Pkrevenue.com

Category: Automotive

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

  • Import of old, used motor cars falls by 55.41 percent in 2019-2020

    Import of old, used motor cars falls by 55.41 percent in 2019-2020

    KARACHI: The import of used and old cars massively fell by 55.41 percent during fiscal year 2019/2020 due to condition of payment of duty and taxes through foreign exchange imposed by the government.

    The import of used and old cars in Completely Built Unit (CBU) condition fell to $99 million during 2019/2020 as compared with $222 million in the preceding fiscal year, according data released by Pakistan Bureau of Statistics (PBS).

    The commercial import of used or old cars is not allowed under prevailing laws of the country. However, in order to facilitate expatriate Pakistanis the government allows incentives to bring cars into the country.

    The Federal Board of Revenue (FBR) has allowed 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.

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

    These schemes were grossly misused in the past 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.

    However, later in a meeting of Economic Coordination Committee (ECC) decided to allow payment for duty and taxes for customs clearance of imported cars through local resources with condition that if foreign exchange becomes short due to currency fluctuations or change in duty and tax rates.

    The overall import of CBU vehicles during fiscal year 2019/2020 fell by 43 percent. The import of heavy vehicles including buses and trucks has declined by 24.5 percent. While import of CBU motorcycles fell by 71.63 percent.

    On the other hand the import of cars as Completely Knocked Down (CKD) condition also fell by 41.57 percent to $478 million during 2019/2020 as compared with $818 million in the same period of the last fiscal year.

    Market sources said that massive depreciation in the local currency during past couple of years had increased the cost of local car manufacturers.

    Further, the rates of locally assembled cars for end consumers also jumped up sharply.

    These factors have reduced the productions of locally manufactured cars and subsequently reduced the import of cars in CKD condition.

    The overall import of vehicles in CKD fell by 41.63 percent to $727.52 million during 2019/2020 as compared with $1.24 billion in the preceding fiscal year.

  • Annual car sales plunge by 53 percent on slow economy, COVID

    Annual car sales plunge by 53 percent on slow economy, COVID

    KARACHI: Domestic car sales have plunged by 53 percent in fiscal year 2019/2020 owing to slow economic activity and outbreak of coronavirus, analysts said on Monday.

    According to statistics released by Pakistan Automobile Assemblers Association (PAMA), the total car sales plunged to 110,583 units during fiscal year 2019/2020 as compared with 235,229 units in the preceding fiscal year.

    Analysts at Topline Securities said that the year remained turbulent for the car assemblers, as slow economic activity and high interest rates affected demand at the start of the year. In the last quarter, sales were severely affected by COVID-19 outbreak.

    The domestic car sales also witnessed 52 percent decline to 8,446 units in June 2020 as compared with 17,468 units in the same month of the last year.

    However, the sales increased by 77 percent when compared with the sales of May 2020 as car dealerships became operational after lifting of COVID-19 related lockdowns/restrictions.

    Honda Car (HCAR) and Indus Motors (INDU) recorded 514 percent MoM and 199 percent MoM growths, respectively.

    The major decline came in sales of Honda Cars which fell by 63 percent to 16,390 units in fiscal year 2019/2020 when compared with 44,234 units in the preceding fiscal year.

    Indus Motors witnessed 53 percent decline to 28,378 units in fiscal year 2019/2020 as compared with 60,993 units in the preceding fiscal year.

    The sales of Pak Suzuki Motors registered 49 percent decline to 65,815 units during fiscal year 2019/2020 as compared with 130,002 units in the preceding fiscal year.

  • Car imports fall by 61pc in eleven months

    Car imports fall by 61pc in eleven months

    KARACHI: The import of used and old cars witnessed sharp decline of 61 percent during first eleven months (July-May) of current fiscal year due to condition of payment of duty and taxes through foreign exchange imposed by the government.

