News Paper: Business Recorder
ISLAMABAD (July 19 2010): The Economic Coordination Committee (ECC) of the cabinet, which is scheduled to meet on Tuesday, is to decide about commercial import of used cars, well-informed sources in Industries Ministry told Business Recorder. The sources said, Ministry of Industries and its attached department Engineering Development Board (EDB) have already sent the summary to the ECC.
Ministry of Finance, Federal Board of Revenue (FBR) and Commerce Ministry are opposing commercial import of used cars. When contacted one of the representatives of local car manufacturers told this scribe that high par prices in Pakistan are a myth or misstatement. The question, he added, is whether cars are in demand by the common Pakistani as total demand for cars, light commercial vehicles, trucks and buses is approximately 145,000 vehicles for 180,000,000 Pakistanis-only 0.08 percent of total Pakistan's population.
He was of the view that poor Pakistanis need employment not used cars. Local manufacturers are providing approximately 1.4 million jobs both directly and indirectly.
It is a common phenomenon that all developed countries protect their industries either through tariff barriers or non-tariff barriers. In India used cars are allowed to be imported up to the age of three years, having right hand drive with speedometer in KM/H, pre-shipment certificate for conformance with India Motor Vehicle Act, confirmation to original homologation certificate issued at registration and the importer has to obtain approval from the Indian testing agency and the person is living abroad for more than one year with driving licence.
Similar are the conditions for used car imports in Thailand. Moreover 108 percent duty in India and 193 percent duty in Thailand for import of used vehicles is applicable. Both countries are restricting commercial import of junk, scrapped and used vehicles whereas in Pakistan there are no non-tariff barriers.
Local car manufacturers contribute 2 percent of total FBR revenue, which is about Rs 65 billion annually. On the other hand if the government allows commercial import of used cars with the same numbers it will contribute only Rs 35 billion and a loss of 1,608 million dollars of foreign exchange for the import of scrapped vehicles.
Comparison shows that Pakistani manufacturers are selling quality vehicles at competitive prices with India and Thailand. Toyota Altas is priced in Thailand at $28,857: India at $26,929 and Pakistan at $20,882. Suzuki Swift in Thailand at $19,121: India at $10,630 and Pakistan at $12,281. Honda Civic MT in Thailand at $16,192; India $at 30,450 and Pakistan at $18,955: Honda Citi MT in Thailand at $11,467: India at 21,109 and Pakistan $14,626.
Except for Mehran which is an obsolete model and no more in production since 1986 in Japan (P-33 of CCOP Report 2009) all manufacturers are manufacturing state of the art and quality vehicles. Moreover, Toyota is selling in Pakistan at a lower price relative to Asian countries like India and Thailand. Both the countries are technologically more developed than Pakistan.
-www.brecorder.com
Ministry of Finance, Federal Board of Revenue (FBR) and Commerce Ministry are opposing commercial import of used cars. When contacted one of the representatives of local car manufacturers told this scribe that high par prices in Pakistan are a myth or misstatement. The question, he added, is whether cars are in demand by the common Pakistani as total demand for cars, light commercial vehicles, trucks and buses is approximately 145,000 vehicles for 180,000,000 Pakistanis-only 0.08 percent of total Pakistan's population.
He was of the view that poor Pakistanis need employment not used cars. Local manufacturers are providing approximately 1.4 million jobs both directly and indirectly.
It is a common phenomenon that all developed countries protect their industries either through tariff barriers or non-tariff barriers. In India used cars are allowed to be imported up to the age of three years, having right hand drive with speedometer in KM/H, pre-shipment certificate for conformance with India Motor Vehicle Act, confirmation to original homologation certificate issued at registration and the importer has to obtain approval from the Indian testing agency and the person is living abroad for more than one year with driving licence.
Similar are the conditions for used car imports in Thailand. Moreover 108 percent duty in India and 193 percent duty in Thailand for import of used vehicles is applicable. Both countries are restricting commercial import of junk, scrapped and used vehicles whereas in Pakistan there are no non-tariff barriers.
Local car manufacturers contribute 2 percent of total FBR revenue, which is about Rs 65 billion annually. On the other hand if the government allows commercial import of used cars with the same numbers it will contribute only Rs 35 billion and a loss of 1,608 million dollars of foreign exchange for the import of scrapped vehicles.
Comparison shows that Pakistani manufacturers are selling quality vehicles at competitive prices with India and Thailand. Toyota Altas is priced in Thailand at $28,857: India at $26,929 and Pakistan at $20,882. Suzuki Swift in Thailand at $19,121: India at $10,630 and Pakistan at $12,281. Honda Civic MT in Thailand at $16,192; India $at 30,450 and Pakistan at $18,955: Honda Citi MT in Thailand at $11,467: India at 21,109 and Pakistan $14,626.
Except for Mehran which is an obsolete model and no more in production since 1986 in Japan (P-33 of CCOP Report 2009) all manufacturers are manufacturing state of the art and quality vehicles. Moreover, Toyota is selling in Pakistan at a lower price relative to Asian countries like India and Thailand. Both the countries are technologically more developed than Pakistan.
-www.brecorder.com
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