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July 21, 2019

Car imports post 51 percent decline in FY19

Business

July 21, 2019

KARACHI: Motor vehicles import witnessed a significant decline of 51 percent during the fiscal year 2018/19, owing to regulatory measures and massive depreciation in the rupee value, government data revealed.

The imports of used and old motor cars declined to $222 million in the fiscal year 2018/19, compared with $456.18 million in the preceding fiscal year, according to the data released by the Pakistan Bureau of Statistics (PBS).

Market analysts attributed the decline to sharp depreciation in the rupee value, which fell around 34 percent during the fiscal year 2018/19.

Similarly, imposition of restrictions on Customs clearance of motor vehicles also played its part in the decline in imports.

The ministry of commerce on January 15, 2019 issued SRO 52(I)/2019, stating that all vehicles in new / used conditions to be imported under transfer of residence, personal baggage or under gift scheme would pay the duty and taxes from the foreign exchange arranged by Pakistani nationals themselves or local recipient supported by bank encashment certificate showing conversion of foreign remittance to local currency.

The ministry made it mandatory that the remittance for payment of duties and taxes would originate from the account of Pakistani national sending the vehicle from abroad and the remittance would either be received in the account of the Pakistani national sending the vehicle from abroad or, in case, his account is non-existent or inoperative, in the account of his family.

The import of used / old vehicles during the month of June 2019 posted massive decline of 83 percent to $5.5 million, compared with $33.77 million in the same month of the last year.

However, imports exhibited growth of 75 percent, compared with $3.14 million in May 2019.

Sources in Pakistan Customs said the clearance got momentum due to measures announced in the Budget 2019/20.

The overall imports of vehicles in Completely Built Unit (CBU) condition fell 45 percent to $381 million in 2018/19, compared with $696.49 million in the preceding fiscal year.

The imports of heavy motorcycles declined 26.6 percent to $4.2 million during the year under review, compared with $5.7 million in the preceding fiscal year.

Likewise, the imports of Completely Knock Down (CKD) condition vehicles declined 5.57 percent to $$1.24 billion in 2018/19, compared with $1.32 billion in the preceding fiscal year.

The restriction on imported motor vehicles and higher demand in locally-assembled vehicles increased the import of CKD motor vehicles.

The import of CKD motor cars increased 1.16 percent to $818 million during the year under review, compared with $809 million in the preceding fiscal year.

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