    The import of used and old cars in Completely Built Unit (CBU) condition fell by 61 percent to $84.2 million during July –May 2019/2020 as compared with $216.5 million in the corresponding period of the last year, according data released by Pakistan Bureau of Statistics (PBS).

    The commercial import of used or old cars is not allowed under prevailing laws of the country. However, in order to facilitate expatriate Pakistanis the government allows incentives to bring cars into the country.

    The Federal Board of Revenue (FBR) has allowed 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.

    The 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.

    However, later in a meeting of Economic Coordination Committee (ECC) decided to allow payment for duty and taxes for customs clearance of imported cars through local resources with condition that if foreign exchange becomes short due to currency fluctuations or change in duty and tax rates.

    The overall import of CBU vehicles during first eleven months of current fiscal year fell 48 percent. The import of heavy vehicles including buses and trucks has declined by 27 percent. While import of CBU motorcycles fell by 71 percent.

    On the other hand the import of cars as Completely Knocked Down (CKD) condition also fell by 40 percent to $440 million during July – May 2019 as compared with $736 million in the same period of the last fiscal year.

    Market sources said that massive depreciation in the local currency during past couple of years had increased the cost of local car manufacturers.

    Further, the rates of locally assembled cars for end consumers also jumped up sharply.

    These factors have reduced the productions of locally manufactured cars and subsequently reduced the import of cars in CKD condition.

    The overall import of vehicles in CKD fell by 40 percent to $675 million during first eleven months of 2019/2020 as compared with $1.128 billion in the corresponding period of the last fiscal year.

  • Car sales plunge by 75 percent in May

    Car sales plunge by 75 percent in May

    KARACHI: The sales of locally manufactured cars have posted a massive decline of 75 percent in May 2020 due to closure of business operations of all major car assemblers during the month.

    According to data released by Pakistan Automobile Manufacturers Association (PAMA), the sales of car industry were at 4,473 units in May 2020 as compared with 17,781 in the same months of the last year.

    Analysts at Topline Research said that the decline in sales was mainly due to the closure of business operations of all major car assemblers, which resulted in no invoicing of cars for the majority of the month.

    The car sales also witnessed 54 percent decline to 102,137 units during July – May 2019/2020 as compared with 222,167 units in the corresponding period of the last year.

    The highest decline was recorded by Honda Car (HCAR) as its units sales were down by 89 percent YoY in May 2020, followed by Indus Motors (INDU) and Pak Suzuki (PSMC) with declines of 88 percent YoY and 64 percent YoY, respectively.

    In 11MFY20 car sales have declined by 54 percent YoY. HCAR sales are down by 65 percent YoY, followed by INDU and PSMC with declines of 57 percent YoY and 49 percent YoY, respectively.

    Atlas Honda (ATLH) recorded motorbike sales of 12,106 units, down by 88 percent YoY. In 11MFY20, ATLH sales are down by 24 percent YoY.

    Tractor sales are down by 49 percent YoY. Al Ghazi Tractors (AGTL) reported a decline of 89 percent YoY, while Millat Tractors (MTL) sales have declined by 26 percent YoY (+70 percentMoM).

    The official notification pertaining to announced subsidy of Rs2.5 billion on GST for tractors remains pending, which has created uncertainty amongst the buyers.

    The analysts expect higher sales for the month of June-2020 as restrictions imposed by the government has been eased significantly compared to the outgoing month

  • Customs auction of vehicles to be held on June 04 at ASO Headquarter

    Customs auction of vehicles to be held on June 04 at ASO Headquarter

    KARACHI: Pakistan Customs has announced auction of used vehicles to be held on June 04, 2020 at Anti-Smuggling Organization (ASO), East Wharf, Karachi.

    Following vehicles will be presented for the auction:

    01. Used Toyota Lexus Car – Reg No. UC-868 -Model-2006-(As per seat Belt), Chassis: JTHBG 963905034702 / Engine EMH-3 GR-FE158467 – 3485 cc.

