The government has announced tax reductions on locally assembled cars upto 850cc, meaning a drop in car prices. The federal finance minister Shaukat Tarin announced that the FED has been removed, while Sales Tax has been reduced to 12.5% from 17% on these cars. It means, Suzuki Alto, United Bravo and Prince Pearl will become cheaper. Meanwhile, the prices of Suzuki Bolan and Suzuki Ravi have also decreased after the budget. Following are the new expected prices of these cars.
Suzuki Alto:
The old price of Alto VX was Rs1,198,000, and now it will cost Rs1,124,000. Meanwhile, the previous rate of Alto VXR was Rs1,433,000, while its revised price is Rs1,345,000. Lastly, Alto VXL used to sold at Rs1,633,000, however, it will now cost Rs1,530,000.
Price Pearl:
The old price of Prince Pearl was Rs1,149,000, however, it will now cost at Rs1,077,000.
United Bravo:
The previous price of United Bravo was Rs1,099,000, and the new rate will be Rs1,030,000.
Suzuki Bolan:
Suzuki Bolan comes in two variants in local market, i.e., Bolan Cargo Van Euro II and Bolan VX Euro II. The price of Cargo Van was Rs1,075,000, and now it will cost Rs1,010,000. Meanwhile, the previous rate of Bolan VX was Rs1,134,000 and its new price is Rs1,065,000.
Suzuki Ravi:
The price of this commercial vehicle has also decreased significantly. Before-budget price of Suzuki Ravi Euro II was Rs1,034,000, but now it will cost Rs970,000.
Impact on Market:
This will surely make a significant impact on local car market because middle class mostly buy 850cc cars. The earlier reports suggested that the government will reduce the car prices in this budget. However, it is not a norm in the history of car industry in Pakistan as we have never heard that the taxes have been reduced on locally manufactured cars. However, the government have slashed the taxed, resulting in price reduction up to Rs1,10,000.
It means that these vehicles will come in buying power of the consumers, meaning increase in car sales. Meanwhile, the government has not presented any tax relaxation for imported cars, although there were media reports about it. This step means that the government is focusing on local auto market and want the people to buy the local vehicles.
What are your take on this announcement? Do you think that this relief is good for common buyer? Share your thoughts in comments section.
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