Car prices to go down by as much as Rs230,000: Khusro Bakhtiar

Car prices to go down by as much as Rs230,000: Khusro Bakhtiar

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Islamabad: Federal Minister of Industry and Production Khusro Bakhtiar said on Wednesday that the government has taken measures to promote the auto industry by reducing car prices up to 230,000 rupees and increasing production to 500,000 by 2025.

At a press conference hosted by Federal Information and Broadcasting Minister Fawad Chaudhry, he stated that production will increase to 300,000 vehicles this fiscal year and to 500,000 vehicles by 2025.

The minister referred to the auto industry as a potential job creation and said that every car produced in the country creates jobs for at least five people.

He said incentives have been provided in the ‘Meri Gari Scheme’ to make small cars financially affordable for the middle class.

The minister reminded the people that the government had removed Federal Excise Duty (FED) and Additional Customs Duty (ACD) on locally manufactured cars of up to 1000cc in the 2021-22 budget.

“This government’s intervention will significantly reduce the prices of all cars. The manufacturers have promised to pass on the impact of the reduced tax regime to customers immediately,” he added.

Khusro stated that for cars below 850cc, the price of the car is expected to be reduced by Rs 104,458 to 142,388, for cars with 1001-1500cc, the price will be reduced by Rs 112,118 to 186,375, and the price of cars in the 1800 cc and 29 cubic centimeter categories will be reduced by Rs 169,958. Applicable For 2000cc cars.

He said that the government has also lowered the sales tax on locally made cars, and at the same time lowered the import duties and taxes on small cars (CBU) to bridge the gap between supply and demand that would also lead to lower prices.

Khusro stated that the automobile industry is one of the country’s main industrial sectors and has the potential to promote the country’s entire economic development. Its share in large-scale manufacturing (LSM) is about 7.81%.

He said that the government intends to promote the localization of auto parts in the country, with the purpose of creating jobs, promoting downstream industries, and saving foreign exchange.

“A condition of 30% value addition has been introduced on imported raw materials and components to be used for manufacturing of vehicles in the country and to ensure rapid localisation, the government shall update the localised manufacturing of auto parts every six months,” he said.

The minister said the government has introduced measures to reduce the issue of “On Money”, adding that the government would charge from Rs50,000 to Rs200,000 tax where the first registration is not in the name of the person who booked the vehicle, while it would also impose compulsory payment of KIBOR+3% mark up by manufacturers on delivery beyond 60 days.

In addition, maximum upfront payment on booking would not exceed 20% of the invoice value at the time of booking.

He said to improve and ensure road safety, international safety measures like brakes, steering, tyres, lighting, safety belts, airbags and collision would be met.

He further said 17 such shortlisted regulations would be implemented in a phased manner over a period of three years.

Khusro said the export targets for the manufacturers would be up to 10% of the import value by the end of five years of this proposed policy.

He said a higher number of electronic vehicles in the local market would encourage auto companies to invest in related infrastructure in Pakistan to facilitate such vehicles.

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