Pakistan Automobile Industry

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ISLAMABAD: The government is considering reducing taxes on new imported and locally assembled cars of up to 800cc engine capacity in the next budget aimed at bringing these within the purchasing power of the middle class.

The proposal, which will be further fine-tuned today (Thursday), seeks to cut import duties and taxes on new imported cars by up to 63% and reduce them by nearly 7% for locally made cars, sources in the Ministry of Industries told The Express Tribune.

The proposal includes abolishing 50% regulatory duty, either eliminating 7% additional customs duty or reducing the customs duty by the same percentage and abolishing 2.5% federal excise duty on new imported cars, the sources said.

In addition to that, there is also a proposal to abolish 5% withholding tax and reduce the standard general sales tax (GST) rate of 17% to 12% on the import of new cars of up to 800cc, they added.

The existing combined taxes and duties on new imported cars of up to 800cc are about 132% of the price which, if this proposal is implemented, will come down by 63% of the value of imported cars, said the sources.

In the small category, the price of a new imported car may go down by Rs300,000 to Rs400,000, subject to implementation of this proposal, said the sources.

These taxes have been kept high to provide protection to local assemblers who have long been fleecing the consumers. New vehicles can be imported by anyone against payment of duties and taxes levied under the existing import procedures and requirements laid down in the Import Policy Order and Customs law.

The sources said that there is also a proposal to abolish 2.5% federal excise duty, reduce the GST rate to 12% and abolish Rs7,500 advance income tax on locally made cars of up to 800cc. Subject to endorsement of the proposal, the price of a 660cc Suzuki VXL may fall by Rs109,000 to Rs1.53 million, said the sources.

 

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Auto Policy 2021-26 pivots towards EEEs


BR Research
08 Jun 2021

The automotive policy 2016-21 has been a success. The domination of three Japanese players in four-wheeler segment was broken and numerous new entrants came, while consumers were given the option of compact SUVs which was not the case earlier.

Now the next policy (2021-26) is in the making and some part of it is likely to be reflected in the upcoming budget next week. The aim is to submit the policy for approval to Engineering Development Board (EDB) by June end.

There are four main contours of the auto policy. There might be some incentives for small cars (850 cc and below) and the idea is to make people graduate from bike to cars by making cars affordable.
The second part is to increase localization in domestically assembled cars. Third is to pave way for exporting auto parts, 2/3 wheelers and tractors.
Last, but not the least is to continue the zest of enhancing competition in the market. Already, it is happening with eleven car makers in the market (from three) where a new model is launched every month.

The aim is to increase car production capacity to 650,000 units a year from existing 417,000 units in five years. For 2/3 wheelers, capacity is projected to increase to 7 million units, 100,000 units for tractors and 20,000 units for heavy vehicles. Once that kind of expansion takes place, affordability will come in tandem with enhanced competition and export avenues may open naturally.
Incentives shall be offered for innovation - for example if a company comes with inhouse design facility, it will receive tax credit. Duty draw back on local taxes and levies (DLTL) may be considered to make export attractive. Then for better environment, all car assemblers must follow EURO 5 standards for engines in due course of time.

There will be no extension of the existing policy 2016-21. It will expire and any car launched will have five years benefit in the form of low duty structure for five years from the time of launch of the car or by June 2026, whichever comes first. In the last policy, the new entrants captured the virgin market of compact SUVs. The focus of virtually all the players is now on high end cars.

Those who have attempted to launch in affordable segment, have not seen much success.

The policy dilemma is to enhance the market of affordable cars segment (850 cc and below) which is termed as efficient, economical, and environmentally friendly (EEE) segment. The government is likely to announce refinancing scheme (through SBP) for EEE cars. The consumers will get cars at lower than market prevailing rates. There could be other incentives in the form of taxation and duties that may be unveiled soon.

For Electric Vehicles (EVs) and Hybrids there are existing policies where duty and taxes structures are relaxed as compared to internal combustion engines (ICE) . These are likely to continue without any significant change. EV parts in hybrid are likely to get similar incentives as stipulated in EV policy.

The real challenge is to expand the car market in Pakistan.

The capacity is enhanced since new players came in, but the market size is yet to reach the peak of 2018. With 650K cars aimed capacity, the market needs to reach 500K. For that, overall duty structure on CKDs needs to be revisited. There might be some in the budget and automotive policy. But these would be gradual and happen over next five years. The idea is to not give any shock to the market and to let every assembler take adequate measures to adopt and adapt.

