Automakers raise prices after 7% increase in GST

KARACHI: Automakers have begun to pass on the impact of a 7% increase in general sales tax (GST) to 25%.

According to a notification issued by Lucky Motor Corporation Limited (LMCL), the new price of the Stonic EX and EX plus has been revised upward to Rs5.200 million and Rs5.730 million, respectively, from Rs4.900 million and Rs5.400 million.

Sportage Alpha, FWD, and AWD prices have increased to Rs7.050m, Rs7.790m, and Rs8.370m, respectively, from Rs 6.650m, Rs7.350m, and Rs7.900m.

The new price of the Sorento 2.4L FWD is Rs 9.540m versus Rs 9.000mn, while the prices of the Sorento 2.4L AWD and 3.5L FWD have been raised to Rs 10.390m versus Rs 9.800m.

Peugeot 2008 Active and Allure prices have been raised to Rs6.840m and Rs7.580m, respectively, from Rs6.450m and Rs7.150m.

According to a dealer, the new GST rate of 25% will be applicable on 1,400cc and above vehicles beginning March 8, 2023, and many assemblers are expected to pass on the new prices soon.

Indus Motor Company (IMC) informed analysts on Friday that sales fell by 52 percent year on year in IHFY23, while market share fell to 18 percent from 20.4 percent in IHFY22.

According to a Top Line Securities note, sales were down due to import restrictions on parts. The State Bank had agreed to extend the import quota by 50% until November 2022. After December 2022, the LC issue was transferred to the discretion of banks, resulting in a further reduction in import quotas ranging from 25-30% for various auto assemblers.

With no plans to downsize staff, the company has made other plans, such as management reducing fuel expenses by 25% and saving on electricity, among other things.

According to Insight Research, despite deteriorating economic conditions, IMC’s plan for a $100 million investment to build hybrid vehicles is on track. In the coming days, a new Toyota Revo/Hilux variant will be introduced, followed by a similar development on the Toyota Yaris.