rewrite this content with different wording and keep HTML tags

After long-standing economic challenges hurting Pakistan’s car industry, the local car vendors have come up with another one. And this time, they are complaining about the increased influx of used cars in local market shattering already dwindling car sales.

As per the media reports, the auto sector vendor has urged the incumbent government to steer used car policies in a different direction in the upcoming budget. 

The Concerns

Suffice it to say, they have advised the federal government to maintain strict duties on the import of used cars as the loss to the country’s economy has reached Rs. 50 billion in the first eight months of the current fiscal year.

Marking a whopping 641% surge in used cars, the reports have informed that the number has reached massive 25,000 vehicles during the first eight months of fiscal 2023-2024 against 3,386 units in the corresponding period of last year.

The Root Cause

Concerning the issue, the car vendors hold favorable tax and duties responsible for the ongoing whammy observed in the industry when the previous import restrictions leading to a series of production cuts have already made the things unfavorable for them.

They also pointed out that worrisome grey market transactions for used car imports pose a more significant threat than legal transactions for local manufacturers, leading to potential revenue losses for the economy.

Our Analysis

The vendors’ concerns are certainly valid, but they need to understand why customers are being drawn to import cars. From the customers’ perspective, why wouldn’t they buy a car that is reliable, fully loaded with features, has excellent build quality, and offers good mileage for Rs. 3.0 to 3.5 million? In contrast, most of our CKD vehicles fall short in these areas.

Earlier, the Overseas Investors Chamber of Commerce and Industry (OICCI) has advised the federal government to maintain strict duties on imported cars. According to the media reports, OICCI’s recent budget proposals underscore the need to continue imposing regulatory and additional customs duties on these imports.

What do you think about the car vendors’ concern pertaining to the import of used cars? Drop your thoughts in the comments section.