The market for imported vehicles has decreased by a significant degree ever since the enactment of restrictions on the commercial import of vehicles in Pakistan. While the government of Pakistan has done so with the intention of further developing the local automotive industry, the imported car dealers believe that the strategy is impeding the overall growth of the industry.
The chairman of the All Pakistan Motor Dealers Association (APDMA), H. M. Shehzad, has sent a letter to the Ministry of Finance (MoF), proposing changes in the new auto policy that is set for launch after the introduction of the 2021-22 budget.
The letter was addressed to the Special Assistant to Prime Minister (SAPM) on Finance, Dr. Abdul Hafeez Shaikh, in which, H.M. Shehzad began his request by highlighting how the local automakers have been exploiting the market ever since the imposition of restriction on the commercial import of vehicles in Pakistan.
Photo Courtesy: H. M. Shehzad
He added that the new entrants have also joined in on the same practices of increasing prices and delaying the deliveries of their vehicles to the customers and “fleecing the customers in the shape of On-Money” for the early deliveries of their vehicles.
The letter highlighted that the automakers have been importing the vehicles for sale purposes, without optimizing their manufacturing capacities, which ultimately results in delivery delays and further escalation of the On-money culture. It added that the local carmakers have also been blatantly disregarding and opposing the quality assurance measures made mandatory by the government.
The letter further stated that complacency on the part of the automakers has been due to the lack of competition in the market. Based on that argument, the letter suggested that the government should consider revising the restrictions enforced in the SRO 52(1)2019 to further develop the automotive market.
In the proposal letter, some changes pertaining to the tariff rates were also made, which are as follows:
Although several new automakers have recently made their way into the Pakistani market with a fair amount of options, albeit particularly in the SUV segment, the revision of the import policy as a part of the upcoming auto policy will certainly enable competition in the Pakistani market.
It would also push the local automakers to up their game in order to retain their share in the market.