By Gohar Ali Khan

Copyright brecorder

KARACHI: Importers and used car dealers have expressed grave concerns over what they termed a “propaganda campaign” against commercial import of five-year-old used vehicles, which is expected to be allowed and implemented by Pakistan government from October 1, 2025 for the first time in the country.

All Pakistan Motor Dealers Association (APMDA) Chairman H M Shahzad said the draft of the bill [Motor Vehicles Industry Development Act 2025] “is good for the local auto industry, but it does not suit the importers and car dealers”.

“We have been calling for the permit of commercial import of used cars for a long time. The commercial import of used vehicles is to be allowed because of the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) and that initially an additional duty of 40% will be imposed on import of used motor vehicles over and above present rate of duties. However, import duties on used cars encompassing from 122% to 475% are already being paid,“ he told Business Recorder.

Import of used cars poses an ‘existential threat’ to Pakistan’s auto industry

There are some conditions that discourage dealers. The draft of the bill [Motor Vehicles Industry Development Act 2025] reportedly should have been prepared by the Ministry of Commerce instead of the Engineering Development Board (EDB), according to APMDA chairman.

“If we are manufacturers or assemblers, the EDB and the Ministry of Industries and Production should deal with these matters, but we are importers and vehicle dealers. When it comes to import and export, this domain comes under the Ministry of Commerce.”

The conditions mentioned in the draft of the bill include getting a licence from the EDB.

“The conditions can successfully be met by the local assemblers instead of commercial import of used car dealers who are being kept away from this business deliberately.”

In recent letters written to Prime Minister and Federal Minister for Commerce, APMDA has urged the government to include their representatives in any further discussions regarding the bill.

Shahzad termed Gift Scheme, Personal Baggage Scheme, and Transfer of Residence (TR) Scheme a “lifeline for overseas Pakistanis”.

“Any attempt to disturb or abolish these schemes would be a denial of their rights,” he maintained. “Furthermore, these schemes are a source of sizable revenue for the country in the form of duties which are supposed to be paid in foreign currency remitted by them according to encashment certificates from abroad.”

He stressed that people engaged in the business of automobile sale and purchase for more than 50 years must be included in any consultation about law-cum-policy making about import of used cars.

“The government must not fall prey to any kind of pressure tactics being exerted by other quarters.”

Meanwhile, auto sector expert and analyst Muhammad Sabir Shaikh highlighted a “vast difference” between the current prices of vehicles and the prices before COVID-19. He noted that rising inflation, persistent rupee devaluation, and above all the “monopoly of auto assemblers” were key reasons behind the surge.

“Auto assemblers started localisation and reached 70% before the COVID-19, but they changed auto models and localisation fell to 30% currently in the country,” Shaikh maintained.

He said the commercial import of used cars would bring a healthy competition between old/used and new cars and give better opportunities to consumers to purchase vehicles as per their pocket. Locally-assembled cars are almost out of range of customers these days, according to Shaikh.

“People used to change their vehicles after a year or two, but skyrocketing prices of vehicles discouraged them and they are reluctant to purchase or change vehicles. No doubt, car sales have gained momentum during a period of a year because of the stable rupee and improved economic condition in the country.”

He said if commercial import of used cars benefits local customers, it must be promoted, but if it is not useful for customers, it should be stopped without any further delay.

Five-year used vehicles: TPB okays commercial import with 40pc extra duty

APMDA chairman Shahzad said the policy regarding the commercial import of used cars should be easy and approachable for every customer like online shopping without policy hindrances.

“Approximately over 35-year-old local auto industry is still unable to locally manufacture vehicles and reduce skyrocketing prices as middle class people are unable to purchase a car for a family as they call for a safe journey through a car,” he said.