30% decline in car sales as a result of increased withholding taxes on filers and non-filers, a 1% capital value tax on vehicles

The auto industry anticipates a 30% decline in car sales in 2022 as a result of increased withholding taxes on filers and non-filers, a 1% capital value tax on vehicles over 1300 cc, and stringent auto financing restrictions to control demand and uncertainty from high interest rates.

car sales
filers and non-filers
Source: dawnnews.tv

Market sources told Dawn that after Eid-ul-Adha, car prices would rise as the industry passed on the effects of the weakening rupee and high shipping costs to consumers.

Indus Motor Company (IMC) cancelled advance bookings on May 18, followed by Lucky Motor Corporation Limited (LMCL), Picanto Automatic & Sportage, and Pak Suzuki Motor. From July 1, Company Limited stopped booking automobiles.

This is because of the currency rate issue and the SBP’s decision to ban Letters of Credit for spare parts and accessories imports starting May 20, 2022.

The financial year was hampered, according to IMC CEO Ali Asghar Jamali, by higher gas prices, SBP restrictions on establishing LCs for auto parts, and new taxes that went into effect on July 1. In 2023, decline in car sales by 30%.

Asghar Jamali on a possible price hike after Eid: “We have no choice.”

According to auto industry insiders, September 2022 will see the effects of tax hikes, rising interest rates, car prices, fuel and diesel price hikes, LC limitations, and shortened consumer financing periods. As the sales numbers show, assemblers are confident about advance bookings for cars, jeeps, and SUVs that will be delivered in the coming months.

IMC finances 26% of its sales, whereas Pak Suzuki finances 35%.

A Korean car assembler said the corporation had not raised the cost of ‘Kia’ vehicles, with a 1% increase on vehicles exceeding 1,300 cc from July 1. VT 360 to 74,990 rupees have been implemented since the Finance Act took effect.

HACL spokesman stated there is no change in WHT on filers in Honda product line, however non-filers will be penalised Rs 75,000 on Honda City 1200cc. Non-filers pay Rs 1.5 lakh instead of Rs 1 lakh for 1301cc.

PSMCL has requested its authorised dealers to collect Rs 10,000 from filers for Alto (all variants), Bolan, and Ravi instead of Rs 7,500, and Rs 15,000 from non-filers. 30k rupees.

The government asked automakers about price hikes.

Wagon R and Cultus buyers would pay Rs 20,000 instead of Rs 15,000, while Swift buyers will pay Rs 25,000.

Non-filers must pay Rs 60,000 instead of Rs 30,000 and Rs 75,000 instead of Rs 50,000 to buy these models.

An Excise and Taxation Sindh official claimed that car registration fees have remained the same for two years, but the WHT rate on filers, non-filers, and CVTs has increased from July 1. Is.

The registration charge for cars/jeeps under 1000 cc is 1% of the vehicle’s cost, 1.25 % for 1,000-1,300 cc, 2.25 % for 1,301-2,50 cc, and 5% for over 2,500 cc.

A private bank staffer who works on auto leases said limited consumer inquiries make auto financing tough.

Pakistan Automotive Manufacturers Association members sold 210,633 cars in the first 11 months of FY 2022, up from 139,613 the year before. LCVs, vans, and jeeps sales rose from 45,891 to 40,255.

Source: dawnnews.tv