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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.

  • FBR collects Rs108 billion from auto sector during 11 months

    FBR collects Rs108 billion from auto sector during 11 months

    ISLAMABAD: Federal Board of Revenue (FBR) has collected Rs108 billion from auto sector during first eleven months of the current fiscal year, showing 51 percent growth despite coronavirus pandemic, a statement said on Wednesday.

    The FBR issued details of revenue collection from major sectors during July  – May 2020/2021.

    Tax revenue of Rs. 108 billion is collected from the auto sector so far which was Rs72 billion in the last year showing growth of 51 percent.

    Likewise, revenue of Rs 117 billion is collected from the banks in the current year which was Rs. 87 billion last year exhibiting increase of 34 percent.

    FBR has collected Rs127 billion from the cement sector in the first eleven months which was Rs97 billion last year showing increase of 31 percent.

    The revenue collected from the POL is Rs. 577 billion which was Rs. 516 billion last year showing an increase of 12 percent.

    From the tobacco sector, FBR has collected Rs. 129 billion revenue which was Rs. 104 billion last year thus showing an increase of 24 percent.

    The revenue from sugar sector was Rs. 53 billion which was Rs. 31 billion last year showing a growth of 74 percent.

    The Customs duty collections in the current year from the major items include vehicles, Iron Steel and Machinery and mechanical appliances.

    Customs duty of Rs. 98 billion is collected from vehicles which was Rs. 52 billion last year showing an increase of 86 percent.

    Customs duty from Iron and Steel remained Rs. 53 billion which was Rs. 42 billion last year showing a growth of 24 percent.

    Similarly, Customs duty from machinery and mechanical appliances is Rs. 38 billion which was Rs. 30 billion last year in the same period thus showing a growth of 26 percent.

  • Car sales climb up by 54pc in 10 months

    Car sales climb up by 54pc in 10 months

    KARACHI: Sales of domestic assembled cars have increased by 54 percent during first 10 months of the current fiscal year due to smooth production despite coronavirus threats.

    According to statistics released by Pakistan Automobile Manufacturers Association (PAMA), 151,178 units were sold during July – April 2020/2021 as compared with 97,900 units sold in the same period of the last year.

    The sales of Indus Motors posted 90 percent growth to 48,025 units during first 10 months of the current fiscal year as compared with 25,300 units in the same period of the last year.

    The sales of Honda Cars recorded 71 percent growth to 23,985 units during July – April 2020/2021 as compared with 14,061 units in the same period of the last year.

    The sales of Pakistan Suzuki Motors Company (PSMC) recorded 28 percent growth to 74,619 units during first 10 months of the current fiscal year as compared with 58,303 units in the same period of the last year.

    The sales of Hyundai cars, which entered the domestic market last year, were at 4,549 units during the first 10 months of the current fiscal year.

    Analysts at Topline Securities said that Car sales declined by 17 percent month on month (MoM) in April 2021, affected by the start of the month of Ramadan and supply-side issues.

    The same, including Lucky Motors Corporation (KIA, non-member of PAMA), is down by around 16 percent MoM.

    To highlight, amid countrywide lockdowns imposed by the Federal and Provincial governments in Mar/Apr-2020, no car sales were recorded during Apr-2020.

  • Motor vehicle tax collection grows by 22.7pc; finance ministry issues nine-month statistics

    Motor vehicle tax collection grows by 22.7pc; finance ministry issues nine-month statistics

    ISLAMABAD: The collection of motor vehicle tax has been increased by 22.7 percent owing to better economic conditions during the current fiscal year as compared with unfavorable conditions in the last fiscal year due to corona pandemic.

    According to statistics released by the ministry of finance for the period July – March 2020/2021, the collection of motor vehicle tax increased to Rs20.53 billion during the first nine months of the current fiscal year as compared with Rs16.73 billion in the same months of the last fiscal year.

