JAVED MIRZA
KARACHI (June 24 2007): The authorised car dealers of all local assemblers have raised the 'premium' amount on all locally assembled cars ranging from Rs 10,000 to Rs 75,000 per unit following reduction in the capping for imported cars.
The premiums on all locally assembled makes have gone up by Rs 20,000 to Rs 140,000. This also includes cars that were being sold at controlled price or even at discounted rates, industry sources said. The imposition of five percent withholding tax on all local manufacturers through Finance Bill 2007 has been another blow to the masses, as this has taken the cars, which no more is a luxury, even more out of their buying power.
According to details, the premium on Indus Motor Company (IMC, Toyota/Cuore manufacturers) cars has gone up from a minimum of zero to Rs 85,000. The premium on Corolla XLI, which was around Rs 8,000 a day before the announcement of federal budget, has gone up to Rs 70,000.
From Rs 9,000 it went up to Rs 85,000 on Corolla GLI. Corolla 2.OD and Toyota Altis were being sold at discounted rates till June 8, but now a buyer, not willing to wait for at least six months, would have to pay Rs 25,000 to Rs 50,000 as premium. The premium on Cuore has gone up to around Rs 50,000 from Rs 15,000.
The IMC has also raised car prices by Rs 54,000 to Rs 80,000 on all its makes. A buyer who already has booked a car would have to pay the difference at the time of delivery, sources said.
The premium on Pak Suzuki brands has also been increased. The amount on Mehran has gone up from Rs 8,000 to Rs 42,000; Alto from Rs 8,000 to Rs 45,000; Cultus from nil to Rs 45,000; Bolan from Rs 50,000 to Rs 85,000; and Potohar from Rs 70,000 to Rs 140,000.
Atlas Honda brands are not left behind. Honda Civic M/T and Prosmatic, which were being sold at controlled price are now being sold at a premium of Rs 50,000. The amount on Civic VTI Oriel has gone up from Rs 60,000 to Rs 120,000, while Honda City is now being sold at a premium of Rs 20,000.
Pak Suzuki, Honda Atlas and Dewan Motors have not raised the prices of their products yet. However, industry sources said that the revised rate lists of these manufacturers would be circulated by first week of July.
Chairman, All Pakistan Motor Dealers Association, M Shahzad, said that authorised dealers of the assemblers have manipulated the market and set the premiums. He said that the 5 percent WHT on local manufacturers would be an additional burden on the buyers, and added that the government should impose levies directly on assemblers who are fetching over 100 percent profit on each car.
He asked the government to let them know the auto policy for 2008-09 about the capping on imported cars. If the capping on imported cars was to be further reduced in years to come they should be apprised now so that they may inform the investors abroad about the future of industry.
Copyright Business Recorder, 2007