ISLAMABAD — Sigh of relief for Pakistan’s local auto industry, as government announced low-quality used imported cars, while imposing a staggering 40pc tariff on commercial imports of used vehicles starting next month.
Consumers, who are paying 3million for cars like Alto, are unlikely to see any relief at the pumps, as sky-high taxes already keep car prices among the highest in the region. Its for local auto giants who said production costs are being driven so high that trading could become more profitable than manufacturing.
Senate committee meeting members announced the deicsion and under the new rules, commercial imports of used cars up to five years old will be allowed from September, with all age and quality restrictions expected to be lifted by next July, but not before buyers face the punishing new tariff.
Officials say 40% levy is just the start. Over the next four years, the tariff will gradually drop to zero, eventually allowing imports of older vehicles. Yet environmental standards will be strictly enforced, ensuring that only “clean” vehicles make it to Pakistani roads.
With car prices unlikely to drop anytime soon, Pakistanis may have to rethink their driving plans as the country steers into an uncertain auto market.
Local Industry insiders said they are already operating at less than 50% capacity, facing further pressure as used cars take up 25% of the market and taxes now account for nearly 60% of a car’s price. With low per capita income and limited financing, Pakistani-made cars may soon be unaffordable for most citizens.
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