Staff Report
KARACHI: A major car assembler has followed in the footsteps of two major manufacturers and raised the prices of its models, sources told Daily Times Friday.
The prices of Honda Citi 1300cc (DSI manual) and (automatic) have been raised from Rs 887,500 to Rs 907,500 and Rs 947,500 to Rs 967,500 respectively.
The price of Honda Civic (manual) has been raised from Rs 1,387,500 to Rs 1,417,500 and that of prosmetec from Rs 1,427,500 to Rs 1,457,500.
The price of Honda VTI Oriel has been raised from Rs 1,527,500 to Rs 1,557,500 and that of VTI prosmetec from Rs 1,566,500 to Rs 1,597,500.
Pak Suzuki Motor Company Limited and Indus Motor Company had raised prices of their products on Saturday last week and attributed the rise in prices to the falling value of rupee against various currencies and rising steel prices.
The price hike was also attributed to the imposition of 35 percent LC margin and increase in interest rates by central bank, which, it was said, had created cash flow problems for the industry.
The car sales continue to decline although the government had restricted the import of used cars to units, not older than three years.
When the government had imposed a five percent withholding tax on purchase of new locally cars, the assemblers had voiced their concerns and said it would hurt their sales because of increased prices.
They got the tax rate brought down to 2.5 percent. Eventually they got the tax suspended by the authorities in February for two months on the pretext that it had hit their sales. However, as soon as the tax was suspended they started raising their prices, virtually denying the benefit of tax suspension to the buyers. The tax suspension, which was initially granted for only two months, has been extended till the end of this fiscal year.
Mr Shehzad, chairman All Pakistan Motor Dealers Association (APMDA), strongly criticised the raise in the price of different brands of the company and said that this has been third increase in last two months (April & May) by the company.
H M Shahzad, said, “if the dealers were allowed to import used vehicles upto seven year, the government can get Rs 30 billion revenue per year.” “In 2005-06, the dealers have paid Rs 41 billion revenue to the government.