The APMDA proposes lowering import taxes on automobiles in Pakistan.

ByShehryar Makhdoom | Published date:

Since the imposition of limits on commercial vehicle imports in Pakistan, the market for imported automobiles has shrunk significantly, while the Pakistani government has implemented the import ban to promote the local car industry, the dealership owners believe it's working against overall growth.

H. M. Shehzad, the chairman of the All Pakistan Motor Dealers Association (APDMA), has written to the Ministry of Finance (MoF) recommending amendments to the new auto policy that will be implemented after the 2021-22 budget is presented.

H.M. Shehzad began his request in a letter to Dr. Abdul Hafeez Shaikh, Special Assistant to the Prime Minister (SAPM) on Finance, in which he highlighted how local automakers had been exploiting the market since the installation of restrictions on commercial vehicle imports in Pakistan.

Additionally, the newcomers have also participated in tactics like increasing prices and holding up on vehicle deliveries to consumers in order to "extort money" from them in the form of on-money.Changes concerning the tariff rates are also included in the proposal letter.

The letter emphasized that the automakers imported the automobiles for sale without maximizing their production abilities, resulting in delays in delivery and an additional increase in the production of the goods. It went on to state that the local automakers were also brazenly ignoring and defying government quality assurance regulations.

Additionally, the letter emphasized that due to the absence of competition in the market, the manufacturers have not become complacent. Based on that premise, the letter recommended that the government reconsider the restrictions imposed by SRO 52 (1) 2019 in order to help the automobile industry grow.

Although a large number of new car manufacturers have recently entered Pakistan with a good number of options, in particular in SUVs, the revision of import policy as part of the forthcoming automotive policy will undoubtedly allow for competition in Pakistan's market.

Additionally, other auto manufacturers will have to work even harder to maintain their slice of the market.