Local car sales fall by 55pc

[Naveed Yaseen]

KARACHI, Aug 11: The sale of locally-produced cars fell by 55 per cent to 4,744 units in July as compared to 10,516 units during the same month of last year and 13,967 units sold in June 2008.

Levy of five per cent federal excise duty, increase in sales tax by one per cent and fixed rates of withholding tax (WHT) have contributed to the decline of car sales.

According to analyst Bilal Hameed of JS Global Capital Limited, car sales fell by 11 per cent in 2007-08 to 147,441 units as compared to 165,268 units in 2006-07.

He linked the decline in sales in 2007-08 to uncertain political and economic conditions, halt in auto financing facilities by banks due to loan defaults, increase in interest rates resulting in expensive auto financing, increase in prices due to imposition of WHT and excise duty, further increase in prices and continued influx of used cars.

http://www.dawn.com/2008/08/12/ebr4.htm

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RECORDER REPORT
KARACHI (August 12 2008): The local auto (cars and light commercial vehicles LCVs) sales declined by 42 percent on year-on-year basis to 7,418 units in the month of July 2008 as compared to 12,830 units sold in the same month last year. According to the figures released by Pakistan Automotive Manufacturing Association (PAMA), the auto sales fell by 58 percent on month-on-month basis as 17,583 units were sold in the month of June 2008.

"The primary reason for the sharp decline is the significant increase in prices by the assemblers to pass on the impact of 5 percent federal excise duty (FED) and increase in sales tax from 15 percent to 16 percent announced in Budget FY09", Bilal Hameed, an analyst at JS Global Capital Limited said.

Moreover, fixed rates of withholding tax (WHT) on purchase of cars were implemented in the budget, adding to the costs of purchasing a vehicle, he added. Further, Pak Suzuki's maintenance shutdown during July and halt in Corolla's production by Indus Motor also impacted the sales. The car sales fell by 55 percent to 4,744 units in July 2008 against 10,516 units in the same month last year.

The share break up for Cars and LCVs in auto sales has changed from respective 82 percent and 18 percent to 64 percent and 36 percent, owing to 16 percent year-on-year increase in LCV sales. Out of the total auto sales, Pak Suzuki sold 4,601 units, Indus Motors 1,297 units, Honda Car sold 1,026 units while Dewan Motor sold 274 units in the month of July 2008.

http://www.brecorder.com/index.php?id=789294