LAHORE: Premiums on new cars have been reduced up to 70 percent over the last few months due to an increase in the import of used/reconditioned cars, The Post learnt in a survey Wednesday.
The demand for used/reconditioned cars increased after the announcement of the 2005-06 fiscal year budget in which the government reduced import duties on the complete built units (CBUs) in an effort to meet the local demand for cars by reducing delivery time and eliminating premiums on instant delivery.
A dealer at Jail Road told The Post that due to availability of cheap financing facilities, demand for automobiles had increased manyfolds. “It is very difficult for auto manufacturers to meet the demand of the customers which results in high premiums for instant delivery of cars,” he added.
The dealer said that the consumers’ attitude towards booking of new cars has changed after introduction of the new car import policy last year.
Punjab Excise and Taxation Department registered 1,500 imported used/reconditioned cars in the first three months of 2006. The market survey revealed that premium on Suzuki Mehran (800cc) has been reduced to Rs 30,000 from Rs 80,000 while on Cultus it now ranges between Rs 40,000 and 45,000.
The premium on Suzuki Alto has been reduced to Rs 20,000 from Rs 70,000-80000.
There is no premium on Honda City these days. Dealers credited a decrease in the Honda Civic price from 1,250,000 to Rs 1,000,000 for this change. Dealers were charging Rs 80,000 to Rs 90,000 for instant delivery of Honda City a few months ago.
In the case of Toyota Corolla, the premiums on 1.3 XLI and GLI models have been reduced to Rs 30,000 from Rs 150,000.
The car dealers said that the government should force local car manufacturers to reduce cars’ prices as it would create competition in the automobile industry.
“However, negative factors like the premium and delay in deliveries should be addressed separately by introducing appropriate monitoring policies,” they added.
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