PkRevenue provides stories related to automotive industry. We focus on auto policy of Pakistan. The coverage also includes sales of domestic manufacturing.
KARACHI: Honda Atlas Cars (Pakistan) Limited announced a sharp growth in profit by 40 per cent to Rs2.51 billion for the year ended March 31, 2022.
According to financial results submitted to Pakistan Stock Exchange (PSX) on Thursday, the annual profit after tax of the company was Rs1.79 billion in the preceding year.
The sales of the company increased to Rs108 billion for the year ended March 31, 2022 as compared with Rs67.36 billion in the preceding year. Meanwhile, cost of sales recorded at Rs102.47 billion for the year under review as compared with Rs63.58 billion in the preceding year.
The gross profit of Honda Atlas Cars (Pakistan) Limited also recorded a sharp increase to Rs5.58 billion for the year ended March 31, 2022 as compared with 3.7 billion in the preceding year.
A significant increase has been seen in administrative expenses for the year under review. The administrative expenses of the company increased to Rs1.06 billion for the year ended March 31, 2022 as compared with Rs824 million in the last year.
The company declared a final cash dividend Rs7 per share (70 per cent) was recommended for the year ended March 31, 2022 as compared with Rs4.52 per share (45.2 per cent) declared last year.
Honda Cars has not declared any bonus or right shares for the year ended March 31, 2022.
LAHORE: The Directorate of Intelligence and Investigation (I&I) customs, Lahore announced auction of motor vehicles to be held on May 26, 2022 at State Warehouse, of the directorate, Allama Iqbal Town, Lahore.
The directorate will present following vehicles for the auction:
KARACHI: The State Bank of Pakistan (SBP) on Tuesday reduced the tenure for car loan to three years from five years in order to curb demand to support balance of payment and devaluation of Pakistan Rupee (PKR).
The SBP issued Circular No. 19 of 2022 to amend prudential regulations related to consumer financing.
The central bank amended the Regulation No. 11 to reduce the maximum tenure for car financing. According to the circular, the maximum tenure of auto financing has been reduced to three years from five years for vehicles above 1000CC engine displacement and to five years from seven years for vehicles up to 1000CC engine displacement and locally assembled / manufactured electric vehicles.
However, the regulatory treatment of Roshan Apni car product communicated earler to Roshan Digital Account (RDA) participant banks will continue to remain effective.
It is pertinent to mention that the government last week imposed a complete ban on import of luxury and non-essential items. The import of cars in Completely Built Unit (CBU) has also been banned under the new policy. The import of Completely Knocked Down (CKD) cars are still allowed for imports but with certain restrictions.
The SBP on May 20, 2022 issued a circular imposing restrictions for making import payments.
The SBP said it has been decided that banks, with immediate effect, shall seek prior permission from Foreign Exchange Operations Department (FEOD), SBP-BSC before initiating transactions for import of goods listed in the enclosed Annexure, subject to following conditions:
The above requirement shall be applicable for all import transactions initiated by Authorized Dealers through (i) issuance/ amendment of letter of credit; (ii) registration/ amendment of contract; (iii) making advance payment; (iv) authorizing transactions on open account or collections basis;
The above requirement shall not be applicable on import transactions initiated by the Authorized Dealers on or before the date of issuance of this circular letter;
The banks may approach Director, FEOD, SBP-BSC, Head Office, Karachi, along with appropriate documents and its recommendation on a case to case basis;
The banks shall be required to suitably amend the importer’s bank profile in Pakistan Single Window to ensure that the aforementioned import transaction shall not be initiated on open account basis without prior permission from State Bank.
It is noteworthy that the SBP has also increased the key policy rate to 13.75 per cent in an announcement on May 23, 2022. The rise in interest rate will increase the cost of loans which will subsequently reduce the demand for car loans.
GWADAR: Collectorate of Customs (Enforcement), Gwadar has announced auction of motor cars to be held on May 23, 2022 at state warehouse godown, Gwadar.
