This is shocking news for the auto industry that the demand for High end and luxury vehicle falling. This is an unexpected situation and also a worrying situation for the auto industry. Because of the demand for luxury vehicles never down because the consumers of luxury vehicles never comprise with price and taxes.
Recently, the government imposed Federal Excise Duty on all vehicles and 5% FED imposed on vehicle below 100cc to 20% for luxury cars above 1800cc but the auto industry said that in the past the high prices and taxes never affect the sales of luxury car because luxury cars consumers ignore the price in front of their demanding cars. But this time the sales of luxury cars falling as compared to previous.
The local auto industry expects that the ban on import of used vehicles will increase the sale of local cars. Because there is no other choice for customers to buying local cars but the devaluation of rupee value against dollar badly affect the local auto industry and the production of vehicles because auto manufacturer import auto parts but in the current situation its too expensive for them under the taxes and dollar strength and all the auto manufacturer increase the prices of vehicles to maintaining the profit according to the cost of sale the cost of sale.
According to the details, auto industry believe that the decline in sale of high-end vehicle will not happened because of the high taxes and high prices of vehicle it happens because they could be traced by Federal Board of Revenue if they have no documentation of income recourse and the people who have no documented income, through the computerized CNICs and going to buy a luxury vehicle FBR might ask from them the source of income.
The new entrants in the auto market said that the parts of their cars are imported and the cost of the vehicle is going to high under the taxes and high dollar rate and as compared to the production the sales is going to down in this situation its difficult to sell their imported vehicles. New entrants are highly concerned about their sales because their models are expensive and to sell their imported vehicles in the local market is very difficult.
The major reason behind the declining sale of a high-end vehicle is undocumented income. The people who are not documented their source of income can buy a luxury vehicle because they have no concern with income tax and previously they ignore FBR. But now the government take strict action against them.
