Import of used cars and restriction on the sale of local carmakers by placing a ban on the import of CNG kits and cylinders have hit the local carmakers, a local auto dealer of local cars said. The automobile sector such as buses, cars and jeeps and LCVs registered a negative growth of 8.88 percent, 22.93 percent and 30.28 percent respectively in the current fiscal year as shown in Economic Survey 2012-13.
The Survey states that growth in cars and jeeps suffered on account of amnesty scheme as well as import of second hand cars. "The growth prospect of this sector is not likely to ease out till the appetite of vehicles is saturated," the Survey suggests. Around 110,430 cars and jeeps were manufactured during 2011-12 which declined to 85,105 units in the first nine months of 2012-13, showing a 22 percent decrease in demand for local cars.
A car dealer told Business Recorder, "The price of imported cars above the engine capacity of 1300 cc is reflecting a decline in prices compared to cars below 1000 cc engine cars for which demand remains high". He further claimed that prices of imported cars were not sustainable after the former PPP government allowed free import of cars for domestic use. "We know the people who sold their property and invested in imported car businesses without any strategy for the future and lost money," he said.
"The imported used car gives you good fuel consumption compared with local products as long as it is in running condition; later the car owner struggles with the lack of availability of spare parts which are too costly to boot," said a motor mechanic working in 'Enercon Project'. He said demand for imported vehicles slowed down after the introduction of the amnesty scheme by Federal Board of Revenue (FBR) in a bid to regularise non-custom paid vehicles. Around 50,000 non-custom paid vehicles entered the market, he claimed quoting FBR sources.
Another auto dealer of imported cars claimed that majority of imported cars did not have accessories as shown to customers on the net. The fluctuation in prices of the same brand of Toyota Vitz 1000 cc automatic 2008 model depends on the condition of the car ranging from Rs 1.1 million upward. "Most of the used imported cars are in bad shape, and are repaired in Pakistan before being sold," he said.
The Excise and Taxation offices throughout the country amended their rules and regulations after imported used cars and amnesty cars were released on the open market to discourage fake documentation of these cars. Islamabad's Excise and Taxation Office began issuing computerised transfer letters for vehicles, replacing the previous system of transfers by affidavits or ordinary papers.
The new procedure was intended to help make vehicle transfers more transparent, and was also part of an effort to combat crimes including theft, forgery and smuggling, an official of E&T said on the request of anonymity. The computerized transfer letters, bearing security features against duplication, are issued to vehicle owners and attached to registration books. If the letters are lost, consumers will have to file a complaint and bring an FIR from the police station to the ETO in order to obtain a duplicate.
Since original owners are reluctant to come to the office to complete transfers, the ETO requests buyers to bring transfer letters attested by a gazetted officer. Numerous buyers, however, manage to subvert these requirements, and purchase of second-hand vehicles continues to be linked to fraud by both the purchaser using fake transfer letters. Traffic police has begun showing concern over this by deputing personnel with equipments in certain 'car bazaars' to check the vehicles' engine and chassis numbers on the spot other than Rescue 115 who can verify if the car is stolen.
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