The Indus Motor Company's (IMC) Chief Executive Officer Pervez Ghias has urged the government to look into the matter regarding import orders of over 5000 cars just within 20 days against the total import of 4000 cars during the whole year. The Ministry of Commerce had issued an SRO on December 8, 2010 to increase the used cars' age limit from three to five years for import purpose under the personal baggage, gift and transfer of residence schemes.
However, after couple of weeks the Ministry reversed its decision during which amazingly orders for the import of over 5000 used cars were placed in this short period, he said. He was talking to a group of Lahore-based reporters during their visit to the company's manufacturing plant. It is pertinent to mention that the total number of used cars under the scheme restricted to 4000 during the whole year, he said.
The import orders for a significant number of used cars indicated that the scheme could have been misused by the commercial importers. How the return of over 5000 Pakistanis was possible just within 20-days following issuance of the SRO, he maintained.
Pervez Ghias was of the view that the government should announce a policy, particularly for the auto, which could benefit all the stakeholders, including the car manufacturers, consumers and vendors. Besides, there should be continuity in the policy which is imperative for the industry expansion, future models and above all to safeguard the interest of thousands of people directly or indirectly engaged in the industry, he added.
While defending the increase in the car prices, the IMC Chief Executive Officer said that input cost has been considerably increased that forced the car manufacturers for making marginal increase in the car prices. The US dollar showed an increase of 6.1 percent from Rs 80.86 of June 2009 to Rs 85.81 in September 2010, while Japanese yen jumped by 20 percent during the same period. Similarly, electricity and diesel registered 34 percent increase in prices while petrol posted 20 percent increase. The steel prices in the international market went up by 27 percent, copper 45 percent, lead 24 percent, aluminium 35 percent while polypropylene price has been moved up by 67 percent. Against the handsome increase in major inputs, the car prices were increased by five percent only during June 2009 to October 08, 2010, he maintained.
Pervez Ghias also pointed out that the car prices include 33 percent tax while CKD component constitutes 32 percent of the price in addition to 17 percent sales tax. The car manufacturers are presently either booking loss or making marginal profit out of their huge investment, he said.
He further said that the government should not impose higher duty on the high-tech parts that cannot be localised due to non-availability of technology and current low volume. Such an action will definitely result in further increase in car prices. He also strongly demanded of the government to continue ban on the import of used vehicles that are more than 3 years old while maintaining the current depreciation allowance.
During last few years, the cars' demand has been increased that forced the vendors to also increase their capacities to meet the growing demand, he said and added that the industry has made fresh investment amounting to Rs 50 billion besides creating new jobs.