Ease restrictions on used cars’ import, urges APMDA

All three local car assemblers have always been quick in raising prices on any depreciation of the rupee against the dollar and the yen. PHOTO: FILE

KARACHI: All Pakistan Motor Dealers Association (APMDA) Chairman H M Shahzad has urged the government to ease restrictions on the import of used cars in to the country.

In a letter written to Prime Minister Nawaz Sharif, he said that local car assemblers are not fully passing on the benefits of rupee appreciation to the customers.

All three local car assemblers have always been quick in raising prices on any depreciation of the rupee against the dollar and the yen. However, it seems that the rupee appreciation against the dollar is of no result when it comes to fixation of car prices.

If the rupee value is the determining factor, car prices should have been reduced by 6%, he claimed. In actual, all the three companies have reduced their prices by just 0.5% to 3%.

Take, for example, the recent price reduction by Pak Suzuki. Suzuki Mehran prices have been reduced by Rs5,000 which actually should have been reduced by Rs36,000.

Furthermore, there is no consistency in the way prices have been reduced. The price of Liana and Swift is almost the same but the former’s has been reduced Rs100,000, while the latter by only Rs20,000. All this shows that they have just carried out an exercise in marketing rationalisation and has no bearing on the rupee value.

Same is the case with Indus Motor – the makers of Toyota Corolla – and Honda Atlas cars who have reduced the prices from Rs15,000 to Rs70,000. Also, the higher reduction is on slow moving products. It may also be that this reduction is inclusive of taxes that would also put a dent in the government’s earnings in the form of taxes.

It may be remembered that these companies have been raising their prices three to five times in a year, mentioning rupee devaluation as a reason. The prices of cars have almost doubled in the last four to five years. If they are at all serious, they should at least have reversed the prices they increased in 2013.

We are of the opinion that no matter what happens, these car companies are not going to give any relief to the consumers as they have a monopoly in the business, the letter said.

The only way to bring some sanity in their dealings is through competition in the form of used cars. Unfortunately, at present they do not pose any threat to them as only three-year-old cars are allowed to be brought in the country — that too with a depreciation allowance of only 24% which has practically rendered this import unfeasible