    The economic conditions were not encouraging at the start of the last fiscal year and later the coronavirus related lockdown adversely impacted commercial and financial activities.

    The provinces have jurisdiction over the collection of motor vehicle tax.

    The province wise collection revealed that the Punjab had posted 15.18 percent increase in motor vehicle tax collection during the period under review. The province collected Rs11 billion during July – March 2020/2021 as compared with Rs9.55 billion in the corresponding period of the last fiscal year.

    The province of Sindh collected Rs7.55 billion during July – March 2020/2021 as compared with Rs5.52 billion during the corresponding period of the last fiscal year, showing an increase of 36.27 percent.

    Khyber Pakhtunkhwa registered an increase of 9.65 percent to Rs1.25 billion during first nine months of the current fiscal year as compared with Rs1.14 billion, showing an increase of 9.65 percent.

    The province of Balochistan posted the highest growth of 43.13 percent to Rs0.73 million during July – March 2020/2021 as compared with Rs0.51 million in the same period of the last fiscal year.

  • PM hopes car scheme to generate demand for domestic industry

    PM hopes car scheme to generate demand for domestic industry

    KARACHI: Prime Minister Imran Khan paid rich tribute to Overseas Pakistanis for their overwhelming response to the Roshan Digital Account (RDA). He said their support and vote of confidence have been pivotal in making the initiative a big success within a short period of time, according to a press release issued by State Bank of Pakistan (SBP) on Thursday.

    The prime minister was addressing a gathering of ministers, CEOs of car manufacturers and insurance companies, heads of leading charities, presidents of banks, SBP officials and other distinguished guests to celebrate the $1 billion mark in RDA deposits and to launch two additional products specially created for Overseas Pakistanis through RDA—Roshan Apni Car and Roshan Samaaji Khidmat.

    The success of RDA and today’s addition of further products under this scheme demonstrate that if the public and private sector work together in a spirit of cooperation, any project is bound to succeed, he added.

    The Prime Minister appreciated the out-of-the-box approach of the SBP and the banking industry in digitally connecting Overseas Pakistanis to the Pakistani banking system and economy through RDA. He also lauded the continued innovation they are showing through the addition of the Roshan Apni Car and Roshan Samaaji Khidmat products.

    He hoped that the Roshan Apni Car initiative would not only help Overseas Pakistanis to fulfill the needs of their loved ones in Pakistan but would also create additional demand for the car industry that will in turn help them and connected industries to grow at a faster pace.

    He was also confident that Roshan Samaaji Khidmat will be able to provide a convenient one stop donation platform for Overseas Pakistanis to meet their charitable giving goals and Zakat obligations. Appreciating the spirit of charity demonstrated time and time again by Overseas Pakistanis, he noted that these additional funds will help social sector organizations and NGOs to help an even larger number of disadvantaged people in Pakistan. The Prime Minister was especially pleased to note that, for the first time, Overseas Pakistanis will now also be able to contribute to “Ehsaas”, the government’s internationally acclaimed poverty alleviation program, through Roshan Samaaji Khidmat.

    In his welcome address, Governor SBP, Dr. Reza Baqir, thanked the Honourable Prime Minister for his vision of connecting the Pakistani diaspora through financial services and for his constant encouragement and guidance.

    He said he was feeling proud today that banks were able to receive $1 billion in deposits through RDA in such a short period of time. Recalling the launch of RDA in September 2020, he said that the first major milestone of receiving $500 million was passed after five months.

    After only another two months, the $1 billion mark has been crossed, demonstrating the accelerating pace inflows. He noted that more than 120,000 Roshan Digital Accounts have been opened from 170 countries around the world.

    He remarked that deposits through these accounts were providing a brand new source of foreign exchange inflows that were helping to improve Pakistan’s foreign exchange reserves and balance of payments position. He appreciated the hard work of all the staff and senior management of both the banks and SBP, noting that their dedication and spirit of constant innovation have been critical to the success of the initiative.

