Economic uncertainty puts sale of 1,700cc and above cars in jeopardy

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KARACHI: The sale of 1,700cc and above cars has dropped considerably after media reports that the government would withdraw its decision of imposing 10pc federal excise duty (FED) on 1,700cc and above cars.

According to one car dealer Iqbal Shah, the sales of cars in the above-mentioned category were already suffering, claiming that the news regarding the removal of FED has further impacted the sales.

“An amount of around Rs300,000 is at stake. The buyer will lose the amount if he or she buys a car and next day the government implements its decision,” Shah said. “If FED is removed, Toyota Grande will cost Rs300,000 less, the buyers Honda Civic will save around Rs325,000, while the buyers of Toyota Fortuner will be able to save as much as Rs700,000.”

It is pertinent to mention that the auto sector welcomed the withdrawal of the condition on non-filers for the purchase of vehicles and properties, introduced in the earlier supplementary budget. However, the imposition of FED was surprising for the manufacturers, as they feared a decline in the sale of vehicles.

The Senate’s Standing Committee on Industries and Production earlier this month was informed that the 10pc FED imposed on locally manufactured cars and SUVs, having engine capacity exceeding 1,700cc and above, would be withdrawn.

Advisor to Prime Minister on Commerce Abdul Abdul Razaq Dawood, in his briefing to the committee, said that the decision of imposing 10pc FED on 17,00cc and above cars was being revisited, as implications of FED on auto sales and its subsequent impacts on revenue generation were being discussed. “We learn from experiences,” he had remarked.

Toyota CEO Ali Asghar Jamali told Pakistan Today that the overall sales in the category have dropped by 50pc since the FED was imposed. However, he was not sure the recent news regarding the removal of FED has also impacted sales.

Jamali believed that the issue of FED would not be addressed until the announcement of the upcoming budget.

2 COMMENTS

  1. Mr. Bilal Hussain

    It s reallg good to see u raised this concern. Please expedite this request to some government official so that necessary action could be taken immediately as this is impacting on sales of Honda and Toyota. I will be very grateful to you

    Raza MD

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