    02. Used Toyota Harrier Jeep – Reg.No-JAA-454 – Model-1998 – 2999cc, Chassis No-MCU-10-0013510 – Engine No- IMZ-FE6688090.

    03. Used Toyota Mark-II Saloon Car / Reg. No-BBL-708 / Model-2000 / 1800 HP, Chassis No-JZX110-6000922 / Engine No-1JZ-075010

    04. Used Toyota Land Cruiser Jeep – P.White Reg.No. LZN-888 – Model – 1999 – 4663 CC, Chassis No-UZJ 100-0081129 / Engine No- 2 UZ-0132269.

    05. Used Toyota Hilux Surf Jeep – Reg. No. CJ-4242 (Sindh) – Model-1990 – 2446 CC, Chassis No LN130-0026273 / Engine No. 2L-2264058

    06. Used Nissan X-Trail 5 Door Jeep – Pearl White Reg. No. GR-621 – Model-2005 (As per seat Belt Model-2000), Chassis No. NT 30-100374 – Engine No. QR 20 (DE)

    07. Used Toyota Land Cruiser Jeep – ( Petrol ) White Reg. No. BF-5933 – Model-1995 – 4476 CC, Chassis No. FZJ 80-0109507 / Engine No.

    08. Used Mercedes Benz Saloon Car (AG) – Reg.No. # AB 1001, Chassis No-WDB1240312B476728

    09. Used Toyota Hilux Surf Heep – Reg,No. UU-691 – Modle – 1992 – 240CC., Chassis – LN130-7022502 –

    Engine No-3244904

    10. Used Toyota Mark-X Car Reg. No. AQD-567 – Model-2006 – 2499 cc, Chassis # GRX120-3018594 Engine # 4 GR-FSE

    11. Used Toyota Hilux Surf Jeep Reg. # BC-4942 (Sindh) – Model-1993 – 3000 cc, Chassis # KZN130-9021488 – Engine # 1KZ-0040092

    12. Used Mercedes Saloon Car Reg # ZA-030 (Islamabad) – Model-2000 – 3200cc – Colour White, Chassis # WDB1704652F205019 Engine # 1234567

    13. Used Honda Hybrid Saloon Car Reg # AAP-669 (Quetta) – Model-2006 – 1300 cc, Chassis # FD3-1004625 Engine # LDA-1304637

    14. Used BMW Saloon Car ( 320i ) Reg # AAQ-687 (Quetta) – Model-2005 – 1995 cc, Chassis # WBAVA76080NK19520 Engine # A629H507N46B20BA

    15. Used BMW Car ( 735i ) Reg # YG-455 ( Islamabad ) – Model-2003 – Colour Black, Chassis # WBAGL42050DD81475

    16. Used Toyota Crown Royal Saloon Car Reg # AZS-383 – Model-2013 – Colour Silver, Chassis # AWS210-6030122

    17. Used Toyota Hilux Surf Jeep Reg # WAG – 871 (Quetta) – Model-1996 – 2700 cc, Chassis # KZN185-0033706 Engine # 1KZ-0347330

    18. Used Toyota AQUA Car Reg # ADT-722 – Model-2012, Chassis # NHP10-2060843

    19. Used Nissan X-Trail Jeep Reg # WAJ-910 ( Quetta ) – Model-2004, Chassis # NT30-132366

    20. Used Toyota Mark-X car Reg # Fake-SP-046-A – Model-2005 – 2500 cc, Chassis # GRX120-3006864

    21. Used Toyota Land Cruiser VX Jeep Reg # BC-3498 – Model-1993, Chassis # JT111TJ-800701495

    22. Used Toyota Hilux Surf Jeep ( Petrol ) Reg. # BF-0150 – Model-1996, Chassis # VZN185-0024837

    23. Used Toyota Hilux Surf Jeep ( Petrol ) Reg. # BF-1429 – Model-1996, Chassis # RZN185-0006433

  • Honda Cars declares 82 percent decline in annual profit

    Honda Cars declares 82 percent decline in annual profit

    KARACHI: Honda Atlas Cars (Pakistan) Limited has posted 82 percent decline in annual profit for the period ended March 31, 2020, said a notification on Tuesday.

