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Category: Automotive

PkRevenue provides stories related to automotive industry. We focus on auto policy of Pakistan. The coverage also includes sales of domestic manufacturing.

  • Car sales slump by 44% in first half

    Car sales slump by 44% in first half

    KARACHI: Car sales have slumped by 44 percent to 67,019 units in first half (July – December) of fiscal year 2019/2020 as compared with 120,066 units in the corresponding half of the last fiscal year.

    Major drop witnessed in the sales of Honda Cars which fell 66 percent to 8,146 units during first six months of current fiscal year as compared with 24,278 units in the same period of the last fiscal year.

    It was followed by sales of Indus Motors which fell by 57 percent to 14,175 units in first half of current fiscal year as compared with 32,631 units in the corresponding period of the last fiscal year.

    The sales of Pak Suzuki Motors witnessed decline of 27 percent to 44,698 units during the period under review as compared with 63,157 units in the corresponding period of the last fiscal year.

    Analysts at Topline Securities said that overall Pakistan car sales jumped by 23 percent MoM to 12,069 units in December 2019, however the rise was largely led by 49 percent MoM increase in sales of Pak Suzuki Motor Company (PSMC).

    The other two major manufacturers, Indus Motor (INDU) and Honda Car (HCAR) sales dropped by 12 percent MoM and 23 percent MoM, respectively.

    The increase in sales of PSMC was largely driven by the announcement of increase in car prices by the manufacturer in mid of December 2019, which was effective from January 1, 2020.

    The decline reported by the other manufacturers was largely in line with the historical year-end phenomenon, where consumers generally delay their purchases until the new year.

    On a YoY basis, weak demand dynamics was again evident from a 38 percent YoY fall in sales in December 2019, taking 1HFY20 decline to 44 percent YoY.

    This is primarily attributable to 1) higher car prices mainly due to PKR devaluation and 2) higher interest rates.

    PSMC sales were down 26 percent YoY in December 2019, while INDU’s sales declined by 56 percent YoY with Corolla sales falling by 50 percent YoY.

    HCAR sales fell by 58 percent YoY during Dec-2019 with combined sales of City & Civic declining by 56 percent YoY.

    Sale of motorcycles by Atlas Honda (ATLH) witnessed an increase of 6 percent YoY as sales clocked in at 85k units, however it recorded a decline of 11 percent MoM.

    Tractor sales recorded a growth of 75 percent YoY with Millat Tractor (MTL) sales rising by 175 percent YoY. On the MoM basis, overall tractor sales were down 37 percent MoM.

    Analysts expect recovery in car sales volumes from start of 2020 as we believe volumes would have bottomed out in December 2019.

  • Cars import falls by 81pc during July – November

    Cars import falls by 81pc during July – November

    ISLAMABAD: The import of imported cars has sharply fell by 81 percent during July – November of 2019/2020 owing to restriction imposed by the government for customs clearance through payment in foreign exchange.

    The country spent $26.1 million for import of completely built units (CBU) cars during first five months of current fiscal year as compared with $135 million in the corresponding months of the last fiscal year, according to data released by Pakistan Bureau of Statistics (PBS) on December 17, 2019.

    As per law the commercial import of used or old cars is not allowed. However, in order to facilitate Pakistanis living abroad the government has allowed incentives to bring cars into Pakistan.

    According to Federal Board of Revenue (FBR), Pakistani nationals residing abroad including dual nationals can import old and used vehicles into Pakistan under these schemes: Personal Baggage; Gift Scheme; and Transfer of Residence.

    Cars not older than three years and other vehicles not older than five years can be imported under these schemes, the FBR said.

    In the past these schemes were grossly misused and bulk of imported cars brought into the country.

    However, the ministry of commerce in February 2019 amended Import Policy Order, 2016 and made it mandatory for clearance of cars through foreign exchange, which should be certified by banks.

    Since then the clearance of the cars has come to a standstill. Customs authorities said that a large number of imported cars were at the port but importer had failed to make payment as per procedure prescribed by the ministry of commerce.

    The import of cars started declining in the last fiscal year. The import of CBU cars fell by 51.33 percent to $222 million in fiscal year 2018/2019 as compared with $456 million in the preceding fiscal year.

    The overall import of CBU vehicles during first quarter of current fiscal year fell 74 percent. The import of heavy vehicles including buses and trucks has declined by 42 percent. While import of CBU motorcycles fell by 75 percent.

  • Car sales witness 45 percent decline in July – November

    Car sales witness 45 percent decline in July – November

    KARACHI: Car sales witnessed 45 percent decline during first five months (July-November) 2019/2020 owing to increased prices and high cost of auto financing.

    According to sales data released by Pakistan Auto Manufacturers Association (PAMA), the industry witnessed sale of 54,950 units during first five months of current fiscal year as compared with 100,643 units in corresponding months of the last fiscal year.

