Tuesday, April 16, 2024

Import bill of Auto surges by 194pc in July-December

In the first half of the current fiscal year (1HFY21), the turnaround in demand and increasing imports of brand new cars, sports utility vehicles (SUVs) and pickups by new entrants in the automotive sector pushed the total import bill of fully constructed (CBU) vehicles from $32 million in the same timeframe last year by 193.7 percent to $94 million.

A car assembler said the government had given quotas to new entrants to bring in brand-new fully built-up unit (CBU) vehicles and other vehicles.

Due to the government’s decision to introduce different new rules and regulations to curb used car imports in order to promote the selling of locally manufactured cars and to enable new entrants in the automotive sector to meet their sales goals in a market-friendly setting, total imports of these vehicles in FY20 had fallen from 55pc to $99m.

After consumers returned to the market due to a drop in interest rates, demand for cars and SUVs soared. Another reason for the increase in auto demand, along with better economic indicators, is the lifting of vehicles from cash crop producers who have higher commodity prices and now have enough liquidity.

According to the Chairman of the All Pakistan Motor Dealers Association (APMDA), H.M., the estimates of the Pakistan Bureau of Statistics (PBS) cover CBU imports of both, used and new cars in which 660-1,000cc hold a more than 90 percent share.

“After the introduction of imported SUVs and pickups in larger numbers, the high value of brand new imported cars and SUVs must have had a big impact on the PBS figures of CBU imports,” he said.

He reported that during July-Dec 2020, 10,000-12,000 used vehicles, SUVs, pickups etc. were imported, which is much lower as compared to total imports of 18,500 units in FY20, 55,000 units in FY19 and 82,500 units in FY20.

Car assemblers, on the other hand, said that due to the Covid-19 pandemic, they faced serious supply chain problems due to congestion at international ports.

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