Businessmen welcome duty relief on hybrid cars

By APP
Published: June 18, 2013

Hybrid cars of up to 1200cc engine capacity have been fully exempted from import duty. PHOTO: porsche.com

ISLAMABAD: The business community welcomed the government’s decision to exempt hybrid cars from taxes, saying it will lead to a reduction in the oil import bill and promote a pollution-free environment in the country.

Hybrid cars of up to 1200cc engine capacity have been fully exempted from import duty, sales and income tax in the proposals for the federal budget for next fiscal year. Similarly, hybrid cars with engines ranging between 1201cc to 1800cc capacity have been exempted of 50% of the duty applicable on them, while hybrid cars with engines ranging from 1801cc to 2500cc have been waived 25% of the duties applicable on them.

“Not only will the decision reduce Pakistan’s oil import bill, it will also be a positive step towards improving the environment,” remarked a senior official of a leading car assembler while talking to the APP.

He said that imports of hybrid cars will also help control emissions of carbon-monoxide, which poses a serious threat to the environment.

He said that about 12.5 million vehicles are currently on the roads in the country, which are polluting the air and depriving the people of a neat and clean environment. He further said that around 80% of global environmental changes were due to automobile pollution.

He said that his company had so far sold more than five million hybrid vehicles since its launch, and that countries like India, Malaysia, Philippines and Indonesia were already importing them.

The official said that local Toyota assemblers will import some hybrid vehicles to fulfil domestic requirements, and that the company will also provide a quality guarantee of up to two years or 50,000 kilometres, whichever comes first,  to facilitate its clients.

The use of hybrid cars reportedly leads to a 50% reduction in fuel consumption and expenses when compared to the overall monthly expenditure on vehicles running on compressed natural gas (CNG), he added.

The Pakistan Muslim League – Nawaz government has proposed that duties on hybrid cars be reduced in an effort to tackle growing demand for expensive petrol and CNG.

Published in The Express Tribune, June 18th, 2013.

Like Business on Facebook to stay informed and join in the conversation.

Reader Comments (22)

  • Rizwan
    Jun 18, 2013 - 3:10AM

    Could any one please tell me which Hybrid car has 1200 cc engine capacity ?

    its like giving dogs bones that actually don’t exists.

    Recommend

  • gul
    Jun 18, 2013 - 8:56AM

    ET, please accept this is paid news. Hybrid cars would reduce the oil import (joke).

    Few thousand people who would be able to afford hybrid cars, if even all of them replace there existing cars with these relatively expensive hybrid cars , it would be like a drop in ocean.

    It won’t change oil import and in fact it may increase oil import. Hybrid Cars for the moment means (battery+oil), to charge battery, you need electricity and since Pakistan is relying more on oil fuel based electricity production, you can understand the rest :)

    Recommend

  • Jun 18, 2013 - 9:24AM

    As far as I know there is no Hybrid car in production all over the world with 1200cc or below engine capacity.

    Some people mistake EV (Electric Vehicle) as Hybrid, which is not true. Duty reduction is on Hybrids not on EVs.

    May be Indus has asked Toyota Japan to install 1200CC engine in Prius for Pakistan. If that’s not the case then the either someone misinformed the government or the government is playing games with the people.

    Recommend

  • Eshal
    Jun 18, 2013 - 9:37AM

    @ Rizwan
    I am not endorsing anything but just sharing it for information, though i dont know the authencity of it:

    http://www.pakwheels.com/blog/2013/06/12/pakistan-to-go-green-duties-slashed-off-of-hybrid-cars/

    Recommend

  • Anoni
    Jun 18, 2013 - 9:52AM

    Show me the 1200cc hybrid car.
    To the politician , enough making fool of public . we will punish you for playing dumb with us in the next election if you don’t change you habit :P

    Recommend

  • asdasd
    Jun 18, 2013 - 10:01AM

    Hybrid Car 1200CC????????? seriously!!!!
    have never come across one which is 1200cc,, I think its called a electric car

    Recommend

  • Nadeem
    Jun 18, 2013 - 10:15AM

    So now the hybrid car with built in ups. That,s what they want to import, not to build anything here.

