New vehicles import hits all-time high in FY21

Pakistan has witnessed record foreign exchange spending on highestever arrival of new automobiles in 2020-21 on strong demand followed by revival of used vehicles imports. The country imported record 10,513 units of new cars, jeeps, vans, pickups, two-wheelers and buses in FY21 compared to 1,680 units in FY20, 3,716 units in FY19 and 7,424 units in FY18.

Besides, for the first time, 390 new electric vehicles (EVs) and 19 used EVs were also imported in FY21. Entry of new players from Korea and China in the local assembly of new models coupled with low interest rates have injected new life in the auto sector while used imported vehicles and locally assembled vehicles by old players also enjoy robust demand.

In FY21, new cars and jeeps held the highest share with 10,157 units compared to just 893 units in FY20, 2,427 in FY19 and 3,758 units in FY18. In overall automobile imports of around $2 billion, the import bill of completely and semi-knocked down (CKD/SKD) kits for cars, bikes and heavy vehicles stood at record $1.6bn in FY21 as compared to $727m in FY20 while $386m was spent for import of used and new vehicles in FY21 as compared to $219m in FY20.

In the first two months of the current financial year (2MFY22), import of CKD/SKD kits for local assembly of all vehicles swelled by 214pc to $369m from $117m in the same period last fiscal year, while import of completely built up units (CBU) posted a growth of 118pc to $103m from $47m in 2MFY22.

In personal baggage scheme, import of used cars, jeeps, vans and pickups swelled to 29,276 units in FY21 from 16,455 units in FY20 though it was 49,990 units in FY19 and 73,640 units in FY18, said All-Pakistan Motor Dealers

Association (APMDA) Chairman H.M. Shahzad.

He said majority of used vehicles had arrived under personal baggage scheme and only 946 motorcycles/scooters had landed under transfer of residence scheme from FY18 to FY21. Asked why import of used cars and jeeps recharged in FY21 after facing a lacklustre trend in FY20, Mr Shahzad said importers took time to understand the government decision of curbing used car imports and they resumed imports especially of used cars up to 1,000cc in FY21 as compared to FY20.

The government in import policy order 2017 had made it mandatory that all the vehicles (new and used) to be imported under various schemes - the duty shall be paid out of the foreign exchange arranged by Pakistani nationals themselves or local recipient supported by bank encashment certificate showing conversion of foreign remittance to local currency.