SECOND HAND CARS

A dominating factor in auto business

By AZAM ALI
July 19 - 25, 2004

The business of second hand vehicles is one of the major contributors for generating employment opportunities in Pakistan.

The second hand vehicles of different makes, directly and indirectly provide job opportunities to over 2.5 million people which include skilled and unskilled labor force of all ages throughout the country.

This job oriented sector creates tremendous openings for motorcycle dealers, mechanics, denting and painting workshops, auto electricians, importers and vendors in spare parts business, car air-conditioning, manufacturers, importers and workshop for maintenance, wheel balancing, vehicles accessories shops, spare parts, lock and Key shops, seat cover manufacturing, seat cushion makers, and vehicle decorations etc.

Despite having tremendous economic activity the business of used or second hand vehicles continues to enjoy working out of the domain of the documentation and regulations. It is only due to negligence, there is no proper data or information about this sector neither with the public sector nor in the private sector. Even the Pakistan statistic department has no accurate data regarding this field which in a way is dominating the automobile sector in Pakistan.

However different associations such as Dealers Association, Auto Spare Parts Dealers Association and Spare Parts Importers Association have some loose information about the relevant trade while other segments of the trade were absolutely ignorant about their respective trade.

Mohammad Ayyub a senior spare parts dealer and importer said that there were approximately 25,000 different types of spare parts shops all over the country which have engaged more than 1.75 million people into the spare parts business.

The province of Punjab stands on top whereas Sindh comes as runner up as far as the number of shops were concerned. Spare parts business has provided jobs to investors, middlemen, skilled and unskilled people. He further said that since the year 2000 Pakistan has also become an exporter of spare parts and car accessories to the Middle East and the adjoining parts but now India is also trying to capture this market.

Further the car dealers sector has also provided large scale job opportunities to investors, middle men, all type of technical people and labourers but the registered number of car dealer showrooms is very low according to a car dealer association office bearer as apart from car dealers showrooms there are now weekly bazaars as well. There are about 510,000 cars and jeeps registered in Karachi whereas in entire Sindh it is 600,000 only, whereas the total number of cars and jeeps of various categories in Pakistan is approximately 2,400,000. 50% of them are 10 to 20 years old while 10 % are more than 30 years old while others are of new models. Every day In Karachi 80 to 150 new cars are being registered while 100 to 120 second hand cars are purchased and sold. There are 42,000 auto rickshaws in Karachi all of them are 10 to 30 years old this auto rickshaws are in lesser than Punjab but it has engaged large number of labors due to their age. There are 38,000 yellow cabs and taxis in Karachi and more than 91,000 all over Pakistan and 92 % of them are old. There are 21,000 buses, Mini Buses and coaches in Karachi, and 110,000 in all over Pakistan and 80% of them are old while 30% have completed their lives and plying with aggressive maintenance system. A new field has also emerged in the second hand car business that is titled as "Car Cosmetics" the showrooms have different fancy and latest items for old and new cars. That includes fancy lights horns and even banned items.

The trade in motor vehicle is low as according to the motor registration departments of the provincial Excise and Taxation Ministry, there are 465,000 motorcycles in Karachi and 610,000 in Sindh province while total number of motorcycle in Pakistan is about one million. 50% of all the motorcycles are old models while only 10 % are of new models. In Karachi 56 to 70 motorcycles of various conditions are sold each day and only 40 to 45 motorcycles of these are transferred to the new owners while others wait for resale. There is a big market of second hand motorcycle dealers at Regal Chowk and a big market of motorcycles spare parts is at M. A. Jinnah Road near Radio Pakistan station. Further the trade in car sales is slow because of nearly 42000 auto rickshaws in Karachi and these are nearly 10 to 30 years old. In addition to all this there are 38000 yellow cabs and taxis in Karachi out of a total of 91000 within the country and out of these 92% are old models. There are also 21000 buses, mini buses and coaches in Karachi out of a total of 10000 all over Pakistan and out of these 80% are old whereas 30% are fully depreciated  and plying with tremendous cost in maintenance and in order for them to look good new showrooms titled as "Car Cosmetics" have blossomed selling fancy and latest gadgets and these gadgets includes numerous types of fancy lights, horns and various banned items.