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Proton reduces car prices in Pakistan

Company is selling a sedan Saga and an SUV X70

SAMAA | - Posted: Jul 16, 2021 | Last Updated: 2 months ago
Posted: Jul 16, 2021 | Last Updated: 2 months ago

The Malaysian company Proton, which has introduced two vehicles – a 1270cc sedan Saga and 1500cc turbocharged X70 crossover SUV in Pakistan has reduced car prices following reduction in duty and tax,

Other car companies Toyota, Suzuki, Honda, Kia and Changan have already reduced car prices following the recent steps taken by the government.

The Proton Saga has three variants – standard manual, standard automatic and premium automatic. It is dubbed as the cheapest new sedan in Pakistan. X70 has been introduced in two imported variants – Executive AWD and Premium FWD.

The company has reduced Saga prices by Rs50,000 and now its cheapest variant will be selling for Rs1.925 million. The X70 prices has been reduced by Rs100,000. Its standard variant will now be selling for Rs4.59 million.

The highest change as the car companies reduced car prices in the country was seen in the Toyota Fortuner VVTi, which has seen a price decrease of Rs400,000. Previously the SUV was selling for Rs9.3 million. It can now be bought for Rs8.9 million. Hilux Revo all variants saw a price decline of Rs120,000. 

Yaris and Corolla variants saw a price decline between Rs100,000 and Rs120,000.

Suzuki’s top selling car Alto price has been reduced by Rs85,000 for its lowest variant to Rs112,000 for Alto’s top variant. Alto’s standard variant can now be bought for Rs1,113,000. Wagon-R saw the biggest price decline for the company with Rs130,000. 

Kia has reduced Picanto’s price by Rs118,000. The hatchback’s basic variant can now be bought for Rs1,781,000. Kia Sorento’s top variant saw a price decline of Rs196,000. The SUV can now be bought for Rs8,203,000.

DFSK Glory SUV prices have also come down by Rs89,000.

Honda reduced Civic’s Turbo variant price by Rs135,000. The sedan’s new price is Rs4.56 million. The other two Civic variants price have been reduced by Rs115,000. Civic 1.8 and Civic 1.8 Oriel will now cost Rs3.61 million and Rs3.86 million, respectively. BRV’s price has been reduced by Rs105,000; its new price is Rs3.37 million.

Related: Honda and Changan reduce car prices in Pakistan

Changan Alsvin variants price have seen a price decrease of around Rs60,000. Alsvin’s top variant Lumiere is now priced at Rs2.59 million; two basic manual and automatic models are priced at Rs2.15 million and Rs2.4 million, respectively.

The minivan Kaarvan variants price has been reduced by Rs100,000. Karvaan Plus is now priced at Rs1.54 million and the basic model is priced at Rs1.4 million.  

Related: Looking to buy a car? Pakistan companies have reduced prices

Why have the prices been reduced?

The government decided to reduce the Federal Excise Duty on all vehicles even above 1,000cc by 2.5%. Sales tax has been reduced on vehicles below 1000cc from 17% to 12.5%.

Meanwhile, 7% additional customs duty has been removed on cars below 1000cc and reduced on cars above 1000cc to 2%.

A 2.5% FED was applied on cars below 1000cc; 5% was imposed on cars below 2000cc and above 1000cc; and 7.5% on cars above 2000cc. All these categories will now see a price decline of 2.5%.

This means 1000cc and below cars will have no FED. Cars above 1000cc but below 2000cc will have a FED of 2.5%, and cars above 2000cc will have a FED of 5%.

Initially, Finance Minister Shaukat Tarin had announced that the government has removed 2.5% FED on 850cc cars. Sales tax, too, was reduced from 17% to 12.5%.

The decision was taken to reduce the prices of cars in the entry-level segment. This segment is assumed to entertain middle and lower-income groups. 

Also read: How much can a Careem driver earn in Karachi?

Later, it was announced that the duty and tax reductions were extended to 1000cc cars. Now finally, FED has been reduced on all cars.

Additional customs duty has been removed on cars below 1000cc and reduced to 2% to cars above 1000cc. ACD was 7% on all cars.    

What about used cars?

A car dealer at Khalid bin Walid Road Mohammad Shah, said that the used cars’ value will also go down but it will not reflect precisely the change that have come in cars prices. “The used cars’ value is already depreciated,” he said.

“If a new car’s price has decreased by Rs100,000. The same car of an only model will see a decrease of Rs50,000 on average. But it will also depend on the car’s year of make too,” he said.

Why is there a bigger change in prices of Japanese companies?

The Additional Customs Duty (ACD) put by the government was contested by the new entrants, said a company official of a new car company.

“The new car companies that came after Auto Development Policy 2016-21 contested the ACD because government promised it will not change anything in the industry during the period.

So, when it imposed ACD, we contested it and were not paying it. So, removing ACD doesn’t have any implications on new car companies,” the source explained.

Will the price be reduced for people who booked cars before July?

The people who have booked cars above 1000cc before July will benefit from the reduction in FED, according to a Toyota car dealer.

But according to a Suzuki car dealer, the people will get the benefit of FED reduction but they will not get the benefit of Sales Tax reduction since ST gets paid to FBR when a car is booked.

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