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KARACHI: Over 6,000 used cars have been imported during the last financial year, giving a significant blow to the already beleaguered local auto industry.

According to the statistics, over 6,000 used cars were imported in the financial year 2022-23, with 1,800 units making their way into the country from May to June this year alone.

Industry experts have expressed deep concern over the impact of this surge in used cars’ import on the local auto sector.

Import of used cars crippling local auto industry: IMC chief

Zafar Ali, a former general manager at Hino and an automotive professional lamented the situation, saying, “This is very unfortunate that total used cars import now exceed the production of some original equipment manufacturers (OEMs), which is beyond comprehension, especially in the context of import control measures.”

The continued devaluation of the Pakistani rupee had a cascading effect on product pricing and the overall profitability of car manufacturers, leading to further price hikes in locally manufactured cars.

The challenges faced by Pakistan’s automobile sector have been mounting, with weak demand, rapid price escalation, expensive auto financing, and deteriorating economic conditions contributing to its woes.

Additionally, the OEMs continue to grapple with Letter of Credit (LC) restrictions, further straining their operations.

In the fourth quarter of the Financial Year 2023, major players in the auto sector, including Honda Atlas Cars Ltd, Indus Motor Company, and Pak Suzuki Motor Company Ltd, saw a staggering 57% decline in sales compared to the previous year.

This decline extended to a 38% drop in sales on a quarter-on-quarter basis, painting a grim picture of the industry’s health.

Honda Cars witnessed a 57% year-on-year decline in sales, while Indus Motors and Pak Suzuki faced a 58% and 57% drop, respectively. These figures underscore the severity of the challenges faced by key OEMs in the market.

Honda’s market share currently stands at approximately 10%, with Indus Motor holding around 19% of the market. Suzuki Motors dominates with a market share of about 42%, while Kia and Hyundai have collectively gained a 6% market share.

Zafar Ali said, “Car prices are primarily influenced by two factors: the depreciation of the rupee and fluctuations in international steel prices.”

He also highlighted that the influx of used cars import is undermining the progress made in terms of localizing auto parts, which had reached up to 71%.

As the Pakistani auto industry grapples with these challenges, the surge in used cars import adds another layer of complexity to the sector’s woes.

Copyright Business Recorder, 2023

Comments

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NXT Oct 07, 2023 09:01am
Obviously the local manufacturers are not giving what customers want!
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Nabeel Oct 07, 2023 10:22am
When will guys cover how the local industry is ripping off consumers by importing CKD kits and assembling causing massive drain on FX reserves? Also launching outdated old models with barely any features/safety at insane prices? These are reasons for their failures not imported cars. So stop this paid journalism and shame on you for representing the mafia.
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Altaf Chughtai Oct 07, 2023 01:06pm
This article seems to be paid. 1st all used cars even if they are used and 3 years old, cost more than the local BRAND NEW CAR. even then ppl like to buy them. Why ? Because u r not giving them the latest technology , shape, features, options in the cars. Why don't u say that we will give u same thing with the same cost. They should kill them self if only 6000 OLD and USED cast give them HARD TIME. SHAME on them. BAYGHARAT
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Cool boy Oct 07, 2023 04:22pm
Car assembler mafia comes to defend imported cars via assembly route and complains why people are importing cheaper car themselves
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Mian Shoaib Oct 07, 2023 04:51pm
@Altaf Chughtai, totally agreed with you
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Mohsin Malik Oct 07, 2023 05:13pm
Surely he's sympathetic being in the same boat. What localisation? Plastic parts. Seats and carpets. LOLs. They are here since 80s not a single company is making engines or transmission. They are just assemblers. Why should buyer suffer, even for same price he gets better features, safety and economy from used car. Our big 3 instead of being crybaby should beltup lower their profit and face competition.
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Janbaaz Oct 07, 2023 08:10pm
I want a 660cc car with the best-in-class features. Hence, I'd prefer an imported car over the so-called locally assembled piece of trash. Take, for example the Suzuki Alto. Put the safety features on one side. The rear seats on the imported Alto are equipped with rear head rests whereas the locally assembled variant doesn't. It's not a comfort feature but a safety feature to protect neck injury in case of sudden braking. And the base variant locally assembled VX variant doesn't even come with rear seat belts and air bags and an AC, yet one's ready to dole out 2.5 million rs for this piece of junk. The air and oil filters are imported and are extremely costly to use. So what local manufacturing are we talking about? Please ban these local assemblers once and for all.
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Dr Habib Oct 07, 2023 08:53pm
Local cars lack quality and very expensive genuine parts.. E g Toyota in Pesh lacks quality technical staff
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Shabnam Oct 07, 2023 09:31pm
The auto industry should decrease the prices and rise the quality, all the world has discontinued manual transmission, in Pakistan compared to India, our prices are so high that no middle class man can afford a luxury car ,5 years back we the middle class people can buy Honda civic at 25 lac ,now the prices are 4 to 5 times high.. The auto industry didn't value their middle class customer. The auto industry is not working on hybrid or EV cars as the petrol prices are so high. The cost of EV cars and hybrid cars should be in approach of the lay man, compared to india they are nationalists they give low cost vehicles to their customers. The auto industry made lots of money, now their turn to give back to community as Pakistan is losing its youth for better lifestyle, they all are leaving because they can't afford any necessity, luxury is a dream for them. Thanks hope i expressed well.
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یاسر Oct 08, 2023 06:17am
Thank you for sharing your thoughts with MAFIA paid article. Why would someone buy a fkdup Wagnor in 40 Lak budget when he can get a sophisticated JDM car in same price range like VITZ. There's no comparison between outdated local PEEPAs and well engineered and tested vehicles.
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Mateen Oct 09, 2023 06:17am
Good
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