More carmakers announce price reduction

String of price cuts came after govt unveiled tax incentives in new policy

KARACHI:

After Pak Suzuki Motor Company and Indus Motor Company, KIA Lucky Motors, Honda Atlas Cars and Hyundai Nishat have also announced reduction in prices of their vehicles in order to pass on the benefit of tax withdrawal to consumers.

On July 7, the federal government announced tax incentives under the new auto policy, which have now sparked a string of price cuts by the auto companies.

Honda Atlas Cars reduced the price of Civic 1.5 RS Turbo by Rs135,000, which dropped from Rs4.7 million to Rs4.56 million.

Following a cut of Rs115,000, the Honda Civic 1.8 i-VTEC CVT variant will now be available at Rs3.614 million. Earlier, the model was being sold for Rs3.729 million.

The company reduced the price of Civic Oriel 1.8 i-VTEC CVT by Rs115,000, which decreased from Rs3.98 million to Rs3.86 million.

Honda BRV i-VTEC S AT will now be sold for Rs3.37 million after a price cut of Rs105,000. Earlier, the vehicle was priced at Rs3.48 million.

Welcoming the tax reduction, KIA Lucky Motors also announced price cuts for various models.

The price of KIA Picanto 1.0L AT has been reduced from Rs2.05 million to Rs1.92 million, a contraction of Rs127,000.

After a cut of Rs118,000, KIA Picanto 1.0L MT variant will now be available at Rs1.78 million. Earlier, the model was priced at Rs1.9 million.

Prices of KIA Sportage variants came down by Rs105,000-129,000. Following the decrease, the Sportage AWD will be sold for Rs5.27 million while Sportage FWD will be priced at Rs4.78 million. In addition, Sportage Alpha model will be available at Rs4.29 million.

The cost of KIA Sorento 2.4 AWD dropped from Rs8 million to Rs7.8 million.

Hyundai Nishat Motor followed suit and notified a reduction in vehicle rates.

The price of Hyundai Tucson AWD AT Ultimate was slashed by Rs130,000, which declined from Rs5.6 million to Rs5.47 million.

Similarly, the price of Hyundai Elantra GLS shrank from Rs4.05 million to Rs3.9 million, a cut of Rs150,000.

Auto policy

Some of the stakeholders of the automobile sector praised the new auto policy, citing that it would boost the supply of cars having engine capacity of 1,000cc which would, in turn, enhance economic activity.

“Automobile is one of the largest industries in the country and it has a significant share in the overall GDP of Pakistan,” remarked Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) former president Aamir Allawala while talking to The Express Tribune.

“Increase in demand for 1,000cc cars translates into employment creation in the auto sector, hence the policy is indirectly beneficial for the public.”

While the auto sector and consumers continue to cherish the decrease in car prices, local vendors are unhappy with the new policy.

Auto industry expert Mashood Ali Khan said that taxes on car parts were reduced, but the government failed to slash the levy on raw material, therefore the local vendors would have no incentive to enhance production.

“This means we will be unable to lift local production of car parts and will fail to compete in the international market,” he said.

Association of Pakistan Motorcycle Assemblers Chairman Muhammad Sabir Shaikh criticised the leadership for ignoring motorcycle assembly and electric two-wheeler segments in the new policy.

Published in The Express Tribune, July 10^th, 2021.

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