Abdul Razak Dawood, Advisor to the Prime Minister on Commerce, Industries, and Production, has admitted that the government is responsible for the increase in prices for locally assembled cars. This is because the last budget introduced an increase in sales tax, customs duty, excise duty, withholding tax, and regulatory duty.
We, the government are responsible for the increase in duties and tax for cars and not the manufacturers.
He said that this is the main reason behind the increase in prices while responding to a question raised by Senator Bahramand Khan Tangi about Industries and Production on Thursday.
He revealed that the auto industry has managed to achieve up to 70% localization but also added that 100% localization is impossible. However, for tractors, localization has reached 95% due to its simpler technology.
Another reason behind the auto industry not achieving 100% is because of the constant change in car models and everyone wanting a different model. Tractors, on the other hand, have barely any variation in terms of models.
The adviser added that the main reason for the localization of cars is a reduction in prices and it is unfortunate that the exact opposite is happening. Suzuki has achieved 70% localization, Toyota has managed to gain 65%, and Honda currently stands at 58%, but the import of body parts and raw materials makes these cars expensive.
Razak did, however, appreciate the fact that there was finally an increase in auto sales after months of decline.
I called CEOs of two companies i.e. Toyota and Honda a few days ago who stated that after many months of decline, January was the first month when production of cars was up which is a very good sign.