Used cars' import: motor dealers decry reduction in age limit

All Pakistan Motor Dealers Association (APMDA) has expressed disappointment over reduction in age limit of used imported cars from five to three years saying "it's a stab in the back of Pakistani consumers as well as overseas Pakistanis." In a letter to President Asif Ali Zardari and Prime Minister Raja Pervez Ashraf, H M Shehzad, Chairman of the Association has sought time to apprise both high-ups as to how the overseas Pakistanis will be affected with this unilateral decision.
The association has opposed the ECC decision on the following grounds: (i) the consumer will be denied the right to choose and buy a good quality car of his choice with all accessories and safety features at an affordable price; (ii) monopoly of local assemblers will be firmly established, prices of locally assembled cars will increase in addition to black marketing and; (iii) government will lose Rs 32 billion revenue.
According to the association, the ECC decision tantamount to complete closure of the used car import business as with 3 years age and present depreciation policy the cars will become prohibitively high and unfeasible for overseas Pakistanis. Those overseas Pakistanis who are engaged in the business and who have purchased cars worth millions of dollars for Pakistan and are holding them for shipment in Japan will be wiped out completely, Shehzad added.
The association has requested the government to reconsider its decision as it has been taken just to satisfy the strong lobby of the local assemblers without hearing importers. The government took hasty action in September 2012 by announcing Custom General Order (CGO) and slashing rebate on import from 60 month to 48 month. If CGO remains intact even after the ECC decision to restrict car age to three years, dealers will import only three years old cars but they will get 24 month rebate which is totally unfair both way, said another stakeholder. "If the government sticks to its decision to restrict used car import to three years, the CGO should be withdrawn and rebate of 1.5 percent should be given so that dealers have to pay 36 months and not 24 months rebate," he added.