance the local industry. The prevalence of grey market transactions further exacerbates the issue, posing a significant threat to legal transactions and resulting in potential revenue losses.
Industry leaders argue for immediate regulatory changes to support local industry growth. They emphasize the need for mutually beneficial policies that foster industry development and job creation. Consistent and favorable policies are crucial to enable the local auto industry to thrive and contribute positively to the economy.
Protecting Local Jobs and Economy
The automobile manufacturers stress the importance of protecting millions of families from unemployment. Despite having 13 local manufacturers and assemblers, the sector still struggles to meet the needs of the common man due to high taxes and duties. The import process for used cars often involves a limited number of individuals engaged in profitable but non-contributory activities, compared to the broader economic benefits provided by local manufacturers.
A Call to Action
The industry suggests that the government should discourage or regulate used car imports to ensure the sustainability and growth of the local auto industry. By doing so, they argue, the government can protect a valuable economic asset and secure the livelihoods of millions of workers dependent on the local manufacturing sector.
As the fiscal year progresses, the auto industry remains hopeful that the government will heed their call and implement policies that promote local industry growth, job creation, and economic stability.
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