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Car import registers 148% growth amid Covid-19 pandemic

Car import registers 148% growth amid Covid-19 pandemic

ISLAMABAD: Import of motor vehicles in completely built-up unit (CBU) condition registered phenomenal growth of 148 percent in April 2020 despite restrictions to foreign trade owing to lockdown for preventing coronavirus pandemic.

According to data released by Pakistan Bureau of Statistics (PBS) the import of motor vehicles in CBU condition increased to $10.77 million in April 2020 as compared with $4.34 million in the same month of last year.

Sources said that due to coronavirus pandemic many overseas Pakistanis opted to return homeland and they brought household along with them.

It is interesting to note than due to the pandemic most of the imported goods registered massive decline in the month of April 2020 due to restrictions imposed on the foreign trade.

Whereas, the lockdown imposed in the country not a single locally manufactured car was sold during April 2020.

The commercial import of motor car is not allowed in Pakistan. However, overseas Pakistanis are allowed to bring motor car under three different ways including personal baggage, transfer of residence and gift schemes.

The import of CBU motor vehicles registered 64.58 percent decline to $75.57 million during first ten months (July – April) 2019/2020 as compared with $23.37 million in the corresponding period of the last fiscal year.

The overall decline in import of motor vehicles can be attributed to measures taken by the government to discourage misuse of the facility which is only allowed to overseas Pakistanis.

Last fiscal year the government brought changes to these schemes and customs clearance of imported cars under these schemes only through payment made out of foreign exchange, which should be verified by banking system.

Recently, the ministry of commerce through a SRO issued on December 30, 2019 amended in payment system for clearance of imported cars under which local resource could be utilized in case of shortage of payment due to enhancement of exchange rate fluctuation or enhancement in duty rate etc.

The import of motor vehicles in completely knocked down (CKD) condition registered 40 percent decline to $405.6 million during first ten months of current fiscal year as compared with $678.76 million in the corresponding period of the last fiscal year.

Industry sources said that the decline in motor vehicles in CKD condition was due imposition of duty and taxes in the last budget, which resulted in hike in prices of locally manufactured cars.

Besides, slowdown in economy in pre-Covid and later imposition of lockdown to prevent coronavirus spread also discourage the sales of locally manufactured motor cars.