Overview
Luxury items including cars receive back-to-back shocks from the government and causing a decline in car sales. On the other side, the SBP did not take serious action to approve LCs which cause delays in production. Budget-friendly car purchases become very difficult in the current situation. But with the recent addition of 25% GST under the SRO 297 (1)/2023, the Federal Board of Revenue considers 1400cc and above cars for a new tax. Meanwhile, it does not work like this and affects Peugeot 2008 price also.
Under the spotlight of new tax imposition, Suzuki will offer cars at the current price because their locally assembled car below 1400cc engine. Pak Suzuki is known as Japan’s small engine locally assembler in Pakistan. And it gives a big benefit to the customer right now. However, the purchase of sedans, SUVs, and CUVs is far away from customer purchasing power.
Automakers report a huge decline in sales during recent years. The upset economic condition makes trouble for them to manage car costs at previous rates. The smooth import of CKD kits is necessary to continue the production work routine. Locally assembled cars affected since the State Bank of Pakistan announced makes LC’s approval difficult. Toyota mentioned in its recent sale break report that sale is affected due to the restrictions on CKD kits import.
Budget-Friendly Cars After 25% GST
The government has imposed 25% GST on luxury cars and Suzuki cars are exempt from it. Suzuki Alto was the top-selling car in Pakistan. Suzuki has received record-breaking sales of Alto after its launch. But the recent months affect the sale of Alto and Suzuki reported the company sold only 44 units of Alto in January 2023 and sold 544 units in February 2023.
The recent hike in sedan prices might convert the customer’s attention to Suzuki cars and the company will back to the position of good sale record.
Suzuki Alto, Wagon R, Suzuki Cultus, and Swift are low-engine cars available at a low rate compared to the current price announced after the new GST.
The previous change in General Sales Tax from 17% to 18% affected the Suzuki car prices and we have mentioned the prices after a 1% increase in GST in our blog.
Conclusion
The ongoing situation shows the government is not in favor of automotive industry. As they never take any step for improvement. Automakers face a huge decline in a sale which also cause losses of huge jobs. Due to the non-productive day, companies are not able to fulfill the wages. All the circumstances make automakers and buyers suffer. The only brand-new option in budget-friendly car option for customers without paying an additional 25% tax is the Suzuki cars. And it is until the company has announced any price hike due to economic changes.
