GST increase sets car market ablaze, consumers to foot bill

LAHORE:  In the wake of Toyota Indus Motors and Lucky Motors’ decision to hike car prices, Honda, Hyundai, DFSK, and Sazgaar have followed suit. The reason behind these upward price revisions is the Federal Board of Revenue’s (FBR) recent increase of sales tax to 25% on completely knocked-down (CKD) units, a change made through an amendment in the Sales Tax Act (1990) via S.R.O. 297(1)/2023.

Honda’s Prices 

The new prices for Honda are as follows: 

This marks the fourth price increase that Honda has introduced this year. The previous price increases came on January 23, February 4, February 17, and March 14. Honda’s cars are now 58% more expensive when compared to March of last year. The 58% difference amounts to a difference of Rs 2.5 million. 

Hyundai’s Prices 

The new prices for Hyundai are as follows: 

This marks the fourth price increase that Hyundai has introduced this year. The previous price increases came on February 1, February 22, February 28, and March 13. Hyundai’s cars are now 41% more expensive when compared to March of last year. This 41% difference amounts to a difference of Rs 2.5 million.

DFSK Prices 

DFSK has increased the price of the Glory Pro by Rs 490,000 from Rs 6.5 million to Rs 6.99 million.  The change amounts to a difference of 7.54%. The Glory Pro is now 39% more expensive when compared to its Rs 5.04 million price tag in March 2022. The price increase amounts to an upward revision of 39%. 

Sazgar’s Prices

The new prices for Sazgar are as follows: 

Of Sazgar’s portfolio, only the BJ40 has been in the market for over a year. The BJ40 has increased in price by 46% from March 2022 to March 2023, for a whopping increase of Rs 3.5 million. 

No respite ahead 

It should come as no shock to automotive customers at this point that these price increases may not be the last for this year. It is likely that these price increases have not factored in the recent round of depreciation the Pakistani Rupee has experienced against the US Dollar as the price notifications only attribute the decision to the FBR’s S.R.O. 297(1)/2023. If the Rupee stabilizes at a level upwards of Rs 280 against the US Dollar, then it is likely that these prices will increase further in the very near future.