Why Car Prices Are Higher In Pakistan

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Why Car Prices Are Higher In Pakistan

In Pakistan, from last few years there is no increase is seen in the collecting of taxes, but the government is still increasing the ratio of taxes in every budget. The import policies are showing the same results. As far as the automobiles industries are concerned, they are angry with the government because of the changing behavior of the government upon the import policies and tax policies of auto mobiles and because of that the automobiles industry is bearing loss. Government has also changed the policy of importing 3 years old cars and made it to 5 years old cars. Approximately 4000 used cars are imported in Pakistan every year and the dealers have told that the import ratio has decreased after implementation of new government policy. They also said that, if government changes its recent policy then they can import 7000 to 8000 cars per year and the government has changed the policy at that time when they have invested billions of rupees in foreign market. However the real truth is that Pakistani import policy is the most liberal in this continent. According to the recent estimations,

Duty Charges:
The duty charges details of cars are given below.

  • 50% duty charges for 800 cc cars
  • The duty charges are 55% on 801cc to 1000 cc
  • The duty charges are 60% on 1000cc to 1500cc
  • 75% duty charges are levied on all cars. But In India, situation is totally different on this policy.

India has applied 100% duty charges on all types of vehicles. However Pakistan also fixed the import duties on different type of papers like:

  • $ 2816 import duty charges on 1800 cc cars
  • $3520 charges have levied on 801cc to 1000cc
  • 1001cc to 1300cc has $7040 duty charges
  • 1300cc to 1500cc has $9856 duty charges
  • 1601cc to 1800cc has $11968 duty charges
  • 1601cc to 1800cc engine capacity used cars have $14784 duty charges.

Automobiles Industry is important for country’s economy and especially when country’s resources are a few.
Some importers think that FBR does not adopt such type of policies which are necessary in under developed countries like Pakistan. Pakistan trade policy is almost liberal, but according to the new schemes are introduced, the trade policy is not that much liberal. According to these importers this new trade policy will get the car prices very high. According to them the import tariffs on used cars are lower compared to India and Thailand as they are providing many benefits to the local auto manufacturers. But however the new import policy of used cars in Pakistan is still liberal because many importers are misused this policy by Baggage Scheme. It is a real fact that many cars which are assembled in Pakistan are move from Dubai by transfer of residence or gift proposal. This proposal leads a misconception among Pakistani import market. One other reality is by introducing the new policy used car prices are higher but locally manufactured cars have lower prices. For example the price of five years old Suzuki Alto with an engine of 650cc sold in the local market at Rs.750000 but customers could buy new locally made Coure with 800cc engine at Rs. 780000. Similarly the five year old Toyata Vitz of 1000cc engine has sold in the market at Rs.950000 to 1 Million but, the locally manufactured Suzuki Cultus price is 890000.
Conclusion:
The locally cars or vehicles that are available in Pakistan are much better than used cars from foreign markets. If the government makes reasonable policies for local auto manufacturers then we don’t need to assemble the used cars from foreign Markets. But however it is also a fact that the locally manufacturer automobiles are not so good because they lack many qualities by default like their lower engine capacities, cheap tires and other problems. Similarly when vehicles are made in local markets then their some parts are assemble from foreign markets that’s why car prices are get hire automatically by used of these parts and customers draws their attention to purchase small and lower cars by expensive or new branded cars.

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