The collectorate announced auction of following motor vehicles:
01. Zamyad Pickup Model nil, Chassis No. NAZDL104TD-0068010
02. Zamyad Pickup Model nil, Chassis No. NAZPL140BJ-0501530
03. Zamyad Pickup Model nil, Chassis No. NAZPL140TB-N272445
04. Zamyad Pickup Model nil, Chassis No. NAZPL140BJ-0503834
05. Toyota Stout Pickup Model 1983, Chassis No. RK110-601814
06. Toyota Pickup S/cabin Model 1984, Chassis No. YN55-0017594
07. Toyota Pickup S/cabin Model 1984, Chassis No. YN55-0018440
08. Toyota Hilux Surf Model 2003, Chassis No. RZN215-0008039
09. Toyota Hilux Surf Model 2007, Chassis No. GRN215-8109082
10. Toyota Hilux Surf Model 1999, Chassis No. RZN185-9030039
11. Toyota Stout Pickup S/Cabin Model 1984, Chassis No. RK110-613912
12. Toyota Corrolla Model 2005, Chassis No. NZE121-0371839
13. Toyota Hilux Surf Model 1998, Chassis No. RZN185-0031909
14. Toyota Premio Model 2008, Chassis No. NZT260-3038101
15. Toyota Axio Model 2007, Chassis No. ZRE142-6008183
16. Toyota Vitz Model 2004, Chassis No. SCP13-0030163
17. Toyota Probox Model 2003, Chassis No. ZNE10-0101673
18. Toyota Land Cruiser Pickup Model 1988, Chassis No. FJ75-0043421
19. Toyota Land Cruiser Pickup Model 1988, Chassis No. FJ75-0074709
20. Toyota Land Cruiser Pickup Model 1986, Chassis No. FJ75-0038226
21. Toyota Land Cruiser Pickup Model 1988, Chassis No. FJ75-0075357
22. Hino Truck Model 1994, Chassis No. FF3HJA-50180
23. Toyota Land Cruiser VX 4X4 Model 1998, Chassis No. UZJI00-0015026
24. Toyota Hilux D/Cabin Vigo Model 2005, Chassis No. MR0FZ29G701508652
25. Toyota Land Cruiser Pickup Model 1986, Chassis No. FJ75-0040747
KARACHI: The State Bank of Pakistan (SBP) has imposed condition for payment on import of mobile phones and motor cars.
The SBP issued a circular related import goods making it mandatory for banks to take prior permission for releasing funds for import of motor cars, mobile phones and other machinery.
In this regard the SBP informed the banks about Chapter 13 of the Foreign Exchange Manual relating to payments against import of goods.
The SBP decided that with immediate effect, the banks would require prior permission from Foreign Exchange Operations Department (FEOD), SBP-BSC before initiating transactions for import of goods listed in the enclosed Annexure, subject to following conditions:
The above requirement shall be applicable for all import transactions initiated by Authorized Dealers through (i) issuance/ amendment of letter of credit; (ii) registration/ amendment of contract; (iii) making advance payment; (iv) authorizing transactions on open account or collections basis;
The above requirement shall not be applicable on import transactions initiated by the Authorized Dealers on or before the date of issuance of this circular letter;
Authorized Dealers may approach Director, FEOD, SBP-BSC, Head Office, Karachi, along with appropriate documents and its recommendation on a case to case basis;
Authorized Dealers shall be required to suitably amend the importer’s bank profile in Pakistan Single Window to ensure that the aforementioned import transaction shall not be initiated on open account basis without prior permission from State Bank.
All other instructions on the subject shall remain unchanged. Authorized Dealers are advised to bring the same to the knowledge of all the concerned and ensure meticulous compliance of the above & other applicable regulations on the subject. Authorized Dealers are especially instructed to bring these instructions to the knowledge of their customers and advise them to approach the bank before initiation of import transaction of any item covered under this circular letter.
KARACHI: The sales of domestic manufactured cars have registered a growth of 50 per cent during first ten months (July – April) 2021/2022.
However, auto sales plummeted by 18 per cent Month on Month (MoM) to 22,370 units during April 2022 on the following grounds; increased car prices; and increased cost of financing, analysts at Arif Habib Limited said.
Albeit, the momentum remained positive on a Year on Year (YoY) basis, up 30 per cent mainly on the back of resumption of pre Covid level economic activities along with launch of new models (Swift, Civic, City), consumer’s anticipation of further price hike, given the company’s kept on hinting massive surge in cost of production and substantial Pak Rupee (PKR) depreciation which has put margins under pressure. This took sales during first ten months of current fiscal year to 227,981 units, up 50 per cent YoY.
Engine capacity 1300cc segment and above remained the star performer, up 34 per cent YoY, given resumed sales of new Honda Civic Xi and Swift 4th generation.
During April 2022, sales in 1000cc segment went up by 29 per cent YoY. Major contributors to it remained Cultus (+33 per cent YoY) followed by Wagon R (+26 per cent YoY).
