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Importing Japanese cars

Zahid Awan


The writer is an entrepreneur and a senior politician.

A comfortable, safe and sturdy, fuel-efficient, and affordable car is the dream for every Pakistani. For those who are unable to afford locally-assembled cars, the import of reconditioned Japanese cars is a viable option. These durable and high-quality vehicles are the first choice for most Pakistanis.
But amendments in the auto policy have increasingly made it increasingly difficult and expensive to import Japanese vehicles. The local industry is no match for Japanese vehicles while the prices have been skyrocketing. This is why most Pakistanis prefer imported vehicles over locally-assembled ones.
The fiscal year 2019-20 has been rather disappointing for the auto industry as production slumped, delivering a huge blow to the market. Local assemblers are wrong to assume that imported vehicles harm the industry. While the import of Japanese cars is vital for the economy to meet the growing demand, the ban on imports has harmed Pakistanis the most.
The Pakistani community in Japan plays a leading role in exporting used reconditioned cars from there. This community sends foreign exchange back to Pakistan and also provides employment opportunities. From the expats in Japan, to the clearing agents at Karachi’s ports, showroom dealers, drivers, mechanics, and goods transporters, the import of vehicles provides employment to a wide range of people.
The government should allow the import of five-year-old hybrid and electric vehicles to tackle the economic and environmental challenges and diminishing foreign currency reserves. With the import of these vehicles, the oil bill can drop by eighty percent and this amount can be used for importing new vehicles. These vehicles are environment-friendly which can reduce pollution and get rid of smog issues.
The import of vehicles will generate revenue for the government in the form of duties, develop the economy, and improve the purchasing power of people while also providing durable cars. Local assemblers also import all items which also yields pressure on the national exchequer. The prices of cars have also skyrocketed due to rupee devaluation.
The trend of financing cars from banks has reduced due to the high interest rates. Previously, one would get a car after a half million deposit but now the high policy rate keeps them away. The government should also facilitate local assemblers to provide vehicles at affordable rates. There should be strong vigilance on imports as middlemen often delay the provision of vehicles for several months.
The government needs to take drastic steps to save the auto industry. Pakistan imported just 70,000 reconditioned vehicles in the past five years. The import duties are exorbitantly high even exceeding 300 percent on some occasions. This should be reduced the import of Japanese cars should be encouraged. The import and sale of reconditioned cars should also be given the status of an industry.
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