Senate body concerned over high car prices
Senate Standing Committee on Industries and Production expressed grave concern over the failure of local carmakers to reduce car price in Pakistan in line with tax breaks approved in the budget for 2021-22.
The committee noted that while local automakers received tax breaks in the budget, they did not lower the price of car to match the incentives.
Under the chairmanship of Senator Faisal Sabzwari, the parliamentary panel met in Parliament.
The Secretary of Industries and Production briefed the committee on a comparison of car costs in Pakistan and other regional countries.
Members of the committee expressed their dissatisfaction with the country’s high automobile pricing.
Despite the measures approved in the federal budget, the committee highlighted that new vehicle prices have not decreased.
According to the Secretary of Industries and Production, government measures included in the 2019 federal budget have reduced car prices.
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The new auto policy prioritises assuring global automobile quality.
The Secretary also told the committee that there are a variety of reasons why automobiles are expensive in Pakistan than in India.
He claimed that if the government had not fostered a competitive atmosphere, prices would have been higher. He claims that car prices in India are lower than in Pakistan for a variety of reasons.
In India, raw materials for automobiles are available locally.
According to the Secretary, Suzuki produces 100,000 vehicles in Pakistan, while Maruti Suzuki produces one million vehicles every year in India.
The government has reduced taxes on vehicles. It also reduced import duties on vehicles up to 1000 cc.
He stated automakers had the price of the car from Rs 85,000 to Rs 155,000. In the briefing, he also stated that Honda did not lower the price of BRVs.
According to a release, Senator Syed Faisal Ali Sabzwari presided over a meeting of the Senate Standing Committee on Industries and Production on Monday at Parliament House.
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The programme included a detailed comparison of car prices and specifications in the region, as well as an update on the impact of government incentives on the automobile industry, end-users and functions. The committee also noted the briefing on the Small and Medium Enterprises Development Authority’s activities, projects, and future plans (SMEDA).
During a discussion about automobile pricing in Pakistan, industries ministry informed that in the case of small cars, higher levels of localization and volume are among the key reasons for cheaper car prices in India.
Larger vehicles, such as Toyota, nevertheless, are less expensive than regional pricing. It was claimed that government subsidies resulted in price reductions of cars in the local market ranging from $50,000 to $400,000, which benefited both the end-user and the industry.
Lowering car prices are predicted to improve demand, allowing the automobile industry to increase capacity utilisation and create chances for auto part localization.
Senator Syed Faisal Sabzwari, Chairman of the Committee, suggested that members of the Committee tour manufacturing facilities. The standardisation of safety measures in freshly manufactured automobiles has been called into question.
In August 2020, the Prime Minister’s Office established the National Coordination Committee (NCC) for SME Development.
As a result, the Prime Minister presided over frequent review meetings of the NCC. The Prime Minister adopted the National SME Policy Action Plan 2020 during the NCC meeting on October 8, 2020.
Priorities included SMEs’ regulatory simplification, a simpler taxation framework, and easier access to funding.
