Car Price Increase in Last 1 Year

Car Price Increase in Last 1 Year 1

Car prices in Pakistan began to see a rapid increase since December 2017 when Pak Rupee which for long hovered at around Rs 104 started to decline against the US Dollar. Subsequently prices of local assembled as well as imported vehicles sold in the country were revised quite frequently.

Related: Car Price Comparison: December 2017 vs January 2020

A nearly 40% increase in prices started to cast negative impact on car sales. For the first time after 6 years automobile sector recorded decline in sales which dropped 8% to 237,950 units in fiscal year 2019.

Car Price Increase in Last 1 Year 2

But things started to go from bad to worst ever since the beginning of this fiscal year. It all started with the ban on purchasing new cars by non-filers which constitutes nearly 60% of car buyers in the country. Later the government announced that non-filers of tax return can register only one vehicle against their CNIC. Then the government imposed Additional Customs Duty (ACD), Additional Sales Tax (AST), Federal Excise Duty (FED) ranging from 2.5 to 7.5% depending on engine displacement and the turnover tax which hampered the sales quite badly.

Related: Local Assemblers Again Show Reservations on Import of Used Cars

This was coupled with constantly increasing car prices even when the Rupee was stable & in fact recovered by 6% between August and December 2019. Today the Rupee values nearly the same against the US Dollar as it was in June 2019 (Rs 164), & is currently being traded at Rs 165.5. But if we compare car prices from a year ago, there is a substantial difference. Refer to the table below:

CarJuly 2019June 2020Price Difference
FAW V21,499,0001,574,00075,000
FAW X-PV Dual A/C1,174,0001,269,00095,000
FAW X-PV Standard1,114,0001,209,00095,000
Honda City 1.3 M/T2,309,0002,389,00080,000
Honda City 1.3 P/T2,489,0002,574,00085,000
Honda City 1.5 M/T2,369,0002,459,00090,000
Honda City 1.5 P/T2,539,0002,629,00090,000
Honda City 1.5 Aspire M/T2,539,0002,629,00090,000
Honda City 1.5 Aspire P/T2,699,0002,789,00090,000
Honda Civic 1.8 CVT3,499,0003,649,000150,000
Honda Civic 1.8 CVT Oriel3,749,0003,899,000150,000
Honda BR-V CVT2,949,0003,239,000290,000
Honda BR-V CVT-S3,099,0003,399,000300,000
Toyota Corolla 1.6 Altis3,149,0003,309,000160,000
Toyota Corolla 1.8 Altis M/T3,299,0003,479,000180,000
Toyota Corolla 1.8 Altis CVT3,499,0003,679,000180,000
Toyota Corolla 1.8 Altis Grande M/T3,499,0003,679,000180,000
Toyota Corolla 1.8 Altis Grande CVT3,699,0003,899,000200,000
Toyota Fortuner 2.7 Petrol7,999,0008,399,000400,000
Toyota Fortuner 2.8 Diesel8,649,0009,149,000500,000
Toyota Hilux Revo 2.8 V6,249,0006,549,000300,000
Toyota Hilux Revo 2.8 G A/T5,899,0006,199,000300,000
Suzuki Ravi941,000999,00058,000
Suzuki Bolan1,050,0001,099,00049,000
Suzuki WagonR VXR1,540,0001,605,00065,000
Suzuki WagonR VXL1,625,0001,695,00070,000
Suzuki Cultus VXL1,855,0001,865,00010,000
Suzuki Cultus VXL AGS1,975,0001,985,00010,000
Suzuki Swift DLX M/T1,905,0001,995,00090,000
Suzuki Swift DLX A/T2,050,0002,140,00090,000
Changan Karvaan1,299,0001,339,00040,000
Car Price Increase in Last 1 Year 3
Unsold units of Honda Civic & City standing at the factory premises

Auto industry had forecasted to increase its sales to 0.3 million by 2021 and half a million units by 2022; however from the looks of it, the sector is far from achieving this goal. So far in the 11 months of this fiscal year, automakers in Pakistan have assembled only 89,284 cars compared to 196,415 units in the same period of previous year. Sales have witnessed 50% to up to 80% reduction in various vehicle segments.

Related: Auto Sector Demands Tax Reduction

The latest blow to the local auto industry was the COVID-19 pandemic for which the industry was never prepared. Due to lockdowns the assemblers had to shut down the plants towards the third week of March for almost two months which severely dented the production schedules, vehicle sales & deliveries. For the first time ever, zero sales were recorded in the month of April, whereas in May when the lockdowns were eased, a 75% year-on-year decline in sales was observed.

Car Price Increase in Last 1 Year 4

Local auto assemblers had sought high priority government attention in shape of a stimulus package to deal with the impact of the coronavirus pandemic, however the Pakistan Automobile Manufacturers Association (PAMA) has shown displeasure over the absence of such measures in the recently announced Financial Budget 2020-21 where the government has literally shown a cold shoulder to the auto industry. Automakers & parts manufacturers believe that the automobile industry would face further devastation with lack of government support and revenue generated from the sector would also take a hit.

Related: Future of Auto Industry with No Government Support

Local auto industry has always enjoyed utmost government support ever since, however this will probably be the first time when government hasn’t looked interested in providing even the slightest of relief to the ailing sector. With sales already reduced by nearly 80% what will be the future of local assembled cars in Pakistan, only time will tell. However from the looks of it, the road ahead isn’t going to be easy at all.

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About UsmanAnsari

A 3d animation professional with over 19 years of industry experience, an avid car enthusiast, petrolhead and social media influencer. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com

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Rizwan
Rizwan
Reply to  UsmanAnsari
25 days ago

u mean pro pakistani 😀

Ahmad Nabeel
Ahmad Nabeel
25 days ago

this is insane. in june 2019 $1 was equal to Rs 155 & today its 165 means increase was just 5.6% in last 1 year. but 100% impact of $ rate on car prices, now where does the 70% localization go?

Mian Abrar
Mian Abrar
Reply to  Ahmad Nabeel
25 days ago

good point. ye isi tara hai jesey k aam dukandar Imran khan ko gaali day k 50 ki cheez 100 mai baich day

Ahmad Nabeel
Ahmad Nabeel
21 days ago

auto assemblers are looters here