LAHORE – Prices of hybrid electric vehicles (HEVs) have started falling after local assemblers passed on a reduction in the general sales tax (GST) rate to consumers.
The GST on vehicles up to 2,000cc was reduced from 25 per cent to 18pc with effect from September 13. However, vehicle assemblers delayed price revisions for nearly two weeks as the industry awaited greater clarity over the applicable tax and policy framework.
Honda Atlas Cars Ltd (HACL) has now reduced the prices of two HR-V variants.
Honda Atlas has cut the HR-V e:HEV price to Rs9.299 million from Rs10.369m, reducing it by Rs1.07m. The company has also lowered the HR-V VTi-S price to Rs7.299m from Rs7.799m.
Read more: Punjab seeks 2G, 3G and 4G restrictions at selected Rawalpindi locations
Honda said the revised prices were applicable to limited stock, with the new rates applying to orders invoiced from September 25.
Indus Motor Company has also reduced prices for its hybrid models.
The Toyota Corolla Cross HEV X is now priced at Rs9.729m, a reduction of Rs570,000. The standard Corolla Cross HEV is available at Rs9.299m after a Rs550,000 reduction.
Industry faces policy uncertainty
The price reductions come after months of uncertainty in the automotive sector over taxes and the future policy framework.
The Automotive Industrial Development Policy 2021-26 expired on June 30. Under the previous framework, electric vehicles were subject to an 8.5pc GST rate.
The industry had expected a new auto policy to take effect from July 1. However, the policy has yet to be announced.
Read more: What is CNN and CBS News Editorial Independence Board?
Assemblers have said the uncertainty affected production planning, investment decisions and other business activities. Some companies also temporarily delayed vehicle invoicing during July and August.
Chery Master Director Sales and Marketing Syed Asif Ahmed said the 25pc GST had significantly affected demand for electrified vehicles.
According to him, consumers held back purchases while waiting for clarity on the tax rate, resulting in a sizeable inventory buildup.
He said the 18pc GST rate could help revive demand for electrified vehicles. However, the new auto policy could change the rate again, creating further uncertainty for the industry.
Mr Ahmed added that his company and other assemblers expected to deliver most vehicles within the next two months.
Meanwhile, Mega Motor Company, the official partner of BYD in Pakistan, said Chinese new energy vehicle (NEV) brand BYD had reached 10,000 vehicles on Pakistani roads.
The company described the milestone as the fastest ramp-up by a new entrant NEV brand in Pakistan’s automotive history.
With the GST reduction now reflected in the prices of several models, further price adjustments could follow as assemblers review their inventories and invoicing arrangements.
Key points:
- GST on vehicles up to 2,000cc was reduced from 25pc to 18pc from September 13.
- Honda Atlas and Indus Motor Company have lowered prices of several hybrid models.
- Honda’s HR-V e is now priced at Rs9.299 million, down Rs1.07m.
- Toyota Corolla Cross HEV prices have fallen by up to Rs570,000.
- Industry officials say the lower GST could help revive demand for electrified vehicles
