Here is a new update discussing how Pakistan’s domestic car industry is facing a decline due to a sharp increase in car prices and ill-conceived policies. Recent reports show a significant 684% rise in the import of used vehicles in the first half of the fiscal year compared to the same period last year.
Along with competitive pricing, the presence of additional features is attracting customers towards imported cars over locally manufactured vehicles.
Key Points
Analyzed data reveals a substantial increase in the import of various types of used cars, including economy cars, commercial vehicles, SUVs, vans, and luxury vehicles. This surge can be linked to the removal of regulatory duty on used cars up to 1800cc in the federal budget for the fiscal year 2023-24.
While this action aimed to boost the automotive industry, it is creating challenges for local car manufacturers. Chairman Abdul Rehman Aizaz of the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) warned of a potential loss of around Rs. 36 billion and the risk of businesses closing down.
Experts observe that the belief in imported cars being more dependable and feature-packed is gaining traction among local consumers, leading to increased demand.
The trend of importing used cars is fostering healthy competition in the auto market, encouraging local assemblers to improve features in their models. In a rapidly advancing technological era where customer preferences are crucial, the growing preference for imported cars, especially in major cities, is noteworthy.
While the rise in used car imports poses challenges for the local auto industry and government revenue, it also presents opportunities for advancement and creativity. Balancing the needs of all parties while promoting sustainable growth should be a priority for policymakers as they navigate through this changing landscape.
