LAHORE: The local automotive industry has urged the government to implement appropriate measures aimed at bolstering support for local manufacturers and reinstating investors’ confidence.
Abdul Rehman Aizaz, Chairman of the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM), highlighted, “Currently, 13 brands collectively produce over 40 models, with a combined annual capacity of 500,000 units.”
However, he expressed concern over the escalating import of used cars, emphasizing its detrimental impact on the sustainability of the local auto sector, which has invested approximately $2.5 billion and contributed about Rs400 billion in taxes during FY2022 alone.
Aizaz underscored the ongoing surge in used car imports as a significant impediment to the local industry’s growth, nullifying its potential and leading to adverse effects such as the loss of around Rs250 billion in local purchase values and the creation of approximately 2.5 million direct and indirect jobs within the country.
He warned that the average import of 3,000 used cars per month was pushing the local industry into negative growth territory, with a downturn of about 40%. Aizaz cautioned that if left unchecked, this influx of used cars could precipitate the closure of local businesses, resulting in widespread unemployment, economic losses in terms of taxes, and a depletion of the country’s USD reserves, ultimately leading to the depreciation of the PKR.
Highlighting the severity of the situation, it was revealed that during the first nine months of the Financial Year 2023-24, a total of 27,852 units were imported, marking a staggering 610% increase compared to the 3,924 units imported during the same period in FY 2022-23.
