Import of used cars crippling local auto industry: IMC chief

LAHORE: Chief Executive Indus Motor Company (IMC), Ali Asghar Jamali has lamented that total used car imports have crossed the production numbers of some Original Equipment Manufacturers (OEMs) in the country.

“This situation at the time of import control measures is beyond understanding,” he said, adding: “Day by day increase in the imports of used cars has been severely impacting the already affected local auto industry.”

He revealed that more than 6,000 used cars were imported in the financial year 2022-23, with more than 1,200 units being imported only in May and June this year. He added that continuous huge import of used cars is adding to the woes of the local auto industry, as this issue is also nullifying the plausible localization achieved by local auto industry.

“In the presence of minimum foreign exchange reserves held by SBP, the government should refrain from permitting the policy of importing of used cars and instead support the local policy against auto industry, which is producing cars locally,” he suggested.

He mentioned that industrial growth of auto industry, is essentially linked with a properly designed planned import policy, and it can never be achieved in the presence of imports, while parallel imports of used cars against local manufactured cars cannot go together in tandem with locally manufactured vehicles.

Yet, added Jamali, the IMC has been continuously investing and despite registering a 55% reduction in production, they have not gone for any layoffs. He added that despite uncertainty regarding supply-side recovery, they have not opted for any layoffs, which shows their commitment to the country and the wellbeing of their employees.

He said, “The local auto industry has been facing the issue of LCs for quite some time, making it difficult for the industry to maintain its sales.”

The IMC faced a 58% decline in its volumetric sales from January to June 2023, he added.

Talking about Hybrid Electric Vehicles, the IMC CEO said that Pakistan is one the worst victims of climate change as according to Global Carbon Budget 2022 annual CO2 emissions in Pakistan stood at 229.51 million tons in 2021, which was 9% higher than 210.38 million tons in 2020.

“Therefore, HEVs are the most sustainable solution to the country’s economic problems, as it would help achieve macroeconomic goals, employment generation, exports boost, and imports reduction as well,” he opined.

He said that HEVs are the most logical option to reduce carbon dioxide emission in fossil fuel reliant countries like Pakistan and India, which have 62% and 75% share of fossil fuels in their energy mix respectively.

“Toyota has made an investment of $ 100 million to produce HEV vehicles in Pakistan and Corolla Cross, Pakistan’s first locally manufactured HEV SUV, is to be launched soon,” he highlighted. He said that the adoption of hybrid technology will also result in the reduction of import bill, as 30000 units of HEVs will save around $ 37 million per annum.

Copyright Business Recorder, 2023