KARACHI: The All Pakistan Auto Dealers Association has demanded of the government to withdraw SRO issued on January .Speaking at a press conference here on Thursday, All Pakistan Auto Dealers Association Chairman H M Shehzad said that with the issuance of the SRO and CGO the 2 per cent depreciation has been reduced to 1 per cent on imported cars.
This will have a negative impact on the import of used cars and it will lead to the closure of business of 2,000 auto dealers. Shahzad was accompanied by other members of the association at the press conference. Curbs on import of used cars disallow the public to enjoy the right to buy a car of their choice at reasonable rate, he said.
"The local assemblers have complete hegemony on the automobile market, they dictate prices and have little regard of quality," Shehzad said. "We demand the government to immediately withdraw SRO 25(1) 2009. Dealers of used cars, who generate revenue for Pakistan, are concerned about their livelihood and expect the people's government to act fast before it is too late."
He further stated that the government in budget 2008-09 had imposed a 20 per cent customs duty on imported cars and on August 27, 2008 further imposed a 50 per cent regulatory duty and with the current SRO and CGO the total duty comes to more than 250 per cent." It seems that once again the government is favouring local assemblers and allowing them to manipulate the auto market and mint money. In the last six months, Pak Suzuki has increased its prices four times, Toyota three times and Honda twice and the government is not taking notice of these acts,"
Shahzad said. Pakistan is the only country where local assemblers charge full amount in advance and deliver the car in six to 12 months. They are running their business on consumers' money, he added. He further stated that these assemblers were supposed to follow the deletion programme and would transfer technology within the agreed period, which they have not done so far. Pak Suzuki signed deletion programme in 1979-80 and was supposed to do transfer of technology within five years but so far only 25 to 30 per cent of the deletion programme has been implemented. Toyota and Honda signed the deletion program in 1989-90 but they have failed to do so and they are still 90 per cent dependent on importing CKD and SKD and since last 18 years they have not implemented the agreed program.
Criticising the local assemblers of holding the car market hostage to their own benfit, he pointed out that "Mehran is an obsolete model that went out of production in 1986 in Japan but Pak Suzuki is still rolling out the same model and selling it at highest price. In absence of any compatible option, consumers have no choice but to buy whatever local assemblers are offering and that too at whatever rate they desire." "With sole focus on improving profit margins assemblers are increasing prices despite a decline in demand without providing any benefit to buyers," said Shehzad. He said: "The Competition Commission of Pakistan and the Engineering Development Board are not fulfilling their duties and not doing accountability of local assemblers over price control and quality."
He said that with the import of used cars the public had a choice to buy a car at a reasonable rate. He further stated that the overseas Pakistanis were allowed this facility which was generating revenue. Since July 2005 till June 2008 125,000 cars were imported under TR, gift and baggage scheme which generated 60 billion rupees revenue for the government in import duty. Since this year's budget with the imposition of various duties and tightening used car import policy, the import has declined and only 5,000 cars have been imported and government revenue under import duty has declined to two billion rupees only. And now curtailing depreciation rate from 2 per cent to 1 per cent will further make it difficult to import used cars. Therefore the Association demands the government to withdraw its decision and take all stakeholders into confidence before taking any decision, said Shehzad.