    Roshan Digital Account was conceived to offer lifestyle banking products in Pakistan to Overseas Pakistanis, including money deposit facilities, investment opportunities in Naya Pakistan Certificates, the stock market and real estate, as well as other day to day payment facilities. This suite of lifestyle products is being constantly expanded, with today’s launch of Roshan Apni Car and Roshan SamaajiKhidmat being the latest example.

    Roshan Apni Car has been specially designed for Overseas Pakistanis and has many distinguishing features. For the first time in the history of the banking industry, an RDA holder will be able to apply for car financing for their loved ones in Pakistan completely digitally. Processing time will be fast. Financing and insurance will be available at very attractive rates, and in both conventional and Shariah compliant forms. Moreover, car manufacturers have committed to significantly slashing the car delivery time for RDA holders.  

    Roshan SamaajiKhidmatis a one stop payment platform to enable Overseas Pakistanis to make donations to leading charities, hospitals and educational institutes in Pakistan, as well as to meet their  Zakat obligations. In addition to these private sector organizations, SBP also worked closely with Special Assistant of the Prime Minister of Pakistan on Poverty Alleviation and Social Protection, Dr. SaniaNishtar, and her team to integrate “Ehsaas”, the government’s flagship poverty alleviation program, with the Roshan Samaaji Khidmat portal.

    As a result, private participation in one of the world’s most acclaimed poverty alleviation programsis being made possible for the first time.

    Through Roshan Samaaji Khidmat, Overseas Pakistanis are being given the opportunity to make direct contributions to the program. In so doing, they would be providing vital support to the government’s efforts to lift millions of their fellow Pakistanis out of poverty.

  • Pak Suzuki posts sharp 285pc growth in first quarter

    Pak Suzuki posts sharp 285pc growth in first quarter

    KARACHI: Pak Suzuki Motors Company Limited on Thursday announced an unprecedented growth of 285 percent in gross profit to Rs2.21 billion during the first quarter (January – March) of 2021.

    The company declared the gross profit of Rs573 million in the same quarter of the last year.

    The sales of the company sharply grew to Rs36.1 billion for the quarter ended March 31, 2021 as compared with Rs17.74 billion in the same quarter of the last year.

    With the higher sales, the distribution and marketing expenses of the company also increased to Rs710 million during the quarter under review as compared with Rs320 million in the same quarter of the last year.

    The company declared profit from operations at Rs1.12 billion during January – March 2021 as compared with loss of Rs1.32 billion in the same quarter of the last year.

    The net profit of the company was at Rs778 million during first quarter of 2021 as compared with net loss of Rs941 million in the corresponding quarter of the last year.

    The company declared earnings per share at Rs9.45 for the period ended March 31, 2021 as compared with net loss of Rs941 million in the corresponding period of the last year.

  • Sharp growth recorded in import of CBU, CKD motor cars

    Sharp growth recorded in import of CBU, CKD motor cars

    ISLAMABAD: A sharp growth has been witnessed in import of motor cars in the categories of Completely Build Unit (CBU) and Completely Knocked Down (CKD) during first nine months (July – March) of 2020/2021.

    The import of motor cars in both the categories recorded over 100 percent growth.

    According to data released by Pakistan Bureau of Statistics (PBS) the import of CBU motor cars increased by 149 percent to $161.21 million during first nine months of the current fiscal year as compared with $64.8 million in the corresponding period of the last fiscal year.

    Similarly, the import of CKD cars increased by 113 percent to $733 million during July – March 2020/2021 as compared with $343.4 million in the same period of the last fiscal year.

    Analysts said that import of CBU cars increased due to ease in air travel restrictions after reduction in coronavirus cases globally.

    Besides, the import of CKD cars can be attributed to acceleration in domestic industrial activities after lifting of lockdown that was imposed to prevent spread of coronavirus cases.

