The new auto policy is coming next month, and we are hearing all kinds of rumours. Every auto industry analyst is making their guesses on what will and won’t happen in the new policy. Here’s another one. The government might introduce a new car finance scheme with a lower interest rate of 5 to 6%. If implemented, this step will encourage more Pakistanis to buy cars for their families.
According to an official at the Ministry of Industries and Production (MoIP), the government is interested in lowering the interest rate for small cars of 850cc to 1,000cc to facilitate maximum buyers. Moreover, the new auto policy might also extend this facility for cars above 1,000cc. “The rate being proposed for small cars would be around 5%, while 6% is being suggested for cars of more than 1,000cc,” the official said.
Objectives of The New Auto Policy
Earlier, the Minister for Industries and Production, Makhdum Khusro Bakhtyar, informed the Federal Minister for Finance and Revenue, Shaukat Tarin, that the aim to introduce a new policy is to
- provide affordable small cars (850cc – 1000cc)
- promote localization in domestically assembled cars
- export auto-parts of 2-3 wheelers
- increase the competition in the local market
All this will ensure that people in Pakistan can enjoy better technology at affordable prices. For that, the government has already ended Federal Excise Duty (FED) for cars under 850cc, while Sales Tax has been reduced to 12.5% from 17%. Now, the government is considering extending this tax relief for cars up to 1,000cc. Lowering the interest rate for car finance schemes will be another step in this direction.
Another aim of the new auto policy is to promote Electric Vehicle (EV) technology in Pakistan. Therefore, concessions and incentives for electric and hybrid cars are also under discussion.
Let’s see how many ideas are actually put into action in the new auto policy (2021-26).