    Analysts at Topline Securities attributed the fall to higher auto prices post rupee devaluation and higher interest rates for auto financing.

    Honda Cars (HCAR) sales fell 67 percent to 7,141 units during July – November 2019/2020 as compared with 21,911 units in the same period of the last fiscal year.

    Honda Cars sales 62 percent YoY during November 2019, where combined sales of City and Civic fell by 66 percent YoY, however it recorded increase of 4 percent on Month on Month (MoM). BR-V reported a decline of 24 percent YoY and 34 percent MoM.

    The car sales of Indus Motors (INDU) fell by 57 percent to 11,843 units during first five months of current fiscal year as compared with 27,307 units in the same months of the last fiscal year.

    Indus Motors (INDU) reported second consecutive MoM increase in volumetric sales; up by 6 percent MoM mainly due to 10 percent MoM and 8 percent MoM increase in its Corolla and Fortuner variants, respectively.

    This increase in volumes is on the back of aggressive promotions, discounts & different waiver schemes offered by company in collaboration with commercial banks. However, INDU continues to report a decline on YoY basis; down by 52 percent YoY in November 2019.

    The sales of Pak Suzuki Motors Company (PSMC) posted decline of 30 percent to 35,966 units during first five months of current fiscal year as compared with 51,425 units in the corresponding period of the last fiscal year.

    Pak Suzuki recorded a 31 percent YoY decline in November 2019. The decline in sales was led by Wagon-R and Cultus, which is down 70 percent YoY and 41 percent YoY respectively.

    Furthermore Alto has also depicted monthly decline of 27 percent YoY which is highest since its launch.

    Bolan and Ravi variants are down 58 percent and 56 percent YoY, respectively. Swift sales were down by 42 percent YoY.

    The analysts expect recovery in car volumes from start of 2020 as auto volumes will likely bottom out in December 2019.

  • Motor vehicle tax rates applicable in Sindh

    Motor vehicle tax rates applicable in Sindh

    KARACHI: Following are the motor vehicle tax rates issued by Sindh Excise and Taxation Department for various categories of locally manufactured vehicles.

    (a) i)

    ii) Motorcycle/Scooter not already registered not more than 149 cc

    Motorcycle/Scooter 150cc and above: Rs. 1800/- once for all

    Rs. 3000 once for all

    (b) Motorcycle/Scooter already registered and since first registration, the vehicle 

    i Has not completed 5 years Rs. 600/- once for all or Rs. 80/- per annum

    ii Has completed 5 years but not completed 10 years Rs.300/- once for all or Rs.80/- per annum

    iii Has completed 10 years but not completed 15 years Rs. 100/- once for all or Rs. 80/- per annum

    (c) i Motor cars/Jeeps etc (Non-Commercial) having engine capacity up to 1000cc not already registered Rs.20000/-once for all

    ii Motor cars /jeeps etc (Non-Commercial) having engine capacity upto 1000 cc already registered having up to tax payment and since first registration the vehicles

    a) Has completed 5 years but not completed 5 years  

    Rs.15,000

    Following are the luxury tax for the imported vehicles at the time of registration:

    S no. Category of Motor Vehicle Rate of Fee

    1 Imported motor Cars with the engine Capacity from 3000 CC & above Rs.150,000/-

    2 Imported motor Cars with the engine Capacity from 2000 CC to 2999 CC Rs.75,000/-

    3 Imported motor Cars with the engine Capacity from 1500 CC to 1999 C Rs.5000/-

    4 Locally manufactured or assembled motor cars with engine capacity from 1500 CC and Above Rs.5000/-.

  • Locally manufactured two-, three electric wheelers proposed 1pc sales tax for seven years

    Locally manufactured two-, three electric wheelers proposed 1pc sales tax for seven years

    ISLAMABAD: All two and three wheelers manufactured under Electric Vehicle Policy will sold at less than one percent sales tax for next seven years to bring the purchase price of EVs down, according to the policy.

    However, all two and three-wheeler EV’s imported shall be sold at one percent sales tax for the next five years.

    EVs will be exempted from registration fees and annual token tax to encourage prospective buyers and the FBR shall evolve a policy to evolve tax incentives for prospective buyers of the two-wheeler and three wheelers.

    All existing incentives of the Auto Development Policy 2016-2021 will remain intact, according to EV Policy 2019.

    The policy said that Pakistan had a large market of two and three wheelers. More than twenty million such vehicles are already on roads in Pakistan.

    Their local production has reached indigenization of more than 90 percent. Therefore, the need is to incentivize the already available manufacturing expertise for converting to e-bikes and e-rickshaws.

    Moreover, a new category of low speed electric vehicles have emerged that is added into this category.

