Imported cars may not get cheaper even after reduction in import duty

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It is being expected that import duty on cars is likely to by reduced up to 50% for various reasons. Government sources say the actual plan is to make small cars affordable for middle class. It is also said that new tariff will be introduced for 650cc and 660cc vehicles. But the importers believe that the reduction in import duty will not cut down the prices to a reasonable extent.

One of the renowned importers of Japanese vehicles in Lahore, told me that government announced 50% reduction in import duty on hybrid cars in last year’s budget but even after 50% cut off on import duty for Toyota Prius, it is still being sold on the same price. This is due to the increased auction rates of vehicles in Japan.

When the import duties are slashed off, the demand of the vehicles boosts up that leads to higher auction rates of vehicles in auction houses of Japan. For instance, if, before the reduction of import duty, five members participated in the auction then after the import duty was slashed off, the number of participants increases which results in higher bids.

The current import duty on 1500cc hybrid cars is around 6 lakhs. Whereas the import duty on non-hybrid 1500cc car is around 1.2 million, here’s a short (approximate) calculation of Toyota Prius’ cost:

Approximate auction rate= 1.2 million PKR

Freight= 1, 30000 PKR

Transport charges=10,000 PKR

Import duty=60,0000 PKR

Importer’s profit= 10,0000 PKR at least

*the above prices are approximate after conversion from yen to PKR.

Now, the according to the above stated figures, we can see that Toyota Prius Costs around 20 to 21 lakh with current rates and slashed off import duty. Was Toyota Prius available at a higher price before the cut off in import duty? The answer is No.

I wish that my assessment and prediction would be proved wrong in the coming budget but one must be aware of facts from the past.

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13 Comments
  1. Usman Khan says

    Please also mention container charges, port charges, passport charges, custom agents fees. It adds approximately 150,000 more in your calculation..!!

  2. Arif Khan Mahsud says

    Above calculations are wrong.. written by some stupid

  3. Arif Khan Mahsud says

    Book your favourite car at cheaper rate.. before the budget. Pay the new duty after the budget. Contact us
    MyWheels Import
    PAKISTAN
    http://www.facebook.com/mywheels.jp

  4. Shaf Younus says

    Brother you are right but the charges you are talking about sums up to 150,000 when you just import one car. Importers operating in pakistan mostly buy bulks of units and the charges you mentioned (except container charges) becomes bargain-basement when you divide the cost of entire unit on each car… 🙂

  5. Atough Mahmud says

    The level of mediocrity in this article is so damn high.

  6. Shuja Ur Rehman says

    Do some actual freaking research before giving wrong info.
    ru freaking kidding me?
    yani japan ki used car market ki mostly garian pakistan ati hain?
    So they manage their prices according to our rates? Fudge!

    Reason is: importers are now bringing newer cars. before the duty cuts they could import 5year old cars. Now they import 3year old cars.
    Newer car ki price japan main OBVIOUSLY ziada hoti hai.

    IN THE END. users are getting NEWER CARS at the same rate.

    Im not at all with the govt but this is what actually happend. Kisi nai apnay importer uncle sai yeh info lay ker article likh mara ho ga.

    Kasamay kiss cheetay nai review likha hai usay digits main commas he nahi dalnay atay.

  7. Osama Nawaz says

    I don't know which stupid person does the hiring and content writing stuff at pakwheels.com….shoot him for me please!!!!!

  8. Nasir Khurshid Ahmed says

    Wrong Calculations Brother…

  9. Shaf Younus says

    Dear brother, import policy for 5 years old car was exempted in last months of 2012 whereas duty on hybrids was slashed off in june 2013.. therefore, 3 year old cars were being imported on full import duty from december 2012 to june 2013. Check the prices of Toyota Prius in these months..! Apko 3 years old toyota prius ki price mein koi considerable diiference nhi mile ga before and after the reduction of import duty..

  10. Fizza Ali says

    This article shows the quality of blogs on pakwheels. Really lame article.

  11. Shuja Ur Rehman says

    It seems u are a car dealer or u dont know what is happening.
    Prices do not change cuz if dealers reduce the prices people will say that they were robbed. So they keep em constant.
    dealers are making a lot of money on cars. 99% are damaged n the are not happy still.
    i did a research on 2011 lexus ct200h. You can get it in lahore between 2.7 to 3.5 million depending on features n auction sheet.
    Dealers are asking for 4-4.5million for them n they bring damaged cars which dont even have an auction sheet. Do the math on their negotiations n profit.
    If you had done sum research n had gone to an importer u'd know what is the benefit for a buyer.
    Cars should be imported by users not dealers.

  12. Shaf Younus says

    SIr, please login to some live auction website and check the auction rates of hybrids before and after the reduction of duty. I've been a part of l
    ive auctions myself..!

  13. Shuja Ur Rehman says

    I think ur a car dealer or u have some relative and you are communicating wrong info.

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