Sales in below 1000cc segment maintained it’s positive momentum during the month (+22 per cent YoY) because of higher prices of imported small cars, and given this segment is being subjected to relatively lower sales tax (12.5 per cent) and also due to the ability of lower to middle income group to obtain full financing against it.
During April 2022, sales of Indus Motors went up by 8 per cent YoY to 5,775 units. Albeit 18 per cent MoM decline was observed given lower sales of Corolla/Yaris (-24 per cent YoY).
The sales of Pak Suzuki during April 2022 grew by 47 per cent YoY to 12,639 units on the back of resumed sales of new Suzuki Swift 4th generation. Albeit, sales plunged by 16 per cent MoM on the back of increased car prices and consumer’s anticipation of further price hike which caused them to book cars as soon as possible.
Honda Cars sold 2,629 units during April 2022; up by 15 per cent YoY amid launch of new models of Civic and City. Albeit sales declined by 28 per cent MoM amid increased prices.
The sales of tractors stood at 4,848 units during April 2022, (+8 per cent YoY). However, sales went down by 14 per cent on a MoM basis. AGTL posted relatively higher market share (54 per cent) as compared to MTL.
PESHAWAR: Collectorate of Customs (Enforcement), Peshawar has announced auction of motor cars to be held on May 16, 2022 at state warehouse godown, Peshawar.
The collectorate announced auction of following motor vehicles:
01. Mercedes Benz (Bullet Proof) Model 1982, Chassis No. WDB-12603312037551
02. Toyota Corolla Car Model 1987 (As per Website), Chassis No. CE90-3002413
03. Toyota Hilux Surf Model 1993 (As per Website), Chassis No. LN130-7044977
MULTAN: Directorate of Customs Intelligence and Investigation, Multan has announced auction of confiscated vehicles to be held on May 11, 2022 at Customs Dry Port, near Sher Shah Bypass, Multan.
Spokesperson has expressed concern over price surge and has taken a serious view about the frequent price increases by local automobile manufacturers/ assemblers.
The spokesperson said that the situation was unacceptable, and the government might consider to initiate regulatory measures which may include fixation of prices under the Price Control Prevention of Profiteering and Hoarding Act, 1977.
KARACHI: Overseas Investors Chamber of Commerce and Industry (OICCI) has recommended reduction in federal excise duty (FED) on locally manufactured cars.
The OICCI in its proposals for budget 2022/2023 submitted to the Federal Board of Revenue (FBR), recommended that levy of FED on locally manufactured vehicles should be reduced by amending Serial No. 55B and 55D of Table I of First Schedule of the Federal Excise Act, 2005, to restore sales revenue of vehicles of auto sector while also increasing government revenue.
It further recommended reduction in minimum tax under section 113 of Income Tax Ordinance, 2001 for authorized dealers of vehicle manufacturers and exemption of withholding tax under section 231B of the Ordinance on sale to dealers.
The rationale is to promote wholesale-retail mechanism, as applicable internationally, which will improve volumes on account of stock availability and healthy competition. Further, contribution to the Government will also increase with increased volume. “Income of dealers will be subject to normal taxation and will promote documentation, thereby increasing tax base.”
The OICCI recommended to reduce minimum tax u/s 113 of the Income Tax Ordinance, 2001, from 1.25 per cent to 0.25 per cent on turnover of authorized dealers of vehicle manufacturers, as being allowed to motorcycle dealers, distributors of FMCG, Pharmaceutical, Fertilizers, etc.;
Further, withholding income tax u/s 231B should be exempted on sale of vehicles by manufacturers to their authorized dealers to effectively implement wholesale-retail mechanism.
The overseas chamber also highlighted rate of withholding income tax under section 231B of Income Tax Ordinance, 2001.
Amendment shall be made in the categories of vehicles mentioned in Division VII of Part IV of First Schedule as follows:
Engine Capacity (Existing)
Engine Capacity (Proposed)
Tax
1001cc to 1300cc
1001cc to 1350cc
25,000
1301 cc to 1600cc
1351 cc to 1600cc
50,000
On passenger car with capacity of 1300cc category, different tax rates are applicable based on slight increase in engine capacity (e.g Toyota Corolla (1299cc) was replaced with Toyota Yaris (1329cc). While both vehicles are categorized under broad 1300 cc by market, Rs. 25,000 was collected on Toyota Corolla 1299cc, while Rs. 50,000 is collected on Toyota Yaris 1329cc. Slight increase in cc category is resulting in twice income tax being collected from customer and increasing the cost for customer.
