Islamabad June 18 2021: Government of Pakistan is considering to extend incentives to local manufacturers of cars up to 1000cc in the upcoming Auto Policy.
Federal Minister of Finance and Revenue, Shaukat Tarin, today chaired a meeting to consider new Auto Policy. Federal Minister for Industries and Production Makhdum Khusro Bakhtyar, Adviser to PM on Commerce Abdul Razak Dawood and SAPM on Finance and Revenue Dr. Waqar Masood also participated the meeting along with Senior Officials from Industries and Production, Commerce and FBR.
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Auto Financing make a new high
Upcoming Auto Policy is expected to cover cars up to 1000cc, which will help to reduce prices of cars that falls under this segment. This will also help to boost demand of local cars. Finance Minister of Finance and Revenue has assured his full support in this regard.
The aim to introduce a new policy is to provide affordable small cars (850 cc-1000 cc), promote localization 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.
Minister for Industries and Production, Makhdum Khusro Bakhtyar
Earlier, the government in Federal Budget proposes to reduce General Sales Tax (GST) on cars below 850cc to 12 percent from present rate of 17 percent. Besides the government has also proposes to waive off Federal Excise Duty (FED) on this segment which currently imposed at rate of 2.5 percent.
Pak Suzuki Motors is likely to be the major beneficiary as four of its variants including Cultus, WagnorR, Alto and Bolan fall under 1000cc segment. United is the other player that seems to be beneficiary of this new Auto policy.
Car sales below 1000cc recorded increase of more than 33 percent to 71,858 unit of cars since July 2021. Growth of this segment is lower when compared to overall Auto sales which recorded increase of 65 percent with sales of 167,392 units. Cheaper credit availability and strong economic growth were the reason behind these strong Auto sales.
The Minister for Industries also discussed various concessions that could be offered to the Electric Vehicles to increase the number of vehicles imported and install the related infrastructure in Pakistan. Other pending issues like the payment of ACD by the Auto-sector to the Government also came under discussion. The Industry representatives agreed to resolve the issue amicably for its final settlement. The Finance Minister assured of his full support for the final launch of the New-Auto Policy.
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