LAHORE: Local auto industry has demanded of the government to take appropriate measures, to support the local auto industry and restore investors’ confidence.

“Locally, as many as 13 brands are cumulatively producing 40 plus models with a combined capacity to produce 500,000 units per annum,” said Abdul Rehman Aizaz, Chairman, Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM).

However, he added, increase in the imports of used cars is creating serious issues for the sustainability of the local auto industry, which has invested about $2.5bn and contributed about Rs400bn in taxes in FY2022 alone.

According to him, this surge in the imports of used cars has continued to nullify the magnitude and potential of the local auto industry. “The local auto industry has been responsible for about Rs250 billion local purchase values in FY 2022, while it creates about 2.5 million direct and indirect jobs within the country.

Chairman PAAPAM said, “Currently, the import of 3000 used cars per month on average has been rendering the local industry’s growth in negative territory (to about 40%).” He said, “This heavy influx of used cars in the country will ultimately force local businesses towards closure, which will result in unemployment and economic loss (in terms of taxes). It also hurts the country’s USD reserve (economic loss of dollars) which in turn depreciates the value of PKR.”

It is pertinent to mention here that in the last nine months of the Financial Year 2023-24, a total of 27,852 units were imported, against 3,924 units imported during the same period in FY 2022-23, which is a 610% increase.

Copyright Business Recorder, 2024