Used cars import: Auto industry submits proposals

The auto industry has submitted its proposals to the government regarding import of used vehicles, seeking complete ban on gift and baggage scheme, it is learnt.
Sources told Business Recorder that the industry has demanded that import of five-year old cars should be allowed only under 'transfer of residence' scheme, and depreciation allowance should be reduced to one percent per year, besides limiting total depreciation to 25 percent.
The industry has also asked the government to seize all vehicles imported by violating the rules which, according to it, are released after imposing some penalty.
The proposals have been forwarded by a committee constituted by the government to recommend measures for removing concerns of all stakeholders on import policy for used cars, jeeps, light carriage vehicles (LCVs), trucks and buses. The proposals, if accepted by the government, would be incorporated in the auto policy that awaits ECC nod for clearance.
The committee was mandated to assess losses suffered by the local auto industry and Original Equipment Manufacturers (OEMs) and vendors as a result of import of used cars, jeeps, LCVs, trucks and busses.
The committee was headed by Zahid J. Yaqub, General Manager, Policy Division, Engineering Development Board (EDB), and included Shariq Suhail, Chairman, Pakistan Association of Automotive Parts Accessories Manufacturers (PAAPAM), M. Aslam, Vice Chairman Paapam, and representatives of leading auto manufacturers including Pak Suzuki, Indus Motors, Honda Atlas and Dewan Farooq Motors.
The committee was also tasked to analyse import data of used cars, jeeps, light carriage vehicles (LCVs), trucks and buses during July-December 2006-07 against imports made in the corresponding period of last fiscal year.
The committee was also asked to review the import trends of used cars, jeeps, light carriage vehicles (LCVs), trucks and buses in the country. It would also study demand and supply gap in the country keeping in view local production and expansion in production capacity of the local auto industry.
It may be recalled that the government in 5-year Auto Industry Development Program (AIDP) had conceded that the used car imports and liberal baggage rules led to high import of buses and trucks. Bus sector has registered negative growth (-7 percent) during last five years despite this era of buoyant growth. This also badly affected the bus body building sector.
It said that the import of used dump trucks and concrete mixers has hurt truck assemblers adversely. Bus/truck assemblers have been utilising only 19 percent of their production capacity due to these misdirected policies and poor controls by regulators.
It was of the view that the used vehicle import would not benefit the consumer or the industry and suggested the government of a long-term policy on the issue, which may include strict implementation of TR and baggage rules with compulsory registration of vehicles in the name of returning Pakistanis, for at least one year.