Imported Cars That Are Launched For Nothing

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We have a small variety of cars available in Pakistan that are assembled locally. In fact we shouldn’t be using the word ‘variety’ at all, since all what we get is a handful of options offered to us by three dominant players that never rival another in terms of price or segment.

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However the same automakers responsible for putting together CKD components to be able to sell these cars in our country have some imported cars offered under their portfolio too. But due to outrageous import duties, which are in fact placed to protect the local industry, the prices of these imported cars are beyond the limits of sanity.

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Still automakers launch these expensive imported cars in Pakistan which are otherwise considered rather ordinary everywhere else in the world. These cars barely serve any purpose and remain standing at the showroom floors. Some of these imported cars offered by local automakers that never really contribute to sales are listed below:

Toyota Prius PKR 92.7 lac
Toyota Rush PKR 58.4 lac
Toyota Camry PKR 1 Crore 86.3 lac
Toyota Land Cruiser VX PKR 5 Crore 26.5 lac
Honda CR-V PKR 1 Crore 7 lac
Honda Accord PKR 1 Crore 19.99 lac
Hyundai Ioniq PKR 63.99 lac
Hyundai SantaFe PKR 1 Crore 85.0 lac
Suzuki APV PKR 34.6 lac
Suzuki Jimny PKR 39.9 lac
Suzuki Vitara PKR 55.5 lac

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Most of these cars don’t even sell a dozen units in the entire year. However a few including Suzuki Vitara, Toyota Rush etc were seen in limited numbers but that too were sold initially when the cars were newly launched. Later on, hardly any unit was able to find buyers in decent numbers.

Related: 10 Viable Cars Yet to be Introduced in Pakistan

Some of such imported cars that failed to create any impact were discontinued after a brief stint including the Suzuki Kizashi, Honda CR-Z Hybrid, Honda HR-V, Toyota Avanza and most recently the Suzuki Ciaz which wasn’t too expensive after all, but Pak Suzuki’s lack of interest in this car was the primary reason behind its demise.

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We believe there is no point in imposing outrageous duties on these cars which are considered rather ordinary everywhere else. For example, how much a government will earn from a PKR 1.07 crore Honda CR-V (in duties & taxes) when not even a dozen units are sold in the entire year. Contrary to this, if duties are reduced and CR-V is priced around 7 million will bring exceptional results and with sales even as low as 50-100 odd units a month can bring loads of revenue in shape of duties, taxes & registration etc to the national exchequer. It is beyond understanding that how much a PKR 1.07 crore CR-V that keeps standing on the showroom floors is beneficent for the consumer or the auto industry or the government treasury?

Related: Hyundai Pitting PKR 64 Lac Ioniq Against PKR 83.7 Lac Prius

According to FBR, the auto sector has shown decline of 39% in income tax and 28% in sales tax, when compared with data from last year. Only Rs 47 billion has been collected during July-January (2019-20), against expected collection of Rs 88 billion, resulting in budgetary loss of more than Rs 40 billion.

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Furthermore as pointed out by CEO of Kia Lucky Motors Mr Asif Rizvi, the government should focus on enhancing the production volumes. Charging

small amount of taxes on larger volumes ensures generating healthy revenue rather than imposing heavy taxes on an already small volume
0
Do you think government should charge small amount of taxes on larger volumes rather than imposing heavy taxes on an already small volume?x
, as a result of which the sales have further declined giving a major blow to the revenue.

Related: Hyundai Santa Fe for PKR 18.5 Million- What Else Can You Buy?

In addition to redefining polices related to local assembled vehicles, the government should also consider reworking on the import policy because it might help them generate good revenue in form of duties & taxes and registrations etc. Besides, as most people argue, if assemblers need to import everything including CKD kits to engine & transmission etc to just put them together here, why not simply open up the imports? According to the Chairman All Pakistan Motor Dealers Association, H.M. Shahzad:

The government wants to control foreign exchange outflows by restricting car imports. But it should also do something about $818m that local assemblers spent on importing completely and semi-knocked down kits in 2018-19.

What is your opinion regarding the prices of imported cars in Pakistan? Let us know with your comments.

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Edit: prices updated in August 2020

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DR. Rizwan
6 months ago

a very good article. I cant understand how these companies dare to launch vehicles with this price tag.

Hasan
Reply to  DR. Rizwan
6 months ago

Driving showroom traffic is really costly, especially with the limited range and often obsolete offerings by OEMs in Pakistan. Therefore these CBU’s have been very effective in doing just that. No amount of billboards and commercials can drive me to a Suzuki Showroom but both Vitara and Jimny made me go there. Same is the case with Ioniq. Usually large dealers would stock just one unit. After a year or so prices start to look attractive at their year old level in contrast with the new prices in the market or the car company will push with big discount. Either… Read more »

TiredOfThisShit
6 months ago

These assemblers only buy non-technological parts like nuts bolts plastics locally. If a car needs 4 screws which are procured locally and one engine which is imported as total parts count, BAMMM! that is 80% localization right there. The incompetent people at EDB and MoI&P which are hand in pocket with these assemblers should give weightage to each item depending on involved technology so that any one aspect cannot cross a certain threshold. E.g. weightage of screws should not cross 1-2% of a car. Similarly, all injection moulding based plastic parts should not cross 3-5% of total part weightage as… Read more »