Non-filer can purchase cars – Auto industry to revive again!

On Tuesday 18 September 2018, after the government’s permission to non-filers to purchase vehicles the stocks of local automakers have gone up.

Both the stocks of Pak Suzuki and Honda Atlas are up by 5%, whereas Toyota IMC’s stocks fell slightly by 0.55%. After the previous government banned non-filers, the sale of automakers was hitting bottom. For example, in August the car sales were down by 18% to 15,389 units sold month-on-month. Moreover, when compared year-on-year, the sales of passenger cars is down by 17%, from 18664 units sold in August 2017 to 15389 units sold this year in August.

It was only in July 2018 that the sales went up by 20% after a consecutive downfall for 4-5 months, then again as mentioned it dropped in August 2018.

The local market was panicking over the non-filer issue, and many industry experts were predicting that the sales of the car will go down even low in the coming months if the government doesn’t take necessary measures.

Read Also: Federal excise duty increased to 20% on 1800cc and above cars

As the government has allowed non-filers to buy cars, it is now expected that this will bring a significant impact on the sales of vehicles leading towards a hike in sales. A local car dealer while talking to said that it is a great step by the government as it will give relief to both consumers and automakers. Let’s wait and see if that is the case.

It is important to note here that apart from Honda and Suzuki, Toyota IMC managed to not only sustain its car sales but also its net profit was up despite the ban on non-filers.

Toyota IMC, in a notice sent to Pakistan Stock Exchange of Pakistan (PSX), has revealed that the company has made a net profit of 21.31% to PKR 15.77 billion in the second quarter of the current Fiscal Year that ended on 30, June 2018.

Aside from Toyota, the net profit of Honda Pakistan was down by 50% to PKR 1.050 billion in the last quarter. And the net profit of Pak Suzuki also dipped to 43% to PKR 394 million.

So, lifting the ban will give more relief to local automakers especially Honda and Suzuki.

Stay tuned for the latest updates.

Notable Replies

  1. aa78 says:

    There should be simple method to benefit the tax filers. Their orders should take priority over orders from non-filers. Until the time the booked car is delivered within one month for each car model for both filer/non-filer, tax-filers should get priority in deliveries. Any excess capacity left after delivering all outstanding tax-filer orders can be used to serve non-filer orders.

    This won't be palatable to many people but neither is this mini-budget leniency palatable for tax-filers.

  2. Those who love PTI will still defend this atrocious decision. Pressure from auto sector was unbearable for New selected government.

  3. Moment of silence for those 'suckers' who became filers. They will be squeezed further whilst tax chor mafia roams around free

  4. Lifting this ban will only help continue the "Own" system we have here in Pakistan. As basitali87 pointed out, this was not an important factor in the decrease of demand. More likely, the multiple price hikes due to dollar price increase were the main cause.

    With this ban, something was finally being done about the "Own" mafia. The big three car manufacturers are taking Own in their official franchises. The government should at least levy heavy taxes on buying multiple vehicles and try to control this.

    But sadly the government seems to favor these same three car manufacturers not only by lifting this ban (which would have made booking multiple cars much more difficult for the "Own" mafia) but also by making it even more difficult for a middle-class citizen to buy an Imported Japanese car by increasing the already dumbfounding restrictions on imported cars.

    Now the big three don't have to worry about competition and they can keep making the same cars for another decade or so.

  5. Yeah there's definitely something else going in there too because IMC has the largest non filer customer base among three as well.

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