Car manufacturers call on the government to stop importing used vehicles – Business

Islamabad: The automotive industry has urged the government to determine the future direction of the sector, warning that local production and import of used cars cannot go hand in hand.

In a letter to the ministries of finance, commerce and industry, the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) said the industry and manufacturing sectors provide jobs but government policies discourage them.

“The government must consider the balance between the local industry and imported used cars and make a long-term policy choice,” said Abdul Rehman Aizaz, chairman of Paapam Dawn.

He added that used cars promote traders in Pakistan but actually benefit the economies of the countries where they are manufactured.

“And the imported vehicles do not meet the basic requirement of providing low-cost cars demanded by local manufacturers,” Paapam said.

He added that despite high taxes and other high costs of doing business in the country, the local industry continues to operate and encourages investment.

Paapama’s letter to the government said that despite all the challenges, the industry had localized over 60% of production, producing globally tested and high-quality local parts.

Paapam said there are 13 car manufacturers/assemblers in Pakistan. However, authorities allowed the import of used cars even though the associated network of suppliers and industry support almost 5 million jobs.

Paapam added that the government’s inconsistent used car policies had led to a lack of local product development.

“The design, production and launch of a new model takes approximately four years of development, research and development, testing, quality control at international facilities and huge capital expenditure; there is no support from the industry and suppliers due to lack of trust resulting from politics,” he added in the letter.

Published in Dawn on May 22, 2024