  • FBR urged to revise slabs for advance tax collection on motor cars

    FBR urged to revise slabs for advance tax collection on motor cars

    KARACHI: Federal Board of Revenue (FBR) has been urged to revise slabs of engine capacity of motor cars to give benefit to buyers in payment of withholding tax.

    Overseas Investors Chamber of Commerce and Industry (OICCI) in its proposals for budget 2021/2022 submitted to the FBR, said that advance tax under section 231B of Income Tax Ordinance, 2001 is collected by manufacturers on following categories:

    On engine capacity 1001cc to 1300cc the advance tax is collected at Rs25,000.

    While on engine capacity 1301 cc to 1600cc the advance tax is collected at Rs50,000.

    OICCI recommended that as locally manufactured sedans passenger cars fall slightly above the 1300cc category the slightly higher engine capacity size results in these vehicles falling in higher tax bracket making it more expensive with higher upfront cost to customers.

    Amendment should be made in the categories of vehicles mentioned in Division VII of Part IV of First Schedule as follows:

    On engine capacity 1001cc to 1350cc the advance tax rate should be Rs25,000.

    While on engine capacity 1351 cc to 1600cc the advance tax rate should be Rs50,000.

    In its proposals for auto sector, the OICCI recommended that minimum tax rate should be reduced to 0.2 percent for authorized dealers of local vehicle manufacturers as they have high turnover and low margins.

    The OICCI further said that exempt imports made under SRO 655(I)/2006 & SRO 656(I)/2006 from ACD levied vide SRO 1178 (I) 2015 and enhanced vide SROs 630 (I)/2018 and 670 (I)/2019.

    Federal Excise Duty (FED) on locally manufactured vehicles should be withdrawn.

    Levy of FED on locally manufactured vehicles be withdrawn by deleting the serial no. 55B of Table I of First Schedule to the Federal Excise Act, 2005 as it has resulted in significant increase of sales price of vehicles with consequential reduction in sales volume of the respective vehicle categories.

  • Car sales register 37pc growth in nine months

    Car sales register 37pc growth in nine months

    KARACHI: The sales of locally assembled cars registered 37 percent growth in first nine months (July – March) 2020/2021 owing to higher demand following ease in coronavirus restriction during the period.

    According to Pakistan Automotive Manufacturers Association (PAMA) the car sales recorded 134,522 units during first nine months of the current fiscal year as compared with 98,425 units in the corresponding period of the last fiscal year.

    Analysts attributed the rise in car sales to ease in restrictions related to coronavirus during the current fiscal year, which resulted in acceleration in economic activities.

    According to analysts of Topline Securities, the car sales have increased by 27 percent MoM in March 2021 (highest since March 2019), taking 9MFY21 sales growth to 37 percent YoY.

    The same, including Lucky Motors Corporation (KIA, non-member of PAMA), is up by around 20 percent MoM (highest since October 2018) with 9MFY21 sales growth estimated at around 46 percent YoY.

    Sales are up 198 percent YoY (as reported by PAMA) in March 2021, however YoY sales growth is misleading, in their view, because of lockdowns in March last year due to COVID-19.

    Indus Motor Company (INDU) sales increased the most by 53 percent MoM as the company had witnessed supply issues in Feb-2021. Sales growth was primarily driven by Hilux sales, which were up by 103 percent MoM.

    New entrants in the industry, Hyundai Nishat sold 723 units in March 2021 with the inclusion of Hyundai Elantra, while Lucky Motor Corporation sold around 2,000 units, as per our channel checks.

    Atlas Honda (ATLH) recorded motorbike sales of 125,030 units in March 2021, up 20 percent MoM. In 9MFY21, sales have increased by 25 percent YoY.

    Tractor sales in Mar-2021 are up by 89 percent YoY and 24 percent MoM.

    Millat Tractors (MTL) recorded increase of 71 percent YoY (+17 percent MoM) while Al Ghazi Tractors (AGTL) sales increased by 133 percent YoY (+40 percent MoM), respectively.

