Govt & Auto Sector to Review Car Prices in December 2020

Government and local auto industry will reportedly review the prices of local assembled vehicles in December 2020, keeping in view the rising prices and customers’ concerns before negotiating a new auto policy.

Related: Rising Difference in Motorcycle & Car Prices & the Need to Fill the Gap

According to Chief Executive Officer of Indus Motor Company (IMC) Ali Asghar Jamali, since the major impact on prices of vehicles was from taxes imposed by the government, any relief in taxes would ultimately result in a reduction of prices. He said:

“We have submitted our proposals to the government for tax rationalization in the auto sector. Removal of federal excise and additional custom duties can help the industry reduce prices.”

According to Jamali, the concerned ministries have agreed to review the taxes in December, when the government and auto industry would be renegotiating the Auto Policy 2016-21, which expires on 30th June 2021.

Related: Are Local Assembled Cars Really Dependent on Dollar Rate?

In is pertinent to mention that car prices are being frequently revised in recent years with prices now almost 50% more than what they were a couple of years ago. Local automakers have revised the prices of their products for 3 times since the beginning of this calendar year alone. And while the industry blames added taxes & forex fluctuations as the primary reason for price hikes, we have seen recently that despite the currency recovered its value with no additional tax being imposed; the prices were revised by considerable margins.

Toyota and Suzuki have already revised prices of certain products during October 2020

Furthermore prices of cars were given a major push during the COVID-19 lockdowns in April, when production & sales were at a complete halt and plants weren’t operational. What will be the outcome of the negotiations between government & auto sector regarding car prices, we will have to wait to find out.

Do you think prices of local assembled cars will be reduced in future? Let us know with your feedback.

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