Pakistan witnessed record foreign exchange spending on highest-ever arrival of new automobiles in 2020-21. After this, the government decided to impose a temporary ban on the import of CBU (completely built unit) vehicles for the next 6 months, effective from January to June 2022 in order to curtail the widening current account deficit.
However according to Ministry of Industries and Production, under the World Trade Organization (WTO) regime, the government cannot impose a ban on CBU imports. Instead, tariffs on imports can be increased so as to reduce the import bill. Thus a 50% regulatory duty on the import of CBU vehicles is under consideration, The proposals will be submitted to the Tariff Policy Board (TPB) for approval. Once approved, the policy draft shall be submitted before the Prime Minister for the final decision.
If implemented, the prices of CBU imported cars are likely going to witness a considerable surge. Many automakers operating in Pakistan whether existing ones or newcomers have a good range of vehicles in their portfolio which are not assembled locally but are imported as completely built units. Thus, the added duties will see prices of the likes of Toyota Corolla Cross, Camry, Land Cruiser & Prado, Rush and Prius as well as Honda Accord & CR-V and Suzuki APV, Vitara and Jimny to increase.
Related: Ban on CBUs to Impact Most Newcomers
Among the South Korean duo, Kia offers the Carnival whereas the Santa Fe and Ioniq hybrid by Hyundai are sold as CBU. In addition, MG’s entire lineup comes in form of CBU which includes HS, HE-PHEV, ZS and ZS-EV whereas Haval H6 and Jolion by Sazgar-BAIC are also sold as CBUs with local production not in sight.
Proton X70 which was launched way back in December 2020 is again fully dependent on CBU since the local plant is not yet capable to assemble the X70 locally despite the fact that the vehicle was launched over a year ago. Lastly, the GAC GS3 which was expected to be launched towards the end of this year is also expected to take a toll since the company was aiming to introduce the crossover as a CBU.
In addition, premium brands such as Audi, Mercedes-Benz, BMW, Porsche and Range Rover also come as CBUs but since they are targeted in the niche market, these cars are not imported in large volumes.
A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com
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