New Auto Policy: Will small cars become affordable for the common man in Pakistan?

 

New Auto Policy: Will small cars become affordable for the common man in Pakistan?

 

Middle-class car buyers in Pakistan are once again hopeful that small cars may now be within their purchasing power in the country.

The reason for this hope of consumers is the new auto policy under consideration by the federal government, which is expected to be implemented this month, and officials of the Ministry of Industries and Production claim that with the advent of this policy, there will be a significant reduction in vehicle prices and it will be possible for an ordinary buyer to get a new car between 2 million and 2.5 million rupees.

However, in the current economic conditions, the question remains as to how and through what measures can the government make this remarkable reduction possible?

What is the current market for small cars?

Small cars in Pakistan, which were once available in a budget of nine to one million rupees, such as the Suzuki Alto, are now touching the three million rupee mark due to the heavy burden of taxes and the flight of the dollar.

The same is true of other popular cars in the 1000 cc category, where the prices of Suzuki Wagon R and Cultus have now reached four and a half million rupees, while other small hatchbacks like Prince Pearl and United Alpha are not available for less than two and a half to two and a half million rupees.

‘The real decision lies in the hands of car assemblers’

But on the other hand, auto sector experts in Pakistan do not seem very optimistic about these government claims. Mian Shoaib, Patron-in-Chief of the All Pakistan Car Dealers and Importers Association, while talking to Urdu News, has identified several practical obstacles to reducing vehicle prices.

He said that ‘the real price reduction does not depend on the government but on local car assemblers whether they pass on the benefit of tax exemption to the consumers or not.’ According to Mian Shoaib, past experience shows that sometimes companies reduce prices for some time, but then increase them again under some pretext.

Mian Shoaib also expressed concern that ‘the government has not yet allowed a healthy competition in the market and has always given preference to certain companies.’ Questioning the effectiveness of the new auto policy, he said, ‘This policy is not yet clear, nor has it received final approval from the Prime Minister, which is why there is still ambiguity in its regular implementation and implementation.’