    The car manufacturing company declared Rs682 million profit after tax for the year ended March 31, 2020 as compared with Rs3.85 billion in the preceding year.

    The sales of the company fell by 42 percent to Rs55 billion for the year ended March 31, 2020 as compared with Rs95.13 billion in the preceding year.

    The administrative expenses were flat at Rs738.75 million for the year. Operating expenses were also reduced to Rs1.045 billion for the year under review.

    The company declared Rs4.77 as earning per share for the year ended March 31, 2020 as against Rs26.97 EPS declared in the preceding year.

  • SRB urged to allow normal tax for car dealers

    SRB urged to allow normal tax for car dealers

    KARACHI: Sindh Revenue Board (SRB) has been urged to bring authorized dealers of car manufacturers into normal tax regime.

    Overseas Investors Chamber of Commerce and Industry (OICCI) in its proposals for budget 2020/2021 submitted to SRB, recommended that normal sales tax rate should be applied for services provided by authorized car dealers under tariff heading 9806.4000.

    It said that sales tax on services by authorized car dealers under tariff heading 9806.4000, is at reduced rates and input sales tax is barred, while no such position is available under any of the other provincial sales tax laws.

    Further, no option is available to the service provider to pay sales tax at the normal rate at the rate of 13 percent, instead of reduced rate, as provided for other services under notification No.SRB 3-4/5/2015 dated Jul 01, 2015, e.g. Construction services, Transportation services, Concrete services etc.

    The OICCI recommended that normal sales tax rate should be applied for services provided by authorized car dealers under tariff heading 9806.4000.

    Alternatively, option should be provided to “authorized car dealers of vehicle manufacturers” to pay sales tax at normal rate under tariff heading 9806.4000, as provided to other services.

    Application of standard rate will eliminate the discrimination arising on services provided by dealers in Sindh against other provinces and cost of doing business will reduce for service providers and recipients, it added.

  • Auto parts, motorcycles should be excluded from retail price printing condition

    Auto parts, motorcycles should be excluded from retail price printing condition

    KARACHI: Federal Board of Revenue (FBR) has been urged to exclude auto spare parts and motorcycles from the requirement of printing of retail price.

    Karachi Chamber of Commerce and Industry (KCCI) in proposals for budget 2020/2021 submitted to the FBR, said that due to inclusion of motorcycle and automobile spare parts in the Third Schedule, to the Sales Tax Act, 1990 vide new serial No.49 in column (1) through the Finance Act, 2019, serious hardship is being faced by importers of motorcycle and automobile spare parts.

    Under the amended procedure, importers are required to print MRP (Maximum Retail Price) on the imported parts and pay sales tax and additional sales tax on customs value.

    The chamber said that importers were unable to determine the landed cost at the time of delivery of cargo at destination due to the fluctuations in exchange rates.

    “It is not possible to determine the sale price of imported auto parts at which the retailers will sell the same to end-users.”

    There is wide variation in sale prices by wholesalers and retailers. Importers cannot pre-determine and declare maximum retail price as required under the new regulations.

    Due to market fluctuations and rapidly changing demand and supply situation, importers cannot determine the final sale price and sales tax accordingly at import stage.

    Frequent and unpredictable fluctuation in exchange rates make it impracticable to forecast the actual landed cost and sale prices, the chamber said.

    The KCCI proposed that motorcycle and auto parts are not a consumer product /grocery item which may require MRP to be printed on the product. It is an industrial use product, supporting Pakistan’s auto industry and meeting the requirements of after-market.

    “Therefore the automobile/motorcycle spare parts may be taken out of Third Schedule and included in normal tax regime for assessment of Customs Duty, Sales Tax and WHT etc.

