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The Pakistan Automobile Manufacturers Association (PAMA) in its meeting strongly condemned the government decision to allow import of five-year old used cars into the country. "We are particularly disappointed with the role played by our patron Ministry of Industry and Production in this entire saga which have not only failed to protect the interest of the auto industry, but has been instrumental in initiating this change of policy which will subvert the future growth of the industry," a press release issued here said.
"We take no exception to the genuine cases of used cars being imported under the gift or transfer of residence scheme by the overseas Pakistanis but unfortunately this scheme has become a facade for the commercial imports using the hundi system to repatriate funds," it said adding clearly, this is neither going to benefit the country nor the common buyer as already evident from the recent shipload that arrived with 471 vehicles, bulk of which are 1300cc and above that will benefit the privileged few.
The PAMA said that the government argument that over 38,000 used vehicles got imported in 2005-6 without any dent on the local manufacturers, who produced 170,000 plus units is totally baseless with convoluted logic. It was a growing market then and all the OEMs since then have invested over Rs 20 billion during the last four years to expand their production capacities. Despite that all OEMs carried finished inventories for several months.
Our full year outlook for 2010-11 is for 160,000 units with industry capacity of 275,000 units. The auto industry value chain comprises some 1.4 million jobs and provides Rs 34 billion in custom duties and taxes annually. Now the entry of used cars in the market will have serious ramifications for the entire domestic auto industry with potential of workers layoffs. PAMA fully will endorses the view of PAAPAM that this has not only caused greater investment uncertainty and will lead to unemployment.-PR

Copyright Business Recorder, 2011

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