Despite influence by stakeholders, the government last month had allowed import of used cars with an aim to normalize the prices and facilitate the common man at a time when the car prices have gone beyond his reach.
"We had to strike a balance between imports and local car production to normalize the prices and ensure that in the end the consumer gets relief," an official of the Ministry of Commerce told APP here on Wednesday.
He said that the used car imports have affected the car prices and cited the example of the VITZ car, price of which he said has reduced by about 1.5 lack.
It may be recalled that the Economic Coordination Committee (ECC) had given a go-ahead signal to import of up to five years' old cars on December 8 from earlier importing three years old cars.
The decision to increase the model age-limit for the import of used cars up to five years was taken after issuing a number of warnings to the car assemblers in the country to slash prices of their made cars with an aim to facilitate the common man.
However, the ministry of commerce on December 30 suspended its earlier notification announced on December 8, which said that cars not older than five years could be imported under the Personal Baggage, Gift and Transfer of Residence Scheme.
The decision was later reversed by the ministry which then allowed the import of such cars, the official said.
Apparently the import of used cars was not liked by the car manufacturers who claimed that the decision would result in less production.
The official of the ministry of commerce was of the view that car manufactures of the country had actually resorted to monopoly and were involved in increasing car prices at their own adding that `the value of a car is even less than to its worth.'
He was of the view that the government does have other methods to normalize the car prices, saying that encouraging new investments in the car manufacturing sector and allowing import of used cars could help normalize the prices.
It is pertinent to note that the production of cars and jeeps witnessed an increase of 8.52 per cent during Jan 2011 as compared to the production of the same month of last year.
The production of cars and jeeps has increased by 15.10 per cent during the first seven months of the current year.
As many as 75537 cars and jeeps were produced during July-January (2010-11) against the production of 65626 cars and jeeps during last year, the Federal Bureau of Statistic reported.