The affordability of cars for common consumers in Pakistan has become increasingly difficult. Reports indicate a significant decline in vehicle sales by almost 40% in the current financial year.
Some reasons attributed by industry players to this decline in sales are economic conditions, including the depreciation of the Pakistani rupee against the dollar, soaring inflation rates, and the burden of high taxes. They say these factors have exacerbated the affordability crisis faced by prospective car buyers.
With the purchasing power of the general populace dwindling, the dream of owning a car has become increasingly distant for many. As per reports, there has been an increase in demand for imported vehicles, and a decrease in sales of local vehicles.
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Moreover, there is no possibility of reducing the tax on vehicles in the new budget as well. A major contributing factor to this phenomenon is the discrepancy in tax rates between Pakistan and neighbouring countries. While local vehicle taxes range from 35 to 45%, neighbouring countries impose significantly lower tax rates of 15 to 20% on cars.
While there have been efforts to promote alternative modes of transportation, such as e-vehicles, sources say the progress has been slow. Although e-bike plants have been established, their demand and production remain low due to their high price.
In light of these developments, Asim Ayaz, spokesperson for the Engineering Development Board, has emphasized the need for a forensic audit of car imports to better understand the dynamics of the automotive market.
As Pakistan navigates the complexities of its economic landscape, the issue of car affordability remains a pressing concern, requiring concerted efforts from policymakers and industry leaders to find sustainable solutions and ensure equitable access to transportation for all citizens.
