Govt to introduce new car financing scheme under upcoming auto policy

New policy to be finalised next month

ISLAMABAD: The government is going to introduce a new car financing scheme with a lower interest rate of 5 to 6 per cent to facilitate customers who are unable to buy a car after major price hikes during the past few years.

According to an official at the ministry of Industries and Production, the government is interested in facilitating the customers of small cars of 850 cc to 1000 cc with reduced interest rate to facilitate maximum buyers. However, the financing facility would also be extended to cars of above 1000 cc. “The rate being proposed for small cars would be around 5 per cent while 6 per cent is being suggested for cars of more than 1000 cc,” the official said.

“The facility could boost sales in the auto industry which ultimately create business and employment opportunities,” he said, adding that the facility was currently being discussed with stakeholders. 

During a recently held meeting on proposed new auto policy, it was informed by Federal Minister for Industries and Production, Makhdum Khusro Bakhtyar, that the aim to introduce a new policy is to provide affordable small cars i.e. 850 cc-1000 cc, promote localisation in domestically assembled cars, produce exportable surplus of auto-parts of 2-3 wheelers and increase the competition in the local market so that people in Pakistan could enjoy better technology at affordable prices.

Apart from the financing facility, the government has also announced reduction in general sales tax (GST) on locally assembled cars up to 850cc to 12.5 per cent from 17pc in the budget 2021-22 followed by exemption of federal excise duty (FED) and value-added tax to give relief to small car buyers. The small car producing local companies especially the Pak Suzuki Motor Company Ltd (PSMCL) will enjoy the concession.

New policy for hybrid cars

According to sources, stakeholders in the auto sector have also agreed to give incentives to hybrid cars in the next policy (2021-26), similar to what has been given to electric cars. Electric vehicles (EV) parts in hybrids are likely to get similar incentives as stipulated in the EV policy.

“The duty relaxation offered for parts of the EVs is being proposed to CKD of hybrid cars too under the new auto policy,” an official at Engineering Development Board (EDB) said.

Earlier through the EV Policy 1 per cent sales tax for locally made EVs up to 50 kwh and light commercial vehicles up to 150 kwh were introduced. Besides, duty on the import of charging equipment was capped at 1 per cent.

Talking to this scribe, Additional Secretary Ministry of Industries and Production Hamid Atique said that the ministry was trying to cover the tax part of the upcoming auto policy which is to be included in the FY22 budget.  “The remaining part of the policy would be finalised during next month,” he said. 

 

Ghulam Abbas
Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]

78 COMMENTS

    • Jhoot Dhooka, faraib, gheebaat, naap toul ma kami, haram khoree, ghasaab ya sab halal ha arr haram ha tu wo car interest pa lanaa. Wazeefaa pa palnaa walay molviyoo saa sunoo ga tu yahi anjam ho ga jo aj pakistaniyoo ka ha. Bank agar jins means commodity daa tu wo rent latee ha jiss ko jahil sood samajtay hn. 30 lak ki cheez ap ko 4 lak ma dati ha wo khuch nahi

    • Konse ghr mile bank wale form nhe de the k jb tk apki pay bank me na aye as apko form nhe mil skta sb chor bazari hai

  1. Car financing booming. Attention must be diverted towards housing finance. How make housing finance attractive for bankers and public.

  2. Sir, a good scheme,affordable with minimum interest rate for middle category person, please launch immediately under intmation to us

  3. Shame bohat duk hote he Agar madat nai Karsuck te hu kise ku tane nai du Kia pate kise Kia mazbore ha

  4. Very good initiative highly applaude, or ye jo attention diverter comment section me agaye hen believe ye haasideen or mufsideen hen. Imran khan zindabad pakistan zindabad

  5. Wouldn’t it make more sense for government to strictly ask car manufacturers to reduce the cost of cars so people don’t have to pay 5 to 6 percent extra

  6. It would disturb the balance of payment.It would hike the petrol export leads further economic debt. Secondly, there is also traffic obstacles due to use of private transport consequently leads economic sink considerably. Furthermore, environmental pollution due to transport can’t be ignored. The policy could discourage environmental cleanliness and traffic hurdles can be resulted by hiking private transport.

    • Khud tu 3 rakhi hon gi…..
      Kisi dosry ka bhala hota dhek kar environmental pollution yad agai apko……
      Kitny he easy log hain jo gari mehngi hony ki waja sy nai ly sakty…..
      Lakin onhy zarorat boht hoti ha kam k silsaly mai…..

  7. Hahahahaha Humarey mahsrey la yahi tu kasoor ha hum har bat pe ak Dosrey see larthy jagrty hain .nakamun ki tara

    • Majority of people won’t buy this policy because it comes with interest & mark up if government is really sincere to facilitate people then they they should come up with plan without interest & mark up policy but it’s not gonna happen as always in this country policies are made for elites not for the sake of common man .

  8. Bhot log Jo achay bhaly hain APNI mjbori btaty hain kam nhi ha Ghar khany k liay Kuch nhi ha madad Karin main ny usi time job karny Ka kha bhag jaty hain kam nhi karty managny Ka kam psand ha ap bhoky ko Khana khala dain kis Ka kam nhi ha us ki kam dila dain ap k janny walon main ager koi muskil main ha ap kud us k managny sy phly us ki koi madad karain

  9. Dear Ghulam Abbas sb,

    As per your article policy is useful from 850 CC to 1000 CC.

    What about the every 660 CC or other family cars below 850 CC ?

    Can these car buyers are also eligible or not ?

  10. Its good step taken by present govt. good opportunities for unemployment .
    i am very excited to join this scheme, i have a very good planing to start new business with help of this scheme ,
    i did MBA (Finance ) i have complete ability to mange the things .
    i am very grateful to present Govt.

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