Toyota, Suzuki and Kia share new prices
Car companies Toyota, Suzuki, and Kia have reduced car prices following the reduction in duties and taxes. The highest change is 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 hatchbacks 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 up to Rs89,000.
The government has 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 custom duty (ACD) 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%.
“The tax is paid by customers so the companies will have nothing to lose,” Research Analyst Taha Madani told SAMAA Digital.
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.
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 custom duty (ACD) has been removed on cars below 1000cc and reduced to 2% to cars above 1000cc. ACD was 7% on all cars.
Industries and Production Minister Khusro Bakhtiar said on July 7 that additional customs duty was 7% and the carmakers made the customer pay it, according to the minister. They spoke to the big three — Toyota, Honda and Suzuki — and the carmakers will return the money.
“Now the ACD is 0% on 1,000cc and 2% for above 1,000cc,” he announced, adding that it has been approved by the cabinet.
The auto sector plays a 10% role in large-scale manufacturing, according to the minister. Last year, it manufactured 164,000 cars and aims to produce 300,000 next year.
“It is a sector of Rs1,200 billion and pays Rs350 billion in taxes,” he said. “We have to go towards exports.”