    Recommend

  • Nadeem
    Jun 18, 2013 - 10:19AM

    Nawaz sharif is still living in 1900 something, he has the ability to improve pakistan no argue on it but need at least 200 more years.

    Recommend

  • Cobra Commander
    Jun 18, 2013 - 10:39AM

    @gul:
    One do not have to plug his battery into an electrical socket to charge the car battery. The battery charges by itself when the car is running on the fuel. More on this can be shared by prius owners as I notice many prius cars on the streets.

    Recommend

  • Syed
    Jun 18, 2013 - 10:44AM

    This leadership has not learnt or change a bit… back in the days, they imported BMW cars and scandal came up and now reducing the duties for Hybrid cars.

    ET please do not publish these article whcih are factually wrong. Major share of oild import is for thermal power project to generate electicity not on petrol.

    I wish they have reduced the GST on common person and brought Agri sector in the net.

    Recommend

  • Citizen
    Jun 18, 2013 - 10:53AM

    How about they enforce which cars/buses/trucks/rickshaws are allowed on the roads first! There are buses and taxis for example that do dont meet safety/pollution standards, and should have been pulled off the road decades ago. I rest my case

    Recommend

  • Liaqat Ali
    Jun 18, 2013 - 12:32PM

    When Hamid Mir questioned the Finance Minister concerning exemption of duty on hybrid cars and available hybrids with 1200cc engine capacity he said that the local auto manufacturers will actually make or modify the hybrid cars with 1200 cc engine. How much of a non technical person do you have to be to not realize that Hybrid Technology is manifolds more complex and complicated then your normal car and considering that Pakistan’s auto industry even after years of experience is incapable of assembling a car properly, set aside manufacturing its mechanical and electrical components, it is extremely unlikely that the local industry has the capacity to modify a hybrid with 1200cc engine, without actually ruining it.

    Above all what should be realized is that Hybrid vehicles are an art of electrical and mechanical equipment combination and calibration. Especially when it comes to the engine size. The same engine which charges the batteries also provide power to the wheels during the charging mode. Meaning that the engine in an hybrid is under twice the load as a normal car. Therefore if a smaller engine is installed then during charging periods it would draw immense fuel and may not be able to sufficiently charge the batteries. The consequent end result of such modification to a hybrid would be no gain in fuel efficiency or maybe even worse.

    Recommend

  • Shams Khan
    Jun 18, 2013 - 12:41PM

    Is the Hybrid 1200cc is replacement for Suzuki Mehran the poor man car , poor man conveyance is bicycle you can call it Hybrid it should be made Sales Tax free

    Recommend

  • Shah (Berlin)
    Jun 18, 2013 - 12:48PM

    I think most of the people here dont understand the concept of Hybrid. Its not an electric car. Its needs not external electric charging.
    Hybrid cars are the future and will decrease fuel consumption and CO2 emission. These steps have to be taken with future insight.Yes you wont get consumption decreased within days, but these are important steps….
    Yes duty is free for 1200cc but as stated 50% dicount upto 1800cc….

    I am a PTI supporter. But to be honest I find this decision not bad at all. Hybrid cars should be made cheaper and this is the first step….

    Recommend

  • Muhammad Ali Bohyo
    Jun 18, 2013 - 1:26PM

    C’mon no hybrid car even made within Pakistan even without duties gonna cost less than 2.2 million… even if they managed to convert corolla into hybrid which is not they gonna do… it wont come less than that…now we talk about the extra cost if a customer buy a hybrid how much he saves with respect to the extra cost of the vehicle… it will take another 7 years of driving 20,000 kilometers / month to balance fuel savings with the extra cost of vehicle…. logically its fools ground… in U.S Canada the prius cost $28,000 with $4000 as a subsidy by the state.. (california) corolla cost $15000 even in US with $5 / gallon fuel savings require 8 years to break even….

    So there you have it. Assuming $5/gallon, and you drive your Prius only the city, you would have to drive 230577.6 kilometers before you just break even over a corolla !

