Govt urged to discourage import of used cars

ISLAMABAD: Pakistan Automotive Manufacturers' Association (PAMA) and Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) have warned the government that any move in favour of the import of used cars would not only discourage foreign investment in the local auto industry but would also result in loss of thousands of jobs, besides outflow of precious foreign exchange reserves.

In a statement issued on Tuesday, PAMA appreciated the government for issuing a Statutory Regulatory Order (SRO) to curb the misuse of used cars, which was causing depletion of foreign exchange from the economy.

However, it also expressed concerns that the commercial importers were trying to pressurise the government by proposing various import schemes which will "only result in damaging the local auto industry and the country's economy".

The automotive manufacturers urged Prime Minister Imran Khan not to consider any such proposal, as it would result in massive de-industrialization and unemployment.

"Well thought-out conditions stipulated in the SRO will only facilitate genuine overseas Pakistanis, discourage misuse of policy by unscrupulous commercial importers, ensure proper documentation of the entire transaction and help Pakistan comply with its international commitments towards Financial Action Task Force (FATF) and Anti Money Laundering (AML) laws."

They said only recently, the government had provided incentives under Auto Development Policy to attract global original equipment manufacturers (OEMs) in order to increase local automotive output and stimulate the economy in line with the vision of "Make in Pakistan".

"This policy has attracted several new entrants who have invested over $2 billion cumulatively and are about to start their volume production," they noted. "Liberalising the import of used vehicles will go against the spirit of this policy and discourage global OEMs from further investments in Pakistan."

They further said that local manufacturing, combined with hundreds of parts' producers, dealers and the industry's four million employees, generate far more revenues, as compared to concessionary duties earned from import of used vehicles.

Approving the import of used cars would send a wrong message to all existing and new investors who have invested in Pakistan, trusting that the government would ensure long term enabling policy environment. "Please do not compromise that trust for short term gains."