The Government Decision to Curb Used Car Imports

The assemblers of 660-1000cc cars are lucky that the market is now open wide to take advantage of the current decline in used car imports. From 2018 to 2018, the government's decision to curb used car imports has plunged from 518 per cent of car imports to $ 222 million between 2018 and 1918. Used car import share in this category is over 90pc.

Pak Suzuki Motor Company

Pak Suzuki Motor Company (PSMC), which owns a 54% stake in the domestic automobile market, has suffered no damage so far with 660-1000cc used car imports. Iconic Suzuki Mehran (800cc) sailed smoothly with imported 660cc used car, such as Daihatsu Mira, Daihatsu Momb, Nissan Day, Nissan Moko, Suzuki Alto, Suzuki Hustler, Daihatsu, Suzuki and Nissan. The 30-year journey of two Mehran models ended in November 2018 and April 2019.

Due to its low maintenance and high resale value, Mehran was able to maintain its position as the best option for first time buyers. But I can not be sure how the car will be competitive in price. It did not exist anywhere else. PSMC has not bothered to change the entire model for the past 30 years, because the car has already had solid demand.

Analysts are expecting only local builders to raise auto prices several times a year because of changes in the exchange rate due to policy changes. The company has not been checked by the ministry concerned because it only introduced changes in appearance. Even with localization of 70pc or more, prices have been increased frequently due to exchange rate fluctuations.

Over the past 30 years, Japan has had to ideally transfer technology for future regional conferences in Pakistan, but it has not. As Kia Motors, Hyundai Motors and some Chinese automobile assembly companies entered the Pakistan market, PSMC released Alto (660cc) instead of Mehran (800cc), maintaining consumer interest in imported 660cc used cars.

Used car imports are already approaching the end

As the only small carmaker to date, PSMC enjoys a dominant position in the 660cc segment (Alto) and the 1,000cc segment (Cultus and WagonR). PSMC has already introduced Cultus automatically. We plan to release an automatic wagon by the end of this year. According to the Pakistan Automobile Manufacturers Association, the sales of Cultus and WagonR increased by 22,763 and 32,614, respectively, from 20,483 and 29,206 in 2017-18 and 2018-19, respectively.

Competition will intensify after Kia Motors and Chinese players have entered this sector, assuming anonymity, said a new participant in the Greenfield division. The compact car segment is expected to grow because its revenue has virtually ceased. New entrants also said that many used car buyers will expand this segment when they choose a new regional model, he said.

I think that entry into the market will be driven by new products brought in by new entrants, and prices have gone up for all manufacturers, competition is up to choice and choice," he added. He said that reducing the import of used cars would not prevent competition from new entrants. New entrants will ensure a strong dealer network, spare parts availability, technical services and attractive guarantees, which are not provided by used car importers, he said.

Some analysts fear that used car import

Some analysts fear that used car import controls will strengthen the monopoly power of local assemblers, who raise prices several times each year due to exchange rate movements. Officials said new entrants would actually break existing monopolies or oligopolies. New participants are from Korea and China. Competition gives existing players control. Checking and balancing with used car imports is no longer necessary.

He said new tax measures such as Federal Consumption Tax (FED) and additional tariffs are causing uncertainty and instability. The FED should be removed to immediately stimulate the market," he said. Consumers have welcomed commercial vehicles from Chinese builders, but cars have not attracted buyers so far. China FAW is still struggling because sales figures are not attractive.

Analysts in the automotive sector think that the local assembled Suzuki Alto (660cc) may not match the quality of the imported model. Imported used cars are first taken for dental work and painting work when importing from the country. Market sources say local auto mechanics also manipulate odometer. They add that importers can benefit from some work because the imported car damaged the body.

Regal Automobile Industries

Regal Automobile Industries Ltd plans to launch the Chinese car Prince Pearl (800cc) in September this year. In accordance with the technical cooperation agreement with the Chinese manufacturer, the local assembly of the 800cc vehicle at the Lahore plant will start in the month. KIA is also bringing together locally assembled Picanto (1,000cc) in the coming months. Used car dealers are perplexed as the government's decision to reduce imports turns out to be the last nail in their coffin.

The government has actually shut down options and options for consumers by increasing used car imports," said H.M., president of all Pakistani car dealer associations. Shahzad said. About 95,000 cars belonging to the 660-1,000 cc category, about 34,000 used cars, landed in Pakistan from July 2018 to January 2019, he said. However, from January 15, only 1,800 used cars arrived in Pakistan.

Importers kept new rules and regulations and eliminated about 900 cars. The price of the Suzuki Alto (660cc) will be invisible to the Rs 1.36-1.38 million on August 1 (ie immediately after launch), he said. "This has been the record price rise by PSMC in small cars so far," he added. The government is trying to control foreign exchange by restricting car imports.

He also said local assembly companies should spend $ 818 million to import semi-finished products in 2018-19. He said tax revenues would be possible as second-hand car imports declined. He claimed that the government collected about Rs 100 billion in taxes and duties from 2017 to 1818 on imports of used cars.

Shahzad said

The government should allow commercial imports of used cars if it thinks that baggage, residence transfer and gift plans are being misused. Another way is to import a five-year-old car instead of a three-year-old car. "Under the new policy introduced in January, it is not possible for a used car dealer to import a third-generation vehicle.

The government announced that it needs to send a remittance certificate from the foreign currency of the Pakistani nation or the local recipient for the import under the various schemes for new / used car. Local currency. Remittance of customs duties and taxes must be based on the fact that a Pakistani national sent a vehicle abroad.
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