    This is an absurd number of miles just to save on gas, and gas prices could go down (note that I chose a high $5/gal). Also, I’ve made no assumptions of repairs. Your Prius will probably need a new battery before then, which can be $2,000 versus a $200 Yaris battery

    Recommend

  • Shah (Berlin)
    Jun 18, 2013 - 2:03PM

    @Liaqat Ali:

    I agree that its very diffcult to find a 1200CC hybrid car…but give a look to Honda Jazz Hybrid which is 1.3 CC…

    My point is reducing duties you are promoting Hybrid cars…..which is in good interest. Even in Europe its not that common to find people driving Hybrid cars but if such subsidiaries are not given no one will drive them as these cars are no doubt expensive…..

    The point here is not to reduce loadshedding …within 5 days. The point here is small improvements and government boost to promote alternativ solutions…..not find a alternative to Suzuki Mehran….

    Hybrid will take time to grasp the market.it will take years…..but steps have to be taken now……!!!!

    Recommend

  • faisal
    Jun 18, 2013 - 2:57PM

    I own a hybrid car and would highly recommend it it. Saves lots of fuel. @gul. they r not electric cars so saying there is no electricity is immaterial. These cars have a battery which is charged by dynamo effect when car is going downhill or when braking. Also, a kit is available in USA to convert any car to hybrid. Its not cheap, but if we can convert cars to CNG, we can convert to hybrid also. Just 2-3 lac per car.

    Recommend

  • Haroon Rashid
    Jun 18, 2013 - 6:10PM

    Good if Indus Motors will import a 1200 cc hybrid on the Prius body. Indus Motors recently a locally assembled SUV with a marketing/sales hype. The Government should strictly regulate the import/assembly of cars in Pakistan should be on international safety standards by recognized rating agencies which rate Toyota cars in Japan as McGrawHill’s subsidiary goes for detailed safety, energy efficiency, evironment/emissions, compliance of ITS standards etc., a must for all Japanese, European cars.
    All cars whether imported, local assembled should conform to international ITS standards, in adherence of Japan Automobile Manufacturer Association,, the standard not as yet endorsed and adopted by PAMA the Pakistani association.

    Recommend

  • uet
    Jun 18, 2013 - 6:11PM

    I been driving hybrid for 6 yrs now. This is one of the best steps for reduction in fuel
    consumption and environment I dont know why no one in Pakistan thought about it before.
    They should remove all duties upto 2500 cc to see the real potential of hybrids.
    By the way hybrid batteries dont need external charging!

    Recommend

  • riazsiddiqui
    Jul 9, 2013 - 6:05PM

    Well for those of us who are in their 50s and have a good knowledge about the international (and more likely Japanese ) auto industry which manufactured 11m vehicles in 2011 as apposed to 160, 000 of Pakistan, things work in a slightly different way in Pakistan.

    Firstly anybody can look up the Google and find out that there is one individual in Pakistan who would benefit by the duty free import of under 1200 cc of BYD brand of Chinese cars. There are a few commercially available under 1200 cc cars e.g VW JETTA 1200 hybrid and Honda FIT 1200 cc.

    Nevertheless it is completely legal to ask a Japanese manufacturer to put say 1200 cc in a HONDA City sized Hybrid and produce a special production of 5000 units to be imported in Pakistan. There are examples like this in the past where an under powered engine was put in a bigger body to put it into a lower duty category( Nissan 1.0 JX, VW 1200 )

    Recommend

  • stupid
    Aug 15, 2013 - 9:13AM

    @Nadeem:
    This is not a secret now that Hamza Shahbaz has a partnership in the company who is importing these 12CC cars. More amazing News is that still 1200CC car is not available all over the world till date. For reference see the program of Mr. Kashif Abbasi “Off the Record” of ARY News dated August 13, 2013Recommend

  • Haroon Rashid
    Aug 15, 2013 - 2:00PM

    Need consensus to participate at an international webinar on hybrid electric car, from a highly authentic platform.

    How many readers will be interested to know about hybrid technology, etc.

    Recommend

More in Business