KARACHI: Pakistani automakers have begun cutting prices of hybrid electric vehicles (HEVs) nearly two weeks after the government reduced the general sales tax (GST) on vehicles up to 2,000cc from 25% to 18%.
The price reductions, effective on orders invoiced from September 25, follow prolonged uncertainty in the automotive sector after the expiry of the previous auto policy and a sharp increase in GST on electrified vehicles.
Honda Atlas Cars Ltd (HACL) has reduced the price of its HR-V e to Rs9.299 million from Rs10.369 million, while the HR-V VTi-S now costs Rs7.299 million, down from Rs7.799 million.
The company said the revised prices would be available for a limited period and on limited stock.
Meanwhile, Indus Motor Company has cut the price of the Toyota Corolla Cross HEV X by Rs570,000 to Rs9.729 million. The Corolla Cross HEV is now priced at Rs9.299 million, a reduction of Rs550,000.
Sales May Recover
Chery Master Director of Sales and Marketing Syed Asif Ahmed said the reduction in GST could help revive demand after consumers delayed purchases while awaiting clarity over the tax regime.
The Automotive Industrial Development Policy 2021-26, which expired on June 30, had set GST at 8.5% for electric vehicles. The government has since reduced GST on vehicles up to 2,000cc from 25% to 18%, with the new rate taking effect on September 13.
The industry is now awaiting the new auto policy, expected to take effect from July 1, but it has yet to be announced. Assemblers say the absence of a clear long-term policy framework has created uncertainty across the automotive supply chain, affecting business planning, production schedules and investment decisions.
Several assemblers temporarily delayed vehicle invoicing during July and August while awaiting clarity over the applicable tax and tariff regime.
Industry Uncertainty
Asif said the earlier 25% GST had caused a sharp decline in demand, leaving a significant stock of electrified vehicles unsold as consumers waited for clarity on the tax issue.
“I think sales will return to normal in the coming months,” he said, adding that the main uncertainty now concerns the direction of the new auto policy rather than the GST rate already reduced to 18%.
He said most vehicles produced by his company and other assemblers were expected to be delivered within the next two months.
Separately, Mega Motor Company, BYD’s official partner in Pakistan, said on Friday that BYD had reached 10,000 vehicles on Pakistani roads, describing the milestone as the fastest ramp-up by a new entrant NEV brand in the country’s automotive history.
