Despite various initiatives taken by the government to discourage the import of used cars, the import of old cars is gaining momentum.
As per available private data, Pakistan has imported over 20,000 units during the past eight months of this financial year. The import of used cars in the whole financial year of 2021 was around 21,000 units.
The imports of used cars had reached the highest figures in 2019 when over 36,000 units of used cars were imported in the country through various schemes or illegal payment channels. In order to discourage the import of used cars the government had later issued an SRO restricting and channelizing the mode of imports and payments.
It was in the backdrop of pressure from FATF to eliminate undocumented payment channels and the imports of used cars was the main culprit in this regard. Following the restriction under the SRO, the imports were declined to around 10,000 units in the year 2020.
However the imports picked up pace again after a short while as over 21,000 units were imported in the FY 2021. Interestingly the imports of used cars seems to continue the momentum as from July 2021 to February 2022, over 20,000 units have been imported showing a jump of further thousands of imports in the remaining four months of this financial year.
Considering this huge import of used cars, it is projected that more than 30,000 cars will be imported by the end of this financial year. If the trend continues, the financial year 2022 will end up with the highest post-SRO numbers of the used car imports in Pakistan.
As per the data around 80% increase has been witnessed in the import of used cars in the past two months. In January this year, at least 2,083 units of used cars were imported and in February 2,778 units were imported.
The analysis of the data of used car imports show that over 4,000 units of economy segment, which included Mira, Dayz, Alto etc. have been imported till date with around 21% share in the total imports. Around 7,000 units of the small segment (including Vitz, Passu, Aqua etc) with 35% share have been imported till date while 502 vans (15%), 2874 SUVs (14%), 82 small buses, and 2863 others (14%) were also imported.
On the other hand, a total 150 units of various models of BMW, Mercedes Benz, Audi, Suzuki and other CBUs were also imported in February.
According to a dealer of used cars imports, the overseas Pakistanis were importing the used vehicles under personal baggage/gift systems/transfer of residence while paying the duty/taxes out of foreign exchange arranged by the Pakistani national themselves or local recipient supported by bank encashment certificate showing conversion of foreign remittance to local currency.
“This double import of both CBUs and used cars in huge quantities is proving very damaging to the local auto industry,” said S.M. Ishtiaq, CEO S.M Engineering. He added that these imports are in complete violation of the government’s policy regarding the imports of vehicles in Pakistan. “This situation needs immediate attention of the policy makers as this would be a double blow to the local auto industry and the national exchequer as well,” reasoned Ishtiaq.
It may be added like the historic jump in locally assembled vehicles, the prices of used cars are also quite expensive making it really difficult for the customer to afford them in the current recessionary time.