The tariffs now may not remain the same. And any change (reduction) will be gradual to not disrupt the market. Higher incentives would be in EEE segment where the growth could be higher. Unfortunately, the most affordable car for two decades (Mehran by Suzuki) is discontinued. The country needs a car in that price range.

The whole idea of new auto policy is pivoted over enhancing competition and incentivizing affordability. The aim should be to let the existing players (especially new entrants) cement their position in the market without giving them any new incentive. Incentives, if any, would be across the board.

 

[Blacklight]

ISLAMABAD: The government is considering reducing taxes on new imported and locally assembled cars of up to 800cc engine capacity in the next budget aimed at bringing these within the purchasing power of the middle class.

The proposal, which will be further fine-tuned today (Thursday), seeks to cut import duties and taxes on new imported cars by up to 63% and reduce them by nearly 7% for locally made cars, sources in the Ministry of Industries told The Express Tribune.

The proposal includes abolishing 50% regulatory duty, either eliminating 7% additional customs duty or reducing the customs duty by the same percentage and abolishing 2.5% federal excise duty on new imported cars, the sources said.

In addition to that, there is also a proposal to abolish 5% withholding tax and reduce the standard general sales tax (GST) rate of 17% to 12% on the import of new cars of up to 800cc, they added.

The existing combined taxes and duties on new imported cars of up to 800cc are about 132% of the price which, if this proposal is implemented, will come down by 63% of the value of imported cars, said the sources.

In the small category, the price of a new imported car may go down by Rs300,000 to Rs400,000, subject to implementation of this proposal, said the sources.

These taxes have been kept high to provide protection to local assemblers who have long been fleecing the consumers. New vehicles can be imported by anyone against payment of duties and taxes levied under the existing import procedures and requirements laid down in the Import Policy Order and Customs law.

The sources said that there is also a proposal to abolish 2.5% federal excise duty, reduce the GST rate to 12% and abolish Rs7,500 advance income tax on locally made cars of up to 800cc. Subject to endorsement of the proposal, the price of a 660cc Suzuki VXL may fall by Rs109,000 to Rs1.53 million, said the sources.

For the love of God, make it at least 1300cc

 

[ghazi52]

New Metro buses arrived at Karachi Port
FOTON buses for Lahore Metro .....

 

[ghazi52]

A joint venture of Service Group and Chinese firm Chaoyang Long March Tyre Co Ltd is ready to start its tyre manufacturing plant this month in Pakistan for buses and trucks.

This PKR 16.43 billion project will reduce import pressure, and will be able to export 85% of total tyre output soon.

 

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Auto sector wins relief in budget

Government announces exemptions for 850cc cars to make them affordable for general public


Usman Hanif
June 12, 2021

KARACHI: Keeping in view that the prices of locally produced automobiles have soared past the affordability of a common man, the government announced a handful of initiatives for the automobile sector in budget 2021-22 aimed at curbing car prices.

While unveiling the federal budget on Friday, Finance Minister Shaukat Tarin announced tax exemptions for cars having an engine capacity of 850cc.

“Rising car prices in the country have irked the common man hence federal excise duty and value added tax on locally produced cars, having engine capacities of up to 850cc, have been abolished,” said Tarin.

In addition, the government also decreased the sales tax rate on such cars from 17% to 12.5%.
He was of the view that these measures would enable people from the lower and middle class to buy their own automobiles.

“The automobile sector contributes immensely to the development of the country and the national treasury besides providing employment to millions of people,” he said.

Despite being a relatively smaller segment, the automobile sector of the country has recorded rapid growth over the past few years, said the finance minister.

To lend support to this sector, the government has decided to exempt completely built up (CBU) units of cars of up to 850cc from customs duty and regulatory duty.

Moreover, vehicle manufacturers will also be exempted from advance customs duty as the government moves to streamline the tariff structure.

"These are excellent incentives and they will surely benefit customers,” said Pak Suzuki Motor Company official spokesperson Shafiq Ahmed Shaikh in comments to the Express Tribune. “We appreciate the government for announcing incentives for the consumers of the automobile sector.”

Automobile sector expert Mashhood Khan said that minimising the cost of doing business was the main challenge for an auto part manufacturer (APM).

