New car bookings have declined by 30% during the same period last year ever since the previous government imposed a ban on non-filers to buy cars from July 1st .
Experts believe that the true impact of the ban, which has now being reversed as part of the PTI government’s mini-budget, will emerge by December 2018.
It should be mentioned that the ban on purchase of cars by non-filers, was exempted in the case of the country’s agriculture sector, seeing as how it constitutes 30 percent of the country’s gross product (GDP).
As mentioned earlier, the ban was effective from the 1st July of the current financial year 2018-2019.
According to a source in the automobile industry, post-ban, the annual sales of cars will decline from 240,000 units to 168,000 units.
The ban has also affected sales in the low-engine capacity car market. Pak Suzuki Motor has reported a major decline in sales last month. The company dominates the low-engine capacity car segment below 1000cc vehicle category.
Pak Suzuki reported a sales decline of 27%, with its volumes falling to 8,683 units year on year. The biggest decline in its August’s sales occurred with its Ravi and Mehran variants, with their sales plummeting by 50 percent and 42 percent respectively.
The source also divulged that the value of the automobile’s industry’s annual sales will plummet by Rs.100.80 billion.
It is pertinent to mention here that this decline will also manifest itself with regards to the tax collected by the Federal Board of Revenue (FBR), with a shortfall of Rs 32.25 billion. Currently, taxes constitute 32 percent of a car’s price.
The source also stated that:
“The ban, if it persists, will lead to a reduction of 2,500 assembler jobs while 12,500 persons, directly and indirectly working for vendor plants, will also lose employment. It will cause a slowdown in the large-scale manufacturing industry and GDP growth.”
via ProfitPK
