According to analysts, due to the restriction on car imports and the depreciating value of rupee, car imports in the first ninth months of the current fiscal year plummeted by 42% to $209 million.
The latest Pakistan Bureau of Statistics (PBS) data shows that in the same period last year, car imports totaled $359.5 million. Last month, on a year-on-year basis, car imports had dropped by 80% to $6.1 million.
Even the clearance of cars at customs has halted because of the restrictions imposed by the government, confirmed customs authorities.
In the budget 2018/19, a restriction was imposed on non-filers preventing them from registering imported cars with the relevant authorities and stopped them from buying locally manufactured cars by the government.
Although, the incumbent government tried to reverse these measures through its first mini-budget – Finance Supplementary (Amendment) Bill 2018 – it was forced to drop the idea after severe opposition from stakeholders.
It is pertinent to point out that the condition was relaxed for overseas Pakistanis, thus allowing them to register the cars even if they weren’t filers.
However, in the second mini-budget – Finance Supplementary (Second Amendment) Bill 2019, the government relaxed some of the measures and lifted the ban that prevented non-filers from purchasing locally-manufactured motor vehicles. While this condition was withdrawn after pressure from local car companies due to fall in sales, the restriction on imported cars stands along with the condition that customs be cleared in foreign currency.
On the other hand, cars of commercial nature are still banned and can only be imported under gift scheme, residence transfer and personal baggage. In January, the commerce ministry announced that taxes on imported cars should be paid in dollars.
Devaluation of the rupee was another major factor in the fall of car imports because the cost of these cars increased despite the fact that over the past 3 years, car imports have seen consistent growth and seen large foreign exchange outflows from Pakistan. In 2015/2016, 2016/2017, 2017/2018 they amounted $325.62 million, $431.46 million, $456.19 million respectively.