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PAMADA Used Cars Imports Cost Over US 2 Billion Annually to Pakistan Economy

USED CARS’ IMPORTS COST OVER US$ 2 BILLION ANNUALLY TO PAKISTAN’S ECONOMY

Pakistan Automobile Manufacturers, Assemblers, Dealers’ Association (PAMADA) would like to extend their sincere gratitude to Government of Pakistan for taking strong decisive action against the blatant abuse of ‘Used Car Import Policy for Overseas Pakistanis’ by issuing SRO 52(1) 2019. The amended import law is proving to be effective in stopping this illegal trade and draining of precious foreign exchange from country’s economy. Reduction in illegal imports of used cars shall also help local auto industry, auto parts makers and after sales service industry who contribute directly to the country’s economic growth and GDP.

Crimes Committed by Used Cars’ Importers

The lobby behind used cars’ imports, particularly CEAFP (Cars’ Exporters’ Association for Pakistan) and APMDA (All Pakistan Motor Dealers’ Association), has been blatantly abusing Used Car Import Policy for Overseas Pakistanis and has cost Pakistan’s economy over US$ 2 billion worth of foreign exchange every year. By engaging in illegal import business of used vehicles, these parties were also allegedly committing following crimes and violating many local/international laws:

 

PAMADA Used Cars Imports Cost Over US 2 Billion Annually to Pakistan Economy

1. Directly violating Pakistan’s Import Policy by undertaking commercial imports

2. Violating BankingATrade/FATF laws by remitting foreign exchange through undocumented channels i.e. Hundi/Hawala

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3. Committing miss-declaration and identity frauds by purchasing fake passports and identities

4. Engaging in commercial selling without paying any taxes like GST/Income Tax

5. Undermining Pakistan’s Customs’ Laws and Auto Development Policy

Used Cars’ Importers Deceiving the Government and Policy Makers

The lobby behind used cars’ imports, particularly CEAFP, has been wilfully deceiving the policy makers and the government functionaries by disguising itself as exporters, when in reality it is nothing more than an importer. By engaging in such deceptive practices, used car importers try to undermine and influence the policy/budget making process. PAMADA consider it as their national duty to call out CEAFP/used cars’ importers on their criminal conduct and make policy makers wary of their nefarious intent. Illegal commercial imports cannot be equated with status of an industry and it will be very naive of anyone who thinks in this manner.

Used Cars’ Importers Working Against Pakistan’s National Interest

By engaging in illegal trade, used cars’ importers have been harming country’s economy by increasing the import bill and funnelling billions of dollars in foreign exchange out of Pakistan through illegal channels. At a time when country’s economy is struggling with foreign exchange reserves and high import bill, these importers want to push economy in further debt for their selfish gains, which is deplorable and criminal.

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Undermining Positive Outcomes of Auto Development Policy

The Auto Policy has resulted in fruitful investments totalling over US$ 2 billion and has paved the way for 15 new entrants that have set up sizeable manufacturing plants in Pakistan. This has led to the generation of thousands of jobs and will eventually result in the saving of billions of dollars in foreign exchange. These economic returns will trickle down through communities and to the labour forces employed at these factories and will also benefit all the parts’ suppliers and service providers who are associated throughout this value chain.

Dependency on Imports Cause Unemployment, Poverty, and Unrest in Our Country

Used cars’ imports fail to yield any such widespread economic benefit. Allowing used cars’ imports in any form should be considered a criminal offence on a national level, as it will only continue to threaten Pakistan’s industrial sector causing greater levels of unemployment, poverty and unrest, while increasing Pakistan’s crippling dependency on imports.

Car Re-Exporting Zone – Nothing But a Deceptive Fagade

The Car Re-exporting Zone is also deceiving policymakers with the eventual goal of transforming Pakistan into a scrap yard. This not only adversely impacts the local vehicle manufacturing industry but also harms many critical and vulnerable small businesses such as the auto parts industry, which form the backbone of Pakistan’s engineering sector.

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Contribution of Local Auto Industry Towards Economy

Local auto industry, including OEMs, Auto Parts’ Makers and Authorised Dealers providing after sales service, directly employ over 4 million people-the 4 million households whose well-being is directly linked to the well-being of the industry. Besides contributing over 4% to country’s GDP, the local industry contributes in many ways towards making Pakistan a stronger self-reliant country. Industry not only brings investments and technology, it also takes pride in training the young work force of this country and imparts technical skills, which it considers as its invaluable contribution.

PAMADA IS A REPRESENTATIVE BODY OF OVER 120 AUTHORISED DEALERS OF AUTOMOBILE MANUFACTURERS OF PAKISTAN WHO OUR ENGAGED IN PROVIDING QUALITY AFTER SALES SERVICE AND SPARE PARTS TO THEIR CUSTOMERS THROUGHOUT PAKISTAN.

THANK YOU TO THE GOVERNMENT OF PAKISTAN FOR SUPPORTING THE BAN ON ILLEGAL CAR IMPORTS BILL SRO 52(1)2019. THE GOVERNMENT WILL CONTINUE TO DO GOOD FOR THE COUNTRY WITHOUT ANY INFLUENCE AND PRESSURE.

PAKISTAN AUTOMOBILE MANUFACTURERS, ASSEMBLERS, DEALERS’ ASSOCIATION (PAMADA)

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