End to Import Ban Means CKD Units will Roll Out Soon
The import ban implemented by the incumbent govt on the 19th of May has finally been lifted after its completion of three months. The news was revealed by Finance Minister Miftah Ismail himself on Thursday the 19th of August.
The Finance Minister claims that the stability in the economy has allowed the government to ease the ban on the import of non-essential and luxury items. He further went on to state that the ban was put into place under the direction of the Internal Monetary Fund (IMF).
This means that the issue pertaining to the LCs of CKD kits at the port of Karachi will no longer exist, and automakers can continue to operate their assembling and manufacturing plants like before.
However, there’s a catch. The Finance Minister also stated that the government is considering increasing the taxes on imported cars so high that it will make buying them almost impossible.
He stated, "We will try to impose thrice the existing RDs ... the maximum amount of permissible RDs. In some sectors, the government’s RDs would be between 400-600 percent because the country did not have foreign exchange to spend on items such as Mercedes cars.”
While this is bad news for luxury imported cars as Pakistan is already quite behind on such cars compared to the world, it is the only option in such time to save our foreign reserves. These are tough times for the economy and therefore, the government and citizens will have to stand together to face them.
The good news, however, is that the automotive industry which includes our assembling plants, franchises, and spare part dealers, can take a breath of fresh air. Buyers can also get their CKD models.
Automakers in Pakistan should take advantage of such opportunities and consider launching more CKD units to fill the vacuum created by such measures. That however would take a long time as assembling CKD units requires the establishment of assembling plants.
All we can hope now is that the economy further stabilizes, our exchange reserve improves and we can once again be able to get our hands on some of the best cars that the world has.