Reduction in sales tax on cars of engine capacities of 850cc and below will improve demand and enhance capacity utilisation of APMs, he said. This initiative in particular will generate jobs in the auto sector, he added.

 

[ghazi52]

Sunlong to setup Heavy Vehicles assembly plant in Daudkhel District Mianwali.

Assembly plant in Daudkhel Near Kalabagh will produce 600 Sunlong buses per annum, 5000 Shacman trucks, 10,000 CIMC-RJST Semi trailers and Tankers. Cost of the Project is 7 to 10 million US Dollars
Rawal Industrial Equipment & Malik Group of Companies entered into the agreement in this regard
assembly plant for manufacturing of heavy transport vehicles & related technology was being established at Daudkhel in District Mianwali which is situated on the route of CPEC.

 

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Islamabad Metro

 

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Hyundai Nishat Motors is launching 8th generation Sonata. Pakistan will be 3rd country to produce this generation. It is the first premium sedan car assembled in Pakistan. Two variants 2.0 & 2.5 liter to be launched. You will be positively surprised by the price
© Pakwheels.com

 

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1972 Pontiac Lemans Spotted in Karachi

 

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https://www.facebook.com/video.php?v=2905199383131500

 

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American Automobile in Karachi, 1970's.

 

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Indus Motor Company unveils New Hilux REVO 2021


The Frontier Post

KARACHI: Indus Motor Company (IMC) announced the launch of its facelifted Toyota Hilux Revo 2021. With more robust features, off-road driving capabilities and modern design, the new Revo V, Revo G AT and Revo G MT variants will be hitting the market with a price tag ranging between Rs 6.54 million and Rs 7.49 million.

The Company’s Chief Executive, Ali Asghar Jamali said, “Over the years, 4×4 pickup trucks in Pakistan, have garnered popularity and the Revo clearly takes the lead, preferred by both male and female drivers alike, whether for urban driving or off-roading in the deserts of Cholistan.”

He further added, “Following Toyota’s global philosophy of putting “customer first”, we focus on advancing our products that cater to the modern world requirement. The new Revo will soon be hitting the roads, sporting the powerful contemporary look, addedtechnology as well as enhanced driving pleasure for our customers.”

The new Hilux Revo has been revamped with a New Generation 1GD engine with improved power and torque output across a wider power band (150 kW peak power &500 Nm of peak torque). Other enhancements include the advanced Variable Flow Control power steering, refined suspension and cabin mounts, redesigned 18” alloy wheels and an upgraded 9” audio system to ensure an ultimate driving experience.

Under the government’s ‘RoshanApni Car’ scheme, overseas Pakistanis wishing to purchase Hilux Revo for their families back home, will also be able to make a purchase through the ‘Toyota Smart Purchase’ online portal. These customers will have the added advantage of preferential vehicle delivery time.

 

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Punjab to setup Auto Parts Technology Park.

Punjab Minister for Industries and Commerce Mian Aslam Iqbal has revealed that the government of Punjab is planning to set up Auto Parts Technology Park near #Lahore in a bid to support the growing industrialisation.

The new facility will be constructed at the Quaid-e-Azam Business Park, Sheikhupura, a Special Economic Zone (SEZ) of the multibillion-dollar China-Pakistan Economic Corridor (CPEC) and one of the eight industrial parks working under the Punjab government.

During a meeting with members of the Punjab Industrial Estate Development and Management Company (PIEDMC), Iqbal pointed out that the Auto Parts Technology Park would be established on nine acres of land and it would facilitate the auto sector in terms of product design, training centres, parts manufacturing, testing and allied facilities.

The industrial park is located near Lahore on the Lahore-Islamabad Motorway. This project was initiated during the previous government’s tenure with the name of Quaid-e-Azam Apparel Park.

The name was, however, changed during PTI’s tenure and Prime Minister Imran Khan inaugurated the park in July 2020.

 

[ghazi52]

Auto loans are continuing to shine bright with average monthly net borrowings over the past 11 months standing at about Rs8 billion. Assuming an average loan size of Rs2.5 million, about 3,100 cars are being granted a loan each month since July. In May-21 based on the same assumption, a quick calculation suggests about 120,000 cars have an active loan on them. Though car sales were much higher during FY19, auto loans are having the best year so far with net borrowings reaching Rs12 billion for the first time ever in Mar-21.