KARACHI, Nov 29: Car industry expects improvement in the sale of locally assembled cars in the next three to four months following government decision of reducing the age limit of used cars to three years from five.

As per an ECC decision last week, delivery of such imported cars whose orders had already been placed would be facilitated from Dec 15.

Industry people are of the view that the market still has 5,000-10,000 unsold units of used cars and other vehicles.

Taking the average arrival of 4,000 units every month from July-October 2012, they said, around 5,000-10,000 used cars and other vehicles are expected to arrive in November and December 2012.

Sources said that total import of used cars and other vehicles during July-December 2012 may reach 30,000 units in which share of 660cc cars is estimated at 20,000 units.

They said if July-October 2012 figures of around 20,000 cars and other vehicles are taken into consideration, the share of 660cc cars is over 12,000 units.

Industry officials are of the view that the local industry would see a positive impact of the reduction in used cars age limit after general elections in March-April 2013.

They said that December often remains a lean period for cars sale as people start buying new cars from January onwards due to changes in models.

Sale of locally produced cars fell by 32 per cent in July-October 2012 as compared to the same period last year.

Pakistan Automobile Manufacturers Authorised Dealers Association president Salim Godil believed that it was the fundamental right of everyone to buy a car; either it is a new one or an old imported one.

However, government should regulate import of used cars while protecting local manufacturers.

In a letter to Finance Minister Dr Abdul Hafeez Shaikh, he said used cars are allowed to expatriates, but everyone knows that this concession is often misused.

Usually passport of an expatriate is sold for Rs12,000 for three months for the purpose of import of such a vehicle.

When such a vehicle is sold, a smuggler, terrorist or people with undeclared wealth can register it in the name of the importer.

He said this actually happens, but its percentage is small. Profits earned are not declared and no income tax is paid on profits on such cars. Meager commissions are declared eliminating tax on profits.

He said spares of imported used cars are expensive. Some of the parts are to be imported and cars remain stranded till the arrival of their parts which usually takes six to eight weeks.

The scheme to import used cars was to facilitate expatriates. However, if this business is properly regulated and monitored, they too can survive. He said that strict rules on deletion programme be observed and manufacturers should not be given a free hand.

Quality checks be imposed and cost of small cars be made affordable by reducing the existing taxes.

He urged the government to regulate trade of used cars with proper import regulations.

If genuine expatriates are to be accommodated, it should be ensured that the car had been in their use with registration in their names for at least one year.

Dealers importing used cars be registered and buyers data to be provided to tax authorities. While purchasing a new car, NTN by buyers is to be submitted at the time of booking and registration.