  • Withholding tax collection from new car registration declines by 39pc in TY2020

    Withholding tax collection from new car registration declines by 39pc in TY2020

    ISLAMABAD: The collection of withholding tax on registration of new cars has declined by around 39 percent in tax year 2020 due coronavirus pandemic that has lowered the sales of locally assembled motor vehicles.

    According to details released by Federal Board of Revenue (FBR) the collection of withholding tax fell to Rs5.88 billion in tax year 2020 as compared with Rs9.58 billion in the preceding tax year.

    The drastic fall in revenue collection has been attributed to lower car sales that were impacted by COVID-19 and slowdown in the economy.

    The annual sales of locally assembled cars posed a decline of 53 percent during fiscal year 2019/2020. According to Pakistan Automobile Assemblers Association (PAMA), the total car sales in the country were recorded at 110,583 units during fiscal year 2019/2020 as compared with 235,229 units in the preceding fiscal year.

    The provincial motor vehicle registration authorities collect withholding tax on behalf of the FBR. The withholding tax has been collected on the registration of new motor car under Section 231B of the Income Tax Ordinance, 2001.

    Following rates of withholding tax under Section 231B:

    S. No.Engine capacityTax
    (1)(2)(3)
    1.upto 850ccRs. 7,500
    2.851cc to 1000ccRs. 15,000
    3.1001cc to 1300ccRs. 25,000
    4.1301cc to 1600ccRs. 50,000
    5.1601cc to 1800ccRs. 75,000
    6.1801cc to 2000ccRs. 100,000
    7.2001cc to 2500ccRs. 150,000
    8.2501cc to 3000ccRs. 200,000
    9.Above 3000ccRs. 250,000]

    The above rates are applicable for persons on the Active Taxpayers list (ATL). However, the tax rate shall be enhanced by 100 percent in case person is not on the ATL.

  • FBR urged to allow commercial import of used cars to end auto assemblers monopoly

    FBR urged to allow commercial import of used cars to end auto assemblers monopoly

    KARACHI: Federal Board of Revenue (FBR) has been urged to allow commercial import of used and reconditioned cars of models up to five years old to end monopoly of local car assemblers.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2021/2022 recommended the commercial import of used and reconditioned motor cars up to five years old.

    The chamber said that during the past 40 years, assemblers of automobiles have enjoyed protective duties, exemptions and virtual monopoly in Pakistan’s automobile car market.

    Contrary to initial agreements, the assemblers failed to implement deletion program up to 90 percent. Instead, they are importing CKD while they have created vendors who mostly import auto parts and supply to these assemblers.

    Consequently, the so called vendor industry is only producing low quality and non-mechanical parts which is clearly visible in locally assembled cars.

    So far the assemblers have only drained Pakistan’s foreign exchange reserves to the tune of billions of dollars.

    Quality of automobiles produced by the assemblers is so poor that not a single unit of these cars has ever been exported to any country.

    Despite such poor quality, artificial shortage is created to fetch a premium on the early delivery and allow undocumented investors to exploit genuine buyers.

    The chamber said that import of reconditioned cars more than 3 years old model has been restricted to favor the assemblers and exploit the middle class people of Pakistan who can no more afford to buy even a small 660cc to 1000cc imported or local car.

    Ironically, import of brand new cars of high capacity and premium brands is allowed which only benefits the elite. Middle class consumers have been deprived of their right to purchase reasonably priced used/reconditioned cars which have a better quality and safety standard than the locally assembled new vehicles.

    Clearly there is an element of corruption, connivance and vested interest involved in formulating auto-policies. Unfortunately, the vested interests are also resisting to change the policy to allow import of reconditioned cars by reducing the Tariff rates and also permit import of cars of up to five year old models.

    The chamber further said that enough protection has been given for decades to assemblers.

    The chamber has given a comprehensive tariff plan for import of used and reconditioned cars.