    Customs authorities have the competency to assess the values and levy the Custom Duty and Taxes accordingly.

    The KCCI said that the proposed amendment would facilitate importers and dealers in customs clearance and avoid detention and demurrage charges.

    Curtail rampant smuggling which has been on the rise after inclusion of Autoparts in Third Schedule.

    Further it would support automobile industry and after market. Prevent delays in clearance and resulting costs.

  • FPCCI proposes duty free import of used cars for subsequent export

    FPCCI proposes duty free import of used cars for subsequent export

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed duty free import of used cars and their subsequent export after repair.

    The apex trade body in its proposals for budget 2020/2021 said that the UAE had developed Export Processing Zone (EPZ) for duty free import of used cars, their repair and subsequent export to different countries especially those of Africa.

    “On similar pattern a ‘Used vehicles EPZ’ be set up in Karachi, Port Qasim or Gwadar and import of both right hand and left-hand drive vehicles may be allowed under this EPZ for their export to different countries. Because of its more feasible sea route to Africa and land route to Central Asian markets, cheap labour, painters and mechanics, the proposed EPZ may turn out to more attractive than the ones in UAE.”

    The FPCCI also highlighted issue of import of stock lot and job lot goods. The apex trade body said that despite the fact that stock lot and job lot goods are available in the world at lower prices, but for the protection of local industry, their import is banned.

    Maintaining the ban for home consumption, permission may be granted for import of stock lot and job lot goods under Export Facilitation Schemes on 100 percent export basis.

    The FPCCI also said that import of used clothing and their exports after sorting, repair, washing and packing is allowed to exporters operating in EPZ.

    However, this facility is not allowed under DTRE scheme and is denied under other Export Facilitation schemes too. If the same is allowed, Pakistan can capture a bigger share because of its cheap labour.

    The FPCCI said that the global warehousing market is more than $ 1.0 trillion and is growing at a very fast pace. The Export Policy Order vide para 9(g) allows export of imported goods in same state – unprocessed form from bonded warehouse and the imported goods already cleared from home consumption.

    The FPCCI said that this is not in line with this global business practice. “Singapore, Malaysia, Sri-Lanka and a number of other countries allows such export, which helps in earning FE and generates employment,” it added.

    The issue is that re-export of imported goods in the same state is allowed but there is no procedure which allows refund of duty and taxes paid, neither such imports are covered under DTRE or any other export facilitation scheme (manufacturing bond, temporary imports, export oriented unit etc).

    No importer can import goods, ware house it and re-export after payment of import duty and taxes. He can re-export to mitigate his loss but cannot adopt it as a business to utilize cheap warehousing in Pakistan.

    It proposed the Ministry of Commerce and FBR to allow import for re-exportation under DTRE Rules subject to value addition of 5percent or 10 percent.

  • Car manufacturers resume operation as lockdown eases

    Car manufacturers resume operation as lockdown eases

    KARACHI: Automobile industry has resumed manufacturing and administrative operations after the government eased lockdown.

    Honda Atlas and Indus Motors on Tuesday informed Pakistan Stock Exchange (PSX) about resumption of their manufacturing operations.

    The Indus Motors Company in its letter said:

    “With reference to our earlier disclosure of material information dated 27 March 2020, relating to the temporary suspension of plant operations of the Company due to outbreak of the COVID-19 in the country.

    “The management of the Company according to relaxation/approval given by the Sindh Government has decided to resume plant operations and its offices with adequate measures aimed at preventing the pandemic’s spread.”

    Similarly, Honda Atlas Cars (Pakistan) Limited in its letter said:

    “In view of the relaxation allowed to automobile Industry from the current situation of lockdown due to COVID-19, by the Authorities, Honda Atlas Cars (Pakistan) Limited has resumed its operations from May 19, 2020 with all precautionary measures aimed at preventing pandemics spread.”