Pakistan’s once-flourishing automotive industry now has hit a decline. Car prices are sky-high now, and demand has plummeted due to affordability!
What is important here is to ask ourselves and the manufacturers why cars are increasingly impossible to own. Furthermore, why are brands increasing prices consecutively every few months?
There are several potential explanations for why prices are soaring. We listed three key reasons for sharing it with you!
1. Rise In Taxes
One of the main reasons for anything’s price rise is mostly due to the rise in taxes. Here there are two forms of taxes, one on imported car parts and the other on local ones.
Just 60,862 cars were manufactured (to date) during the first six months of the new fiscal year (which ends in June 2020), and some 50,097 units were sold. Whereas 113,494 were produced in Pakistan during the same time last year, and 104,038 were sold.
Since most parts have to be imported, with an increase in taxes and other factors, it becomes super expensive to assemble a car in Pakistan.
2. Customs Duty On Imported Cars
Because of the extremely poor quality of local cars and the safety features next to none, many individuals opt for car imports. It’s important to add here that importing cars means you have more car options to choose from the global markets.
After Tehreek-e-Insaf came to power in Pakistan when Imran Khan became prime minister, the government raised customs duties to a whopping 30 percent! In addition, customs duties on New Sport-Utility Vehicles (SUVs), New All-Terrain Vehicles, New Cars, and Jeeps 1801cc-3000cc, New Cars and Jeeps above 3000cc, New Cars and Jeeps Above 2000cc, New Cars and Jeeps Above 2500cc and All Other Vehicles increased from 50-80%.
3. Too Many Stakeholders
An imported car in Pakistan does not leave the port and will automatically end up at its designated dealer. The car is passed through different people in the designated city or area until it enters a dealership. As the car is passed on, its price increases, hence when a real buyer decides to buy the unit; it becomes costly.