    The policy said that EV specific parts and components, not being manufactured locally compliant to UNECE 1958 Agreement ‘WP.29’ standards as well as equivalent international standard applied by the United States, European Union and other major EV manufacturers, will be allowed import at one percent customs duty and one percent sales tax for the next two years.

    Registration number plates of EVs will have a distinct color/design to create EV specific zones in high density areas. The registration number plates will be different from other typical vehicles to distinguish between two, three and low speed four wheel electric vehicles and other vehicles segments.

    A special provision for import of swappable battery-based three wheelers is being introduced to help both introduction of such vehicles and charging infrastructure.

    Those manufacturers or consortia who demonstrate setup of manufacturing of these units and battery swapping infrastructure of running of these vehicles will be allowed to import a cumulative number of 20,000 completely built units (CBU) along with the charging infrastructure at one percent customs duty and can sell these units at one percent sales tax.

  • Electric vehicles to reduce 60pc fuel cost: Amin Aslam

    Electric vehicles to reduce 60pc fuel cost: Amin Aslam

    KARACHI: The use of electric vehicles will reduce fuel cost by 60 percent and it will also resolve environmental issues caused by pollution, Malik Amin Aslam, Advisor to Prime Minister for Climate Change, said on Thursday.

    Addressing at a press conference, Amin Aslam said that the government had approved first ever Electric Vehicle Policy and the industry would start working soon.

    “The owners of motor cycles, three-wheelers and buses can reduce their monthly fuel cost by 60 percent with uses of electric vehicle technology,” he said.

    He said that on Saturday he would meet the Prime Minister and after that meeting the electric motor vehicle industry would start operation.

    The modern technology will help the country to save around $2 billion foreign exchange, which are being spent on oil import.

    He said that the country had facing environmental issues. He said that such projects would be successful for clean environment such as in Lahore city.

    He said that the electricity generation in the country had improved.

    The country is facing large import bill especially for oil import bill. He said in case 30 percent vehicles converted to electric mechanism than the country will able to save around $2 billion.

  • Electric vehicles to help in saving $2 billion oil import payment: adviser

    Electric vehicles to help in saving $2 billion oil import payment: adviser

    ISLAMABAD: The launch of electric vehicles in the country will help the country to save around $2 billion foreign exchange, which is spend on annually on oil import, Malik Amin Aslam, Prime Minister’s Adviser on Climate Change, said on Thursday.

    Besides, adopting electric vehicle, the consumers could save over 30 percent cost of vehicle maintenance, because these do not require petrol or gas, no engine oil and driving them is highly comfortable, and affordable.

    Addressing a press conference on Thursday along with private electric vehicle manufacturing stakeholders/investors, he told media that introduction of electric vehicles in Pakistan following the EV policy, which was framed after consultation with all relevant stakeholders from government and non-governmental sectors, are going to be a big change for the people to switch from fuelling at the pump to fuelling at an outlet.

    He said that electric vehicle (EV) Policy would help revolutionize overall transport sector of the country in coming years and urban outlook with introduction of better, sustainable and environmental-friendly transport facility.

    He also said that this policy, which has been approved by the Cabinet this year on November 5, would also significantly help boost pollution-free transport facilities in the country in a way that are not harmful to environment and do not emit any smoke and cause noise pollution.

    From the running costs of electric cars to being very environmental-friendly, introduction of electric vehicles in the country will help cut country’s oil import bill, yield countless benefits for both environment and the people and their overall lifestyle and the way our cities look, the adviser said.

    “Electric vehicles do not emit vehicle emissions and these are cleaner, do not cause noise pollution and eliminate your fuel costs. Besides, EVs are fun to drive and these have instant torque and offer a very smooth ride,” he explained while counting on the benefits of the electric vehicles.

    The adviser Malik Amin Aslam noted that periodic trips to the gas station to fuel up your car are considerably expensive and time consuming for the people, particularly when the ever-fluctuating price of gasoline is high.

    However, by choosing an electric vehicle, one can forget about paying for gasoline and being at the mercy of fuel prices.

    “Not only is electricity less expensive than gasoline, it also has a much more stable price point, meaning that rapid price swings are all but eliminated by going electric,” he further explained.

    Malik Amin Aslam stated that humans have historically had a very negative impact on our environment. “Carbon dioxide emissions from traditional vehicles contribute to greenhouse gases in the atmosphere and accelerate climate change and overall environmental degradation and hurt public health. Conversely, all-electric vehicles don’t produce climate change-causing carbon dioxide into the atmosphere, when any of us drives them.

    Besides, hybrid electric vehicles use their battery to greatly improve the distance you can travel with a gasoline-powered engine,” he elaborated while highlighting environmental benefits of the electric vehicles.

    Given the backdrop, switching to an electric vehicle is one way to reduce further damage to the earth, cut individual carbon and transport sector’s footprints, the prime minister’s adviser on climate change.

    He said that with implementation of electric vehicle policy of Pakistan, a new economic sector will emerge, introducing a new electric vehicle producing industrial sector and thousands new jobs.

    Talking about electric public transport system, he told media that as part of the policy goal, provincial governments are being approached to usher in launch mass transit system in urban areas, under which electric buses would be introduced to provide pollution, noise-free, comfortable and cheaper transport facilities to the masses, particularly women.

    For this, federal government would provide every possible help to the provincial governments to introduce such mass transit system, Malik Amin Aslam added.

  • Pakistan spends $531mn on vehicle import in 4 months

    Pakistan spends $531mn on vehicle import in 4 months

    KARACHI: Pakistan has spent $531 million on vehicle import in the first four months (July – October) of the current fiscal year, according to official data released on Wednesday.

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  • Honda Atlas Cars declares 50 percent drop in after tax profit

    Honda Atlas Cars declares 50 percent drop in after tax profit

    KARACHI: Honda Atlas Cars (Pakistan) Limited on Thursday announced 50 percent drop in net profit for the quarter ended September 30, 2019.

    According to financial results of the company the profit after tax for the quarter (July – September) 2019 fell to Rs509.69 million as compared with the net profit of Rs1,030 million in the corresponding quarter of the last year.

    The sales of the company fell to Rs11.64 billion for the quarter under review as compared with Rs25.81 billion in the corresponding period of the last year, posting 55 percent decline.

    The gross profit of the company declined to Rs1.21 billion for the quarter ending September 30, 2019 as compared with Rs1.65 billion in the same period of the last year.

    The company declared profit of Rs1.1 billion for the half year (April – September) 2019 as compared Rs3.24 billion in the same half of the last year.

    The sales of the company during the half fell to Rs29.52 billion as compared with Rs49.67 billion in the same half of the last fiscal year.

  • Policy recommends import of used electric vehicles

    Policy recommends import of used electric vehicles

    KARACHI: The import of used electric vehicles has been proposed under ‘National Electric Policy’ for at least two years for giving time to local auto manufacturers to prepare development plans.

    According to recently introduced ‘National Electric Policy’ it is proposed:

    For the first two years i.e. 2019-2021 up to 3 years old ‘used’ all-electric vehicles will be allowed for import.

    This time will give local auto manufacturers to prepare their EV development plans and will also help acclimatize local consumers with a lower upfront cost and will help in establishing charging infrastructure.

    If locally manufactured EVs are available by 2021, then this import allowance can be withdrawn

    However, if there are no locally manufactured EVs by year 2021 the decision to extend this allowance may be pondered upon.

    According to the policy the category of EVs include passenger and commercial cars, jeeps, SUVs, vans and small delivery vehicles of up to one ton cargo hauling i.e. Categories M1 and N1 of UNECE Vehicle Classification.

    Although the car market has developed in Pakistan, there is virtually no EV penetration in the country.

    Therefore, some aggressive steps are required to create an EV market and then reap its benefits.

    The capital cost of electric cars is still high for masses and many countries provide tax breaks, incentives and trade-ins to encourage purchase of electric cars.

    While the cost is high at this time, it is expected to go down steadily and by 2023-24 the cost of electric cars is projected to be at par with their Fossil Fuel Vehicle (FFV) counterparts.

    For Pakistan to create an EV market some good incentives are needed to bring the cost of purchase of EVs down.

    In view of the above the Government of Pakistan, in collaboration with relevant entities shall take the following measures:

    • 1. All existing incentives of the Auto Development Policy 2016-2021 are to remain intact. However, government will give the following further incentives to jump start EV manufacturing in Pakistan only for local manufacturing units:

    • a. All EVs manufactured in Pakistan will be sold at less than one percent General Sales Tax (GST) for the next seven years to bring the purchase price of EVs down.

    • b. Pakistan manufactured EVs will be exempted from registration fees and annual token tax to encourage prospective buyers. Imported EV’s shall receive the same benefit for next 5 years.

    • 2. EV specific parts and components, not being manufactured locally compliant to UNECE 1958 Agreement ‘WP.29’ standards as well as equivalent international standard applied by the United States, European Union and other major EV manufacturers, will be allowed import at one percent custom duty for the next two years until 2021.

    • 3. Registration number plates of EVs will have a distinct color/design to create EV specific zones in high density areas and to introduce distinct incentives for EVs.

    • 4. The State Bank of Pakistan may initially allow new EVs to be purchased under Green Banking Guidelines and may further evolve an incentive scheme push down the price of local EV manufacturing through a better financing scheme. Again this will encourage EV penetration in the country and